As people stay longer, governments and employers are contemplating growing the age at which people change into eligible for both public or non-public pensions (e.g., Social Safety). Why this fiscal impacts of adjusting the retirement age has been well-studied, the labor market and well being outcomes are much less well-known.
A paper by Serrano-Alarcón et al. (2023) examines the impression of pension reform in Italy. Italy has a public pension system that’s financed utilizing a (PAYGO) mechanism. Earnings substitute charges traditionally have been 77%. A 2012 pension reform elevated the retirement age, such that every one people had a statutory pension age of 67. This coverage result in a rise within the retirement age by 7 years (60–67) for girls and a couple of years (65–67) for males.
The authors use information from WHIP—Well being is predicated on the Work Histories Italian Panel (WHIP), a database of particular person work histories derived from a random pattern of people insured by the Italian social safety administration (INPS). The WHIP-Well being information are then linked to information on private and non-private hospital discharges from the Nationwide Archive of Hospital Discharges. The authors’ empirical technique compares neighboring cohorts who had been in a different way affected by the reform as a result of enhance within the statutory pension age (old-age pension). For example, “girls born in 1951 had been eligible for retirement beneath the statutory pension age in 2011 by the age of 60…[but] girls born in 1952 had been solely eligible for claiming a pension from 2015 on the earliest, when turning 63.”
Utilizing this method, the authors discover that:
Amongst girls solely, the reform additionally elevated sick go away and hospitalizations associated to psychological well being and accidents. These results had been pushed by girls with beforehand low well being standing, suggesting that undifferentiated and abrupt will increase in pension age may hurt extra weak employees. Coherently with the milder tightening of retirement age skilled by males, labor market responses had been smaller in measurement, and they didn’t endure any vital well being results.
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