Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/107571
Authors: 
Puhani, Patrick A.
Tabbert, Falko
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 8787
Abstract: 
To estimate the effects of large cuts in pensions on the age of first benefit receipt, we exploit two natural experiments in which such cuts affect a group of repatriated ethnic German workers. The pensions were cut by about 12%, yet, according to our regression discontinuity estimates based on administrative pension data, there was no significant delay in the age of first pension receipt. Based on additional data sources, we find (i) that almost all pension recipients of our study population had left the labor force and (ii) that repatriated ethnic Germans hold similar jobs and exhibit similar retirement behavior as low-skilled Germans. The results are consistent with low-skilled workers in Germany being frozen in a corner-solution equilibrium in which the optimal choice is to retire as early as possible.
Subjects: 
policy
evaluation
pension reform
labor supply
retirement
JEL: 
J26
H55
Document Type: 
Working Paper

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