Working Paper: NBER ID: w25367
Authors: Pilar García-Gómez; Silvia García-Mandic; Sergi Jiménez-Martin; Judit Vall Castell
Abstract: In this paper, we analyze the association between financial incentives and retirement decisions using aggregate data for over four decades in Spain. We calculate an implicit tax rate on remaining in employment for an additional year and examine its correlation with employment rates for older workers. The results suggest that financial incentives play a role in explaining the retirement patterns of both employed and unemployed workers.
Keywords: pension system; retirement decisions; financial incentives; employment trends; Spain
JEL Codes: H55; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| implicit tax rate on employment (H29) | retirement patterns of employed workers (J26) |
| implicit tax rate on employment (H29) | retirement patterns of unemployed workers (J26) |
| financial incentives from social security system (H55) | early retirement patterns (J26) |
| financial incentives from social security system (H55) | overall employment rates among older workers (J26) |
| implicit tax rate on employment (H29) | employment rates for older workers (J26) |