Social Security and Retirement During Transition: Microeconometric Evidence from Slovenia

LICOS Discussion Paper No. 221/2008

27 Pages Posted: 25 Nov 2008

See all articles by Ales Ahcan

Ales Ahcan

University of Ljubljana - Faculty of Economics

Saao Polanec

University of Ljubljana - Faculty of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 2008

Abstract

In this paper we analyse old-age retirement decisions of Slovenian men and women eligible to retire in the period 1997-2003. In comparison to established market economies, we find relatively high hazard rates of retirement that decline with age. This peculiar pattern can be partly attributed to weak incentives to work inherent in the design of Social Security, and is reflected in predominantly negative values of accruals, and to transition-specific increase in wage inequality in the late 1980s and early 1990s. This is reflected in low wages and relatively high pensions of less productive (skilled) workers and vice versa. We also find that the probability of retirement increases with social security wealth and decreases with net wages, although the response to option value to work, when controlling for wage differences, is rather weak. Our results also imply that less educated persons, persons with greater private wealth, and persons entitled to severance payment are more likely to retire.

Keywords: retirement, option value, social security wealth, transition

JEL Classification: J26

Suggested Citation

Ahcan, Ales and Polanec, Saso, Social Security and Retirement During Transition: Microeconometric Evidence from Slovenia (October 2008). LICOS Discussion Paper No. 221/2008, Available at SSRN: https://ssrn.com/abstract=1306915 or http://dx.doi.org/10.2139/ssrn.1306915

Ales Ahcan (Contact Author)

University of Ljubljana - Faculty of Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia

Saso Polanec

University of Ljubljana - Faculty of Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
43
Abstract Views
528
PlumX Metrics