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3

Work, Retirement, and Pensions

Labor market participation and patterns of work among older men and women have changed dramatically over the past 20 years, as have pension systems and sources of retirement income. There are many key economic, health, and social factors behind these changes. Yet, as emphasized in Chapter 1, not all countries or all individuals within a country have experienced the same trends, and understanding these differences is central for identifying the key determinants of the changes that have occurred. Achieving such understanding, in turn, requires the collection of detailed scientific data for comparative study. The objective of this chapter is to set forth some basic facts about these changes, drawn from a wide range of experience across countries, and to suggest minimal data requirements for the successful understanding of these phenomena. A central theme is that much can be learned from careful comparative analyses of policy reforms and changes in work and retirement behavior across countries.

With regard to work patterns, there is evidence that retirement increasingly occurs in different forms (Lazear, 1986; Organization for Economic Co-operation and Development, 1995a; National Research Council, 1996). In fact, many countries that have experienced a decrease in labor market attachment among older workers have done so without any change in the normal retirement age. Although social norms and the demand for the labor supplied by older workers play a role, changes in retirement patterns also depend heavily on the precise form of early retirement provisions in pension and social security plans, as well as on the structure of income support and welfare programs for older individuals



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Page 66 3 Work, Retirement, and Pensions Labor market participation and patterns of work among older men and women have changed dramatically over the past 20 years, as have pension systems and sources of retirement income. There are many key economic, health, and social factors behind these changes. Yet, as emphasized in Chapter 1, not all countries or all individuals within a country have experienced the same trends, and understanding these differences is central for identifying the key determinants of the changes that have occurred. Achieving such understanding, in turn, requires the collection of detailed scientific data for comparative study. The objective of this chapter is to set forth some basic facts about these changes, drawn from a wide range of experience across countries, and to suggest minimal data requirements for the successful understanding of these phenomena. A central theme is that much can be learned from careful comparative analyses of policy reforms and changes in work and retirement behavior across countries. With regard to work patterns, there is evidence that retirement increasingly occurs in different forms (Lazear, 1986; Organization for Economic Co-operation and Development, 1995a; National Research Council, 1996). In fact, many countries that have experienced a decrease in labor market attachment among older workers have done so without any change in the normal retirement age. Although social norms and the demand for the labor supplied by older workers play a role, changes in retirement patterns also depend heavily on the precise form of early retirement provisions in pension and social security plans, as well as on the structure of income support and welfare programs for older individuals

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Page 67(Burtless and Moffitt, 1984; Börsch-Supan and Schnabel, 1998, 1999). As a result, data with which to study retirement will need to include a wide range of information on potential income sources and earning opportunities (National Research Council, 1997; Hurd, 1998). Moreover, the collection of these data must begin much earlier than at normal retirement age, possibly as early as age 45. Health status also plays a role in retirement decisions (Bound et al., 1999), and it will therefore be necessary as well to stress the importance of accurate health and disability information. It may well be that changes in workplace environment or even the act of retirement itself may affect health and disability outcomes. Longitudinal data that record the timing of these work, retirement, and health events are therefore essential. A further complication arises from the need to compute accurate summary measures of retirement incentives. As discussed below, different countries and different individuals within a country vary considerably with regard to the mix of private and public pension entitlements. Moreover, contribution periods and contribution rules can pose significant challenges for lifetime data collection. However, relatively simple summary measures can be collected through a sensible mix of longitudinal survey data and access to administrative sources. Indeed, the need to supplement standard sample survey data with administrative data is a major requirement for accurate analysis and inference, a theme to which we return in Chapter 8. Measuring the work opportunities for older individuals requires careful consideration of the changing demand for older workers (Straka, 1992; Organization for Economic Cooperation and Development, 1995b). For example, the earnings profiles of those who remain in work may provide a misleading guide to the earnings opportunities of those who leave the labor force early. This will be especially true if those who withdraw early are predominantly from a single skill group or industry. For measuring changes in work opportunities there is no real alternative to having accurate earnings histories with skill and occupational information. Comparative analysis is particularly effective in enhancing understanding of the issues surrounding work and retirement, and there already exist many successful comparative studies in this area (see, e.g., Quinn and Burkhauser, 1994; Gruber and Wise, 1998, 1999; Johnson, 1999; Hermalin and Chan, 2000; Borsch-Supan, 2000b; Disney and Johnson, in press). These studies have documented the differing experiences of various countries and have significantly enhanced understanding of the retirement process. Comparisons are particularly instructive among countries that have experienced differing trends in retirement but, on the basis of standard economic and demographic statistics, might otherwise appear rather similar.

