Working Paper: NBER ID: w17048
Authors: Pilar Garcagmez; Sergi Jiménez-Martín; Judit Vall Castell
Abstract: In this paper we analyze the trends in labor force participation and transitions to benefit programs of older workers in relation to health trends as well as recent Social Security reforms. Our preliminary conclusions are pessimistic regarding the effect of health improvements on the labor market attachment of older workers since we show that despite the large improvements in the mortality rates among older individuals in Spain, the employment rates of individuals older than fifty-five remain lower than the ones observed in the late 1970s. Some caution should remain in our conclusions as the evidence on health trends is inconclusive. Regarding the effect of Social Security reforms, we find that both the 1997 and the 2002 reform decreased the stock into old-age benefits at the cost of an increased share of the participation into disability. Finally, we find that there was a significant increase in the outflow from employment into disability after the 2002 reform.
Keywords: health; disability; retirement; Spain
JEL Codes: H55; I18; J11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| improvements in mortality rates among older individuals in Spain (J26) | increased employment rates for individuals aged 55 and older (J14) |
| 1997 and 2002 social security reforms (H55) | decreased stock of old-age benefits (H55) |
| 1997 and 2002 social security reforms (H55) | increased participation in disability benefits (H53) |
| 1997 and 2002 social security reforms (H55) | shifts in benefit program participation (J68) |
| 2002 reform (E69) | significant increase in the outflow from employment into disability (J68) |