Working Paper: NBER ID: w30164
Authors: Huixin Bi; Sarah Zubairy
Abstract: We construct a database of public pension policy changes with motivation and implementation information for ten OECD countries. Structural pension reforms, motivated by long-run sustainability concerns, often come with prolonged phase-in periods. In response to pension retrenchments implemented immediately, people close to retirement stay in the work force longer. News about future pension retrenchments with implementation lags, however, is likely to lead this group to exit the labor market. This decline in the labor force participation rate is particularly strong for reforms with long lags, ones that introduce fundamental policy changes, and where citizens have lower trust in the government.
Keywords: No keywords provided
JEL Codes: E62; H30; H55
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| structural pension reforms (H55) | decline in labor force participation rates (LFPR) (J21) |
| longer implementation lags (C41) | decline in labor force participation rates (LFPR) (J21) |
| lower governmental trust (H10) | greater decline in labor force participation rates (LFPR) (J21) |
| immediate reforms (P41) | increase in labor force participation rates for individuals aged 55-64 (J26) |
| pension retrenchments announced with long lags (J26) | earlier exit from labor market (J26) |
| pension reforms (H55) | influence labor market behavior (J29) |
| income effect dominates for immediate reforms (H31) | higher labor force participation (J21) |
| uncertainty effect prevails for reforms with long lags (D81) | lower labor force participation (J49) |