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Page 68 A sophisticated comparative analysis can exploit changes in policy rules across countries to isolate the impact of policy from that of other macroeconomic and social changes. Gruber and Wise (1999) managed to uncover three important features in their analysis of 11 developed countries that could not easily be discerned from single-country studies. First was a strong correspondence between early and normal retirement ages and departure from the labor force. Second, public pension provisions in most countries were found to place a heavy tax burden on work past the age of early retirement eligibility and thus to provide a strong incentive to withdraw early from the labor force. Third, the implicit tax—and thus the incentive to leave the labor force was found to vary substantially among countries, as did retirement behavior. Through such cross-national comparisons, then, some general conclusions about the relationship between retirement incentives and retirement behavior can begin to be drawn. The remainder of this chapter provides more detail on these issues. First, we consider the evidence on patterns of work and retirement across countries and highlight common trends, as well as note interesting differences in behavior. The following section addresses the measurement of retirement incentives and how they differ across countries. It also considers important policy reforms from around the world and their likely impact on retirement behavior. Finally, we take stock of the implications of these changes for data collection that is adequate to enable the accurate description of work patterns and retirement incentives at the approach of retirement age and thereafter. We realize that there are other, related issues that are not emphasized here. Some, such as the importance of health status and wealth, are discussed more thoroughly elsewhere in this volume; others are mentioned briefly at the end of this chapter. PATTERNS OF WORK AND RETIREMENT AROUND THE WORLD This section reviews labor force participation rates for men and women across a wide array of countries. These contrasts are of interest in themselves, but they take on special relevance in any examination of the determinants of retirement behavior. They highlight the importance of comparative analysis by showing that countries that for most part are rather similar economically and demographically can display considerable variation in retirement pattern. Along with more detailed individual-level data, such comparisons offer some hope for teasing out the main explanations for the observed variations in retirement behavior. While assessing the evidence on labor force participation, it is important to anticipate the discussion in the next section of the incentives to retire faced by individuals at older ages and consequently the mecha-

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Page 69nisms by which people support themselves when out of the labor market. This often means examining the role of early retirement. For example, Table 3-1 reveals that male labor force participation rates fall well before normal ages of retirement, indeed often well before eligibility for public pensions. To study these aspects of retirement and retirement income requires an understanding of the full range of potential sources of income for older individuals, including disability schemes and private pensions in addition to public pension or social security arrangements. Recent reforms in pension systems and the growth of private schemes in many countries increase the range of data needed to adequately describe retirement incentives, a point to which we return in detail in the concluding section of the chapter. The declining labor force participation of older persons and the general increase in female participation are the most significant feature of labor force change in the developed world over the past several decades. However, these changes have not been experienced in many developing countries, and there are vastly different trends even among developed countries in this regard. Japan and Belgium provide two of the most dramatic extremes. Figure 3-1 presents this contrast, with Germany included for comparison. The figure shows a surprisingly large decline in male participation with age in Belgium. By age 69, virtually no men in TABLE 3-1 Normal Pension Ages, Early Retirement Ages, and Employment Rates for Men in Nine Countries, circa 1995 Pension Age Employment Rates (%) Country Normal Early At Age 59 At Ages 60-64 Sweden 65 60 74 49 United Kingdom 65 60 62 50 United States 65 62 74 53 Germany 65 60 81 a 35 Italy 60 55 47 30 Netherlands 65 60 57 a 19 Australia 65 60 73 47 Japan 65 60 87 76 New Zealand b 65 63 80 a 50 a Refers to ages 55-59. b Pension age in New Zealand is currently being raised from 60 to 65; see Table 3-2. SOURCES: Gruber and Wise (1999); Johnson (1999).

