Retirement, Early Retirement and Disability: Explaining Labor Force Participation after 55 in France

46 Pages Posted: 26 Jul 2014

See all articles by Luc Behaghel

Luc Behaghel

Paris School of Economics; National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST)

Didier Blanchet

National Institute of Statistics and Economic Studies (INSEE)

Muriel Roger

Banque de France

Multiple version iconThere are 2 versions of this paper

Date Written: July 1, 2014

Abstract

We analyze the influence of health and financial incentives on the retirement behavior of older workers in France, building upon Stock and Wise (1990) option value approach. The model accounts for three main retirement routes: the normal retirement, disability insurance (DI) and unemployment/preretirement pathways, and is estimated with a combination of microeconomic datasets that include the French data of the European SHARE survey. The estimates confirm that a decrease in the generosity of the pension and DI schemes induces people to stay longer in the labor market, and that people with better health tend to retire later. We present extreme situations simulating what individual's retirement behavior would have been if only one retirement route had existed and in the absence of constraints on work capabilities. We show that average years of work between 55 and 64 are nearly 14% greater when regular retirement incentives are applied to the whole population than when it is DI rules that are systematically applied.

Keywords: Pensions, Social Security, Disability, Labor force participation, Senior

JEL Classification: H55, J14, J26

Suggested Citation

Behaghel, Luc and Blanchet, Didier and Roger, Muriel, Retirement, Early Retirement and Disability: Explaining Labor Force Participation after 55 in France (July 1, 2014). Banque de France Working Paper No. 500, Available at SSRN: https://ssrn.com/abstract=2471459 or http://dx.doi.org/10.2139/ssrn.2471459

Luc Behaghel (Contact Author)

Paris School of Economics ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

Didier Blanchet

National Institute of Statistics and Economic Studies (INSEE) ( email )

18, Boulevard Adolphe-Pinard
75675 Paris Cedex 14
France

Muriel Roger

Banque de France ( email )

France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
23
Abstract Views
331
PlumX Metrics