Title: Introduction to De Economist Special Issue “Retirement and Employment Opportunities for Older Workers”
Abstract: Since the seminal work of Gruber and Wise (1999), for many countries there is a continuing stream of papers that addresses the role of financial incentives in the retirement decision of workers. Generally, these papers show that workers do respond to incentives that encourage them to retire later, thus contributing to a sufficiently large workforce and adding to the sustainability of pension systems. At the same time, many Western European countries have gone through a process of pension system reforms, with benefit cuts, higher statutory pensioning ages and stricter eligibility constraints as most common policy measures. And while labor participation rates of older individuals have increased as a result of this, the new question has risen how the additional of older labor supply should be mobilized at best—thus tackling the so called ‘age-productivity-pay nexus’.1 While there is consensus on the impact of financial incentives on retirement behavior, the desirability of pension reforms is still highly disputed in most countries. In light of the current global economic crisis, this is not very surprising. With low or even negative economic growth, increasing retirement age seems less urgent, or— from another perspective—can even be perceived as ‘unfair’ to younger workers who face a high risk of unemployment. At the same time, if older workers become unemployed, they typically have low return-to-work rates. Increasing statutory retirement ages may therefore lead to an increased use of other schemes, like Unemployment Insurance, SocialAssistance orDisability Insurance.Understanding thesemechanisms is important in assessing the overall desirability of pension reforms. Unfortunately, the evidence on these matters is still scarce, particularly on the income effects of reforms