Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103482
Authors: 
Euwals, Rob
Trevisan, Elisabetta
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Papers 8466
Abstract: 
This paper investigates the impact of financial incentives on early retirement behaviour for high and low wage earners. Using a stylized life-cycle model, we derive hypotheses on the behaviour of the two types. We use administrative data and employ a linear random effects model to test the predictions. We exploit exogenous variation in the replacement rate over birth cohorts of workers who are eligible to a transitional early retirement scheme. The empirical results show that low wage earners are, as predicted by the model, more sensitive to financial incentives. This implies that low wage earners will experience a stronger incentive to continue working in an early retirement scheme with a low implicit tax rate.
Subjects: 
pensions
early retirement
labour market behaviour
JEL: 
J16
J22
J61
Document Type: 
Working Paper

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