Working Paper: NBER ID: w24637
Authors: Pilar Garcagmez; Sergi Jimenez-Martin; Judit Vall Castell
Abstract: Similar to other OECD countries, labor force participation rates of Spanish older workers were falling until the mid-1990s when there was a reversal in the trend. Labor force participation rates of Spanish men have been increasing since then, although at a slower pace than in other OECD countries. We explore to what extent several factors can be behind these trends. First, we conclude that the (old-age) social security system (except perhaps for the disability component) has played a marginal (at most) role on this reversal given the lack of major changes in social security benefits until the last set of reforms in 2011 and 2013. Second, we also rule out that changes in the health status of the population are responsible for the reversal of this trend. Finally, we find that aggregate economic conditions, and differences across cohorts in both the skill composition and the labor force attachment of wives are potential drivers of these observed changes.
Keywords: Labor Force Participation; Older Workers; Spain; Social Security; Economic Conditions
JEL Codes: J14; J21; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| old-age social security system (H55) | labor force participation rates of older workers (J26) |
| changes in health status (I14) | labor force participation rates of older workers (J26) |
| aggregate economic conditions (E10) | labor force participation rates of older workers (J26) |
| differences in skill composition across cohorts (J24) | labor force participation rates of older workers (J26) |
| increased labor force attachment of wives (J12) | labor force participation rates of older workers (J26) |