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Working Time Reductions at the End of the Career. Do They Prolong the Time Spent in Employment?

Bart Cockx (UGent) , Andrea Albanese (UGent) and Yannick Thuy (UGent)
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Abstract
In this paper we study the effects on the survival rate in employment of a scheme that facilitates gradual retirement through working time reductions. We use information on the entire labour market career and other observables to control for selection and take dynamic treatment assignment into account. We also estimate a competing risks model considering different (possibly selective) pathways to early retirement. We find that participation in the scheme initially prolongs employment, as participants keep accumulating full pension rights. However, as participants become eligible for early retirement subsequently, these larger financial incentives induce them to leave the labour force prematurely. These adverse incentives are stronger for individuals who reduce their working time most. After two (four) years for men (women), the positive effects reverse. The more favourable effect for women is likely a consequence of their lower opportunities to enter early retirement. The gradual retirement scheme fails the cost-benefit test.
Keywords
part-time work, older workers, Inverse Probability Weighting, dynamic selection into treatment, endogenous sampling

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Please use this url to cite or link to this publication:

MLA
Cockx, Bart, Andrea Albanese, and Yannick Thuy. “Working Time Reductions at the End of the Career. Do They Prolong the Time Spent in Employment?” IZA discussion paper 2015 : n. pag. Print.
APA
Cockx, B., Albanese, A., & Thuy, Y. (2015). Working Time Reductions at the End of the Career. Do They Prolong the Time Spent in Employment? IZA discussion paper. Bonn: IZA.
Chicago author-date
Cockx, Bart, Andrea Albanese, and Yannick Thuy. 2015. “Working Time Reductions at the End of the Career. Do They Prolong the Time Spent in Employment?” IZA Discussion Paper. Bonn: IZA.
Chicago author-date (all authors)
Cockx, Bart, Andrea Albanese, and Yannick Thuy. 2015. “Working Time Reductions at the End of the Career. Do They Prolong the Time Spent in Employment?” IZA Discussion Paper. Bonn: IZA.
Vancouver
1.
Cockx B, Albanese A, Thuy Y. Working Time Reductions at the End of the Career. Do They Prolong the Time Spent in Employment? IZA discussion paper. Bonn: IZA; 2015.
IEEE
[1]
B. Cockx, A. Albanese, and Y. Thuy, “Working Time Reductions at the End of the Career. Do They Prolong the Time Spent in Employment?,” IZA discussion paper, vol. 9619. IZA, Bonn, 2015.
@misc{8509638,
  abstract     = {In this paper we study the effects on the survival rate in employment of a scheme that facilitates gradual retirement through working time reductions. We use information on the entire labour market career and other observables to control for selection and take dynamic treatment assignment into account. We also estimate a competing risks model considering different (possibly selective) pathways to early retirement. We find that participation in the scheme initially prolongs employment, as participants keep accumulating full pension rights. However, as participants become eligible for early retirement subsequently, these larger financial incentives induce them to leave the labour force prematurely. These adverse incentives are stronger for individuals who reduce their working time most. After two (four) years for men (women), the positive effects reverse. The more favourable effect for women is likely a consequence of their lower opportunities to enter early retirement. The gradual retirement scheme fails the cost-benefit test. },
  author       = {Cockx, Bart and Albanese, Andrea and Thuy, Yannick},
  keywords     = {part-time work,older workers,Inverse Probability Weighting,dynamic selection into treatment,endogenous sampling},
  language     = {eng},
  publisher    = {IZA},
  series       = {IZA discussion paper},
  title        = {Working Time Reductions at the End of the Career. Do They Prolong the Time Spent in Employment?},
  url          = {http://ftp.iza.org/dp9619.pdf},
  volume       = {9619},
  year         = {2015},
}