Workers' Employment Rates and Pension Reforms in France: The Role of Implicit Labor Taxation

43 Pages Posted: 8 Apr 2019

See all articles by Didier Blanchet

Didier Blanchet

National Institute of Statistics and Economic Studies (INSEE)

Antoine Bozio

Paris School of Economics (PSE)

Simon Rabaté

Paris School of Economics (PSE)

Muriel Roger

Université Paris I Panthéon-Sorbonne - CES/CNRS

Date Written: April 2019

Abstract

Over the last fifteen years, France has experienced a reversal of older workers’ labor force participation and employment rates. Changes in health, life expectancy or education levels over the period are trend variables and thus cannot explain this “U-shaped” time profile. Pension reforms and associated changes in monetary incentives to retire are a more plausible explanation. Their impact is measured by the implicit tax rate on working longer, which combines induced changes in the level of benefits and the fact of foregoing one year of these benefits. We also account for changes in the relative importance of alternative pathways to normal retirement. Pension reforms and access to these alternative pathways have moved in ways that can account for a significant part of the “U-shaped” pattern of older workers labor force participation.

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Suggested Citation

Blanchet, Didier and Bozio, Antoine and Rabaté, Simon and Roger, Muriel, Workers' Employment Rates and Pension Reforms in France: The Role of Implicit Labor Taxation (April 2019). NBER Working Paper No. w25733. Available at SSRN: https://ssrn.com/abstract=3368023

Didier Blanchet (Contact Author)

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

18, Boulevard Adolphe-Pinard
75675 Paris Cedex 14
France

Antoine Bozio

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Simon Rabaté

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Muriel Roger

Université Paris I Panthéon-Sorbonne - CES/CNRS ( email )

106 bv de l'Hôpital
Paris, 75013
France

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