Template-Type: ReDIF-Paper 1.0
Title: The Effect of Pension Subsidies on the Retirement Timing of Older Women
Author-Name: Han Ye
Author-Email: han.ye@uni-mannheim.de

Classification-JEL: H55, J18, J21, J26
Keywords: pension subsidy, pension generosity, retirement, regression kink design

Abstract: I estimate the effect of additional pension benefits on women’s retirement decisions by examining
a German pension subsidy program. The subsidies have a kinked relationship with the
recipients’ past pension contributions, creating a sharply different slope of benefits for similar
women on either side of the kink point. I find that a 100 euro increase in the monthly benefit
induces female recipients to claim their pensions six months earlier. Recipients also adjust their
labor supply by using unemployment insurance (UI) as a stepping stone to retirement and by
reducing time spent in marginal employment. A back-of-the-envelope calculation suggests that
the ratio of behavioral to mechanical costs for this subsidy program is 0.25, which is smaller
than that of other income support programs.

Note: 
Length: 81
Creation-Date: 2020-05
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp177
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2020_177