'Voluntary' and 'Involuntary' Early Retirement: An International Analysis

30 Pages Posted: 21 Apr 2007

See all articles by David Dorn

David Dorn

University of Zurich - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Alfonso Sousa-Poza

University of Hohenheim - Institute of Household and Consumer Economics; IZA Institute of Labor Economics

Date Written: March 2007

Abstract

Recent literature makes a distinction between "voluntary" and "involuntary" early retirement, where "involuntary" early retirement results from employment constraints rather than from a preference for leisure relative to work. This paper analyzes "voluntary" and "involuntary" early retirement based on international microdata covering 19 industrialized countries. The results show that "involuntary" early retirement is particularly widespread in Continental Europe. Countries facing economic recessions and having strict employment protection legislation have higher shares of "involuntary" retirements among early retirees. Generous early retirement provisions of the social security system do not only make "voluntary" early retirement more attractive for individuals, but also induce firms to push more employees into early retirement.

Keywords: early retirement, involuntary early retirement, social security, pensions

JEL Classification: J14, J21, J22, J26

Suggested Citation

Dorn, David and Sousa-Poza, Alfonso, 'Voluntary' and 'Involuntary' Early Retirement: An International Analysis (March 2007). IZA Discussion Paper No. 2714, Available at SSRN: https://ssrn.com/abstract=981700

David Dorn

University of Zurich - Department of Economics ( email )

Z├╝rich
Switzerland

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Alfonso Sousa-Poza (Contact Author)

University of Hohenheim - Institute of Household and Consumer Economics ( email )

Fruwirthstrasse 48
Kavaliershaus 4 116
70599 Stuttgart
Germany
++49 (0)711/459-22863 (Phone)
++49 (0)711/459-23953 (Fax)

HOME PAGE: http://www.uni-hohenheim.de/hhoek/englisch/people/alfonsosousapoza/index.html

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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