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Page 70 ~ enlarge ~ FIGURE 3-1 Labor force participation rates for men aged 50-70 in three countries: Early-to-mid 1990s. SOURCE: Gruber and Wise (1999). Reprinted with permission. Belgium are working, whereas in Japan, almost half are still in the labor force. Indeed, most men in Belgium are no longer in the labor force at age 65, and only about a quarter are working at age 60. In Japan, on the other hand, nearly two-thirds are working at age 65 and three-quarters at age 60. Figure 3-2, for Europe and North America and for Australasia and Latin America, respectively, shows the labor force participation rates of men aged 55 to 59 since 1970. Even at these early ages, before early retirement ages in most public pension systems, wide differences in participation are apparent. As we have seen, Belgium has extremely low levels of participation; the situation there contrasts with that in Sweden, Denmark, and the United States, where participation rates have remained at about 80 percent. Figure 3-2 shows the strong decline in Australia, which contrasts with the relatively stable rates in Japan. It is above age 60 that differences across countries are most apparent (see Figure 3-3 and Figure 3-4). Figure 3-3 shows the sharp declines in France, Belgium, and Germany, which contrast with the much higher participation rates in the United States and Sweden. Among Australasian and Latin American countries, there are equally sharp declines in Australia

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Page 71 ~ enlarge ~ FIGURE 3-2 Labor force participation rates for men aged 55-59 in two regions: Circa 1970 to circa 1998. NOTE: Top panel—Europe and North America, bottom panel—Australasia and Latin America. SOURCE: International Labour Office, various years.

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Page 72 ~ enlarge ~ FIGURE 3-3 Labor force participation rates for men aged 60-64 in two regions: Circa 1970 to circa 1998. NOTE: Top panel—Europe and North America, bottom panel—Australasia and Latin America. SOURCE: International Labour Office, various years.

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Page 73 ~ enlarge ~ FIGURE 3-4 Labor force participation rates for men aged 65 and over in two regions: Circa 1970 to circa 1998. NOTE: Top panel—Europe and North America, bottom panel—Australasia and Latin America. SOURCE: International Labour Office, various years.

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Page 74 and New Zealand, whereas participation rates remain high in Indonesia and Japan. An intriguing feature of Figure 3-3 is the rise in participation rates experienced by New Zealand in the mid- to late 1990s. This increase closely follows the raising of the retirement age to 65 and the change in indexation of retirement benefits, which is discussed further in the next section. Note from Figure 3-4 that there is little impact on those men aged 65-plus. Indeed, the retirement behavior of men of this age in New Zealand and Australia looks quite similar. The contrast for women is even more illuminating, as discussed below. In general, the participation rates among men over age 65 show the most interesting variation in the Australasian and Latin American countries. Outside of New Zealand and Australia, men in this age group in these countries have relatively high participation rates. Men in Indonesia, Mexico, and Pakistan, for example, maintain rates above 50 percent into their late 60s. Of course, this high level of participation reflects in part less wealth than that of comparable men represented in the top panel of Figure 3-4. Similar experience has been documented in other developing countries. For example, Hermalin and Chan (2000) show high rates of male participation in Thailand and the Philippines. However, as that study also points out, such high rates are not common to all developing countries and depend on pension rules and coverage (the latter often being limited and highly selective), health factors, and family arrangements (see also Raymo and Cornman, 1999; Yashiro, 1997). Underlying these changes in participation rates over time are secular changes experienced by all age cohorts, as well as aging effects experienced by each cohort through its lifetime. This is particularly the case for women. Figure 3-5, for example, shows the participation rates of Swedish women aged 55-59 increasing year by year. However, if we look at the behavior of the 1976 cohort in 1981, when they are in the 60-64 age group presented in Figure 3-6, we see the participation rate has fallen from around 58 percent to about 42 percent. Younger cohorts of women in many countries are exhibiting a high rate of labor market participation at all stages in their life cycle. But it is still true that their participation rate declines, often quite dramatically, with age. Thus for each cohort group, patterns of retirement for women can match quite closely the declines experienced by their male counterparts, even though their overall participation rates at older ages are often observed to rise steadily. One useful contrast for older women is displayed in Figure 3-6, which shows falling rates of participation in France and extremely low rates in Belgium, mirroring the low attachment at older ages for men in both of these countries. These figures can be compared with the rising rates for older women in Sweden and the United States.

