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Title:Benefit Generosity and the Income Effect on Labor Supply: Quasi-Experimental Evidence PDF Logo
Authors:Danzer, Alexander M.
Issue Date:2011
Series/Report no.:Proceedings of the German Development Economics Conference, Berlin 2011 23
Abstract:This paper uses an unanticipated, exogenous doubling of the legal minimum pension in Ukraine as a unique quasi-experiment to evaluate the income effect on various aspects of labor supply among the elderly. In contrast to previous studies, the unusually simple pension eligibility rule allows estimating a pure causal income effect. Applying difference-indifferences and regression discontinuity methods on two nationally representative data sets yields a retirement elasticity of 0.3. Men and women respond at different margins of labor supply but with similar overall effect. Despite retirement incentives being disproportionally large for low income earners old-age poverty declined significantly.
Subjects:pure income effect
benefit generosity
labor supply
retirement
poverty
wage effect
Document Type:Conference Paper
Appears in Collections:Proceedings of the German Development Economics Conference, 2011 (Berlin)

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