Retirement Behaviour and Retirement Incentives in Spain
Banco de España
Bank of Spain
Clara I. Gonzalez
Foundation for Applied Economic Research (FEDEA)
March 26, 2009
In this paper we analyze the role that Social Security wealth and incentives play in the transition to retirement in Spain. We use the labour records and other relevant information contained in a newly released database ( Muestra Continua de Vidas Laborales 2006,) to construct incentive measures stemming from the Social Security provisions in relation to retiring at old age and investigate the role played by such incentives and by other socio-economic variables on the retirement hazard. We compute the effects of the reform that took place in 2002, which made the requirements to access an old pension stricter in general. We carry out a dynamic reduced-form analysis of the retirement decision using a duration model.
Our results show that both the pension wealth and substitution effects have a significant role on retirement decisions, but that the latter has less relevance as from the reform introduced in 2002.
Number of Pages in PDF File: 32
Keywords: older workers employment, retirement, public pensions
JEL Classification: J14, J26
Date posted: January 26, 2012