Details

Autor(en) / Beteiligte

• Giesecke, Matthias
• Jäger, Philipp

Titel

Pension incentives and labor supply: Evidence from the introduction of universal old-age assistance in the UK

Ist Teil von

• Journal of public economics, 2021-11, Vol.203, p.104516, Article 104516

Ort / Verlag

Elsevier B.V

Erscheinungsjahr

2021

Quelle

Elsevier ScienceDirect Journals

Beschreibungen/Notizen

• •The introduction of public pensions in the UK in 1909 reduced labor supply.•Despite the clear labor supply decline, the reform most likely increased welfare.•The behavioral response suggests that future pension reforms need to be profound. We study the labor supply implications of the Old-Age Pension Act (OPA) of 1908, which, for the first time, provided pensions to older people in the UK. Using recently released census data covering the entire population, we exploit variation at the newly created age-based eligibility threshold. Our results show a considerable and abrupt decline in labor force participation of 6.0 percentage points (13%) when older workers reach the eligibility age of 70. To mitigate the impact of population aging today, pension reforms aimed at increasing elderly labor supply, however, have to induce much larger behavioral responses than the OPA.