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Page 75 ~ enlarge ~ FIGURE 3-5 Labor force participation rates for women aged 55-59 in two regions: Circa 1970 to circa 1998. NOTE: Top panel—Europe and North America, bottom panel—Australasia and Latin America. SOURCE: International Labour Office, various years.

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Page 76 ~ enlarge ~ FIGURE 3-6 Labor force participation rates for women aged 60-64 in two regions: Circa 1970 to circa 1998. NOTE: Top panel—Europe and North America, bottom panel—Australasia and Latin America. SOURCE: International Labour Office, various years.

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Page 91sions. Finally, where occupational pensions are unfunded, as in much of the public sector in the United Kingdom, early retirement can be used as in state pay-as-you-go systems to relieve current pressures, but in a way that leads to growing cost pressures for the future. The important role of occupational pensions in the tendency to early retirement in the United Kingdom is illustrated in the top panel of Figure 3-7, which shows employment survival curves for men with and without an occupational pension (Blundell and Johnson, 1998; Blundell and Tanner, 1999). Those without an occupational pension, who tend to be much lower paid and less skilled, leave the labor force more rapidly in their 40s and early 50s. But the interesting point is that after about age 55, those with an occupational pension start leaving employment very rapidly indeed. The bottom panel of Figure 3-7 shows the same survival probabilities for women, and the retirement age of 60 is clearly visible. More detailed analysis of the effects on retirement behavior of incentives built into occupational schemes has been carried out in the United States by Lumsdaine et al. (1990, 1994) and Stock and Wise (1990a, 1990b). These studies have revealed very substantial effects of the specific incentives for workers to retire at particular ages that are offered by many U.S. occupational pension plans. Thus people react to the design of private pension plans in much the same way as they make use of generous government-sponsored early retirement programs. KEY DATA REQUIREMENTS To understand trends in work and retirement and to assess the impact of ongoing pension reforms and changes in retirement incentives, one must gather information on work histories and longitudinal data on earnings, marital status, health status, and disability. While long earnings histories are not typically needed under defined-benefit regimes (which are often based on the last few years of wages), such data are required to measure opportunities in work, as argued above. Moreover, many of the more recent pension reforms move in the direction of defining pension amounts on the basis of an individual's working history or payroll tax payments over the life cycle. Private pension funds are also shifting from final-salary benefits to average-salary benefits or even to defined-contribution schemes (see, e.g., Disney and Whitehouse, 1992, 1999). In addition, reforms tend to allow for more freedom in choice of retirement age. Such reforms thus provide interesting evidence about the influence of scheme-specific details on retirement behavior. This is not to diminish the importance of social factors (changes in marital status, partner's employment status, social participation, social networks) and health issues (functional ability and cognitive function) in

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Page 92 ~ enlarge ~ FIGURE 3-7 Employment survival probability for men and women aged 50-70 in the United Kingdom: Circa 1989. NOTE: Bold—Occupational pensions, Light—State Social Security pensions. SOURCE: Blundell and Tanner (1999).

