Working Paper: NBER ID: w31470
Authors: Takashi Oshio; Satoshi Shimizutani; Akiko S. Oishi
Abstract: This study examines how elderly employment is associated with social security programs and how it responds to recent reforms in Japan. To this end, we employed a rich and longitudinal dataset of middle-aged and older individuals collected between 2005 and 2018. By incorporating various factors related to social security incentives into a single index of implicit tax (ITAX), we confirmed that the index successfully captured the incentives and their changes incorporated in recent social security reforms. We further estimated the association of ITAX with an individual’s decisions concerning retirement and pension benefit claims. Lastly, we conducted counterfactual simulations to assess the effect of recent social security forms on retirement based on the estimated regression parameters. The results showed that a higher ITAX drove individuals, especially men, to retire and claim benefits earlier.
Keywords: Elderly Employment; Social Security Programs; Japan; Implicit Tax; Retirement
JEL Codes: H55; J14; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| social security reforms (H55) | implicit tax index (itax) (H26) |
| social security reforms (H55) | earlier retirement (J26) |
| social security reforms (H55) | benefit claims sooner (J65) |
| implicit tax index (itax) (H26) | earlier retirement (J26) |
| implicit tax index (itax) (H26) | benefit claims sooner (J65) |