Abstract
PurposeThe purpose of this paper is to examine whether cross-country differences in pensionable age explain such differences in economic activity of people at near-retirement age.Design/methodology/approachThe empirical study uses regression models for macro-panel encompassing 21 European countries in the period 2008–2014.FindingsEmpirical results indicate that pensionable age is a determinant of cross-country differences in employment rate in the near-retirement age group, and less a factor differentiating average effective retirement age. It turns out that other factors matter, including salaries and wages as percentage of GDP (treated as a proxy for the occupational composition of populations across the countries studied), self-employment, participation in education and training, or self-perceived health.Social implicationsThe problem of economic activity at the near-retirement age is complex and cannot be limited to legal regulations concerning pensionable age. The policy aiming at stimulating the economic activity of the near-elderly should include actions on many sides including labour market, pension system, education, training, or health care.Originality/valueThe results complement studies based on the single-country approach and demonstrate that pensionable age does not account for cross-country differences in terms of average effective age of retirement when controlling for other factors. Moreover, factors differentiating effective retirement age and employments rates across countries studied are not similar.
Highlights
The perception of a pension system as a tool for dividing current gross domestic product (GDP) between the working generation and the generation of pensioners (Barr and Diamond, 2006; Gora, 2008) motivates the search for an actual frontier between them
The results of estimation demonstrate that in the case of both models for average effective retirement age (AER) for men and women, pensionable age (RA) is not a significant predictor by a used set of control variables. This does not mean that there is no correlation between the average effective age of retirement and pensionable age
It turned out that pensionable age matters in case of differences in terms of employment rate, it does not affect cross-country diversity of average effective age of retirement
Summary
The perception of a pension system as a tool for dividing current gross domestic product (GDP) between the working generation and the generation of pensioners (Barr and Diamond, 2006; Gora, 2008) motivates the search for an actual frontier between them.
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