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Page 93 the decision to retire. Retirement changes roles within a household, and a related issue is synchronization in the retirement decisions of couples. Changing roles related to retirement are also likely to affect social participation. But the form these changes take and the resulting impact on social participation depend on economic resources, preexisting social networks, and functional ability and cognitive functioning. It is also possible that individuals' perceptions and expectations regarding retirement and aging may influence changes in their social participation. In particular, expectations regarding future dependency and illness may become self-fulfilling, but such expectations may themselves be dependent on social position prior to retirement and local context (such as access to public transport). Public Pension Plan Provisions and Personal Attributes Understanding individual retirement decisions and how they relate to retirement programs requires evaluating the incentive effects of the programs' various provisions. Those effects in turn depend both on the plan provisions and on individual work histories, marital status, and other individual and family circumstances. As noted earlier, continuation in the labor force can mean a loss in public pension benefits. In many countries, this loss of benefits can offset a large fraction of the wage earnings a person would receive from continued work. Thus there is an implicit tax on work, and total compensation can be much less than net wage earnings. Given the variation in the magnitude of the public pension tax on work from country to country, the details of plan provisions must be known precisely. In addition, to conduct microanalysis of the effect of those provisions on individual retirement decisions, employment histories, family status, and other circumstances that determine individual accrual rates must also be known. Thus it is important to be able to match detailed plan provisions with individual survey data. Plan provisions are typically recorded in administrative documents and can usually be obtained rather easily. Data on individual attributes can be gathered from many different sources. For instance, in many countries administrative data collected as part of public pension programs include the individual data used to determine benefits, and in this sense are ideal. These data files are also typically very large and may allow analysis by birth cohort, for example. Administrative data, however, do not typically include information on other individual attributes, such as health status, that may have an important effect on retirement decisions. Surveys such as the Health and Retirement Survey in the United States include such data. They may also include administrative

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Page 94data that can be used in conjunction with the survey data (for example, the Health and Retirement Survey obtains Social Security earnings histories). Thus one must take a flexible approach to data collection. Disability, Unemployment, and Private Pension Plan Provisions In many countries, disability and unemployment insurance programs effectively provide for early retirement before the explicit public pension early retirement age. In Germany, for example, the path to retirement for most employees is not the public pension system narrowly defined, but rather unemployment and disability insurance programs. Such programs are also important in France, Belgium, the Netherlands, and other countries. Thus in addressing public pension reform, these programs must be considered as well. Ideally, one should also know which paths to retirement are available to each person. One who is eligible for disability benefits, for example, typically faces much greater early retirement incentives than one not eligible for these benefits. Eligibility usually depends on program provisions and individual circumstances that are often difficult to determine from administrative or survey data. For this reason, a new way to obtain these data may be desirable. Perhaps surveys could collect the necessary individual information, which, together with plan provisions, would allow determination of eligibility. The public pension system is the principal source of retirement benefits in many countries, whereas in others it is only one of multiple sources of retirement support. In the United States, the United Kingdom, the Netherlands, Canada, and Japan, for example, employer-provided pension plans are a key source of benefits. Indeed in some countries, such as the United States, employer-provided benefits are often integrated with public pension benefits. The incentive effects of these private defined-benefit plans are quite similar to those of public pension programs. Thus in some countries it may be necessary to consider public and private plans jointly. Where the latter plans are prevalent, it is important to try to obtain the information needed to calculate accrual for these plans, just as for public plans. This task is often complicated by great variation in the provisions of employer plans. As noted above, the most dramatic change in retirement saving in the United States is the growth in individual retirement saving plans. Individuals must decide how much to contribute to these accounts, how to invest their contributions, and how to withdraw funds after retirement. In 1980, almost 92 percent of pension plan contributions were to traditional employer-provided plans, and about 