3/2020 Orsolya Soosaar, Allan Puur, Lauri Leppik. Does raising the pension age prolong working life? Evidence from pension age reform in Estonia

Working Papers of Eesti Pank 3/2020

We estimate how raising the statutory retirement age affects employment by considering the pension age reform in Estonia, that gradually raised the normal retirement age (NRA) for women from 58 to 61.5 and the early retirement age (ERA) from 56 to 59.5 during the period of 2001 to 2011. The analysis employs a difference-in-differences estimation strategy on register data covering women born between 1943 and 1952. The reform did have an impact on the employment rate of affected women, with an estimated increase of 4.1 percentage points associated with the rise in the NRA, and 3.4 percentage points with the rise in the ERA. These
estimates are at the lower end of those found in previous studies for other countries, pointing to the role of contextual features such as lower replace-ment rates and fewer disincentives to work while drawing pensions.

JEL Codes: H31, H55, J14, J26

Keywords: retirement age, older workers, employment

DOI: 10.23656/25045520/032020/0176

Author's email: orsolya.soosaar [at] eestipank.ee

The views expressed are those of the authors and do not necessarily represent the official views of Eesti Pank or the Eurosystem.