Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324829 
Year of Publication: 
2025
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1700
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
We study how public pensions impact lifecycle labor supply decisions. Our analysis centers on pension eligibility rules in Ecuador. We first use administrative data to document and unpack retirement spikes at eligibility ages. Next, we use survey data and regression discontinuity to investigate whether eligibility rules influence earlier-in-life decisions about when to work formally versus informally. We find discontinuous increases in transitions to formal employment at 50, consistent with forward-looking people timing employment to minimize social security contributions while maintaining benefit eligibility. Evidence suggests that small and family firms, where employees and employers may readily coordinate, help facilitate these transitions.
Subjects: 
Social security
Pensions
Retirement
Informal labor markets
Labor supply
JEL: 
H55
J26
J46
O12
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Working Paper

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