Large Response to Delayed Eligibility or a Pre-Existing Trend in Female Participation? Re-Examining an Australian Pension Reform

Abstract

Atalay and Barrett (Review of Economics and Statistics 2015, 97(1): 71–87) study an Australian reform that increased women’s pension age from 60 to 65. Using repeated surveys and a differences-in-differences design in which males form the comparison group, they estimate that the reform increased female labor force participation by 12 percentage points. I successfully replicate this estimate but show, using earlier data, that the parallel-trends assumption did not hold before the reform because of a female-specific participation trend across cohorts. Accounting for this trend, the estimated effect on female participation falls by two-thirds and becomes statistically insignificant at conventional levels.

Keywords: retirement age, labor supply, cohort effects

JEL Classification: H55, J26