Working Paper: NBER ID: w17320
Authors: Dayanand S. Manoli; Andrea Weber
Abstract: This paper presents new empirical evidence on the effects of retirement benefits on labor force participation decisions. We use administrative data on the census of private sector employees in Austria and variation from mandated discontinuous changes in retirement benefits from the Austrian pension system. We present graphical evidence documenting labor supply responses to the policy discontinuities. Next, we develop nonparametric procedures to estimate labor supply elasticities based on the graphical evidence and mandated financial incentives. We estimate elasticities of 0.12 for men and 0.38 for women. These relatively low elasticities highlight that many retirement decisions are likely to be affected by factors beyond only financial incentives from retirement benefits.
Keywords: retirement benefits; labor force participation; financial incentives
JEL Codes: H55; J22; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Financial incentives (M52) | Retirement decisions (J26) |
| Mandated discontinuous changes in retirement benefits (J26) | Labor supply decisions (J22) |
| Retirement decisions (J26) | Labor supply changes (J20) |