Impact of Contemporary Pension Reforms on Households’ Welfare

Abstract

Purpose: Identification and assessment of the consequences of raising the retirement age and possible changes in the households’ welfare because a part of the pre-retirement age population will remain in the labor force five years longer. Design/Methodology/Approach: The initial data for the analysis and modeling are the data of a representative survey on the “Russian Longitudinal Monitoring Survey - HSE” project for 2017. The object of the analysis were women aged 55 and older and men of 60 years and older. Microsimulation was carried out, that is all men aged from 60 to 65 and women from 55 to 60 were conditionally transferred to the working population, and changes in their employment and incomes were estimated. Based on the econometric model, an assessment of factors that are incentives to continue working after retirement has been obtained. Results: The presented calculations indicated the fact that despite an increase in the labor supply due to an increase of the retirement age, no employment surplus in the labor market is foreseen. Currently, the poverty level among retired households is significantly lower than the average one, and this trend will continue in the future. Practical implications: The results are important for the adjustment of social policy for retirees. Originality/Value: The study revealed the following new trends: 1) with the growth of the educational level, the probability of employment after the retirement age increases; 2) all other things being equal, women after retirement have a greater chance of being employed than men do; 3) for the majority of retirees employment is not traumatic.