As people reside longer, governments and employers are contemplating rising the age at which people turn out to be eligible for both public or non-public pensions (e.g., Social Security). Why this fiscal impacts of adjusting the retirement age has been well-studied, the labor market and well being outcomes are much less well-known.
A paper by Serrano-Alarcón et al. (2023) examines the influence of pension reform in Italy. Italy has a public pension system that’s financed utilizing a (PAYGO) mechanism. Income substitute charges traditionally have been 77%. A 2012 pension reform elevated the retirement age, such that every one people had a statutory pension age of 67. This coverage result in a rise within the retirement age by 7 years (60–67) for girls and a pair of years (65–67) for males.
The authors use information from WHIP—Health relies on the Work Histories Italian Panel (WHIP), a database of particular person work histories derived from a random pattern of people insured by the Italian social safety administration (INPS). The WHIP-Health information are then linked to information on private and non-private hospital discharges from the National Archive of Hospital Discharges. The authors’ empirical technique compares neighboring cohorts who have been otherwise affected by the reform as a result of enhance within the statutory pension age (old-age pension). For occasion, “women born in 1951 were eligible for retirement under the statutory pension age in 2011 by the age of 60…[but] women born in 1952 were only eligible for claiming a pension from 2015 at the earliest, when turning 63.”
Using this strategy, the authors discover that:
Among girls solely, the reform additionally elevated sick depart and hospitalizations associated to psychological well being and accidents. These results have been pushed by girls with beforehand low well being standing, suggesting that undifferentiated and abrupt will increase in pension age may hurt extra susceptible staff. Coherently with the milder tightening of retirement age skilled by males, labor market responses have been smaller in dimension, and they didn’t endure any vital well being results.
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