[Journal:] IZA Journal of European Labor Studies [ISSN:] 2193-9012 [Volume:] 5 [Year:] 2016 [Issue:] 18 [Pages:] 1-18
We examine whether easy and early access to old-age benefits induce older workers to become inactive. We use Polish LFS data. We find added worker effect prevailing over discouraged worker effect. The latter arises after a few quarters and is asymmetric. Females permanently leave the workforce. More males leave the workforce in contractions than re-enter in expansions. If old-age benefit becomes the main source of income, the worker (after 1 year) is 8 to 20 times more likely to exit the market than unemployment or social welfare beneficiaries. Our findings support higher retirement age-the age when workers become eligible for old-age benefits.