Abstract
We analyze how a reduction in retirement age affects pre-retirement sickness absences and health problems. We examine a policy change in pension eligibility in the Swiss construction sector, which lowered retirement age from 65 to 60. While the reform was intended to improve workers' health, it resulted in the opposite outcome. We find that sickness absences for 56–60-year-old construction workers increase by 33% when working until 60 instead of 65, and their probability of self-reported health problems increases by 54%. We also find a negative but less pronounced effect for the 61–65 age group. Our results imply that lowering the retirement age has not only material costs but also unintended immaterial costs. If the effect is symmetric, it implies that increasing retirement age has immaterial benefits by improving pre-retirement health of older workers.
Highlights
An aging population is one of the most pressing socioeconomic and political issues in developed countries
We focus on a pension reform in Switzerland in 2003, which reduced the retirement age of Swiss construction workers from 65 to 60
We have analyzed whether lowering the retirement age for construction workers has a negative effect on their health outcomes before they reach the new retirement age
Summary
An aging population is one of the most pressing socioeconomic and political issues in developed countries. This sobering result is in line with the findings of other authors who have investigated the effectiveness of safety and injury prevention programs (Kines et al 2007, Hengel et al 2013, Viester et al 2015) In this context, surprisingly, there is no evidence of how changes in the work horizon (i.e., the time left to retirement) influence the health outcomes among groups engaged in intensive manual work. This paper is the first to provide an analysis of how lowering the retirement age jeopardizes the health of older workers by increasing the probability and duration of their sickness absences, as well as their probability of suffering from poor health. Almost all empirical investigations that we have reviewed have examined reforms that increase the SRA and the early retirement age (ERA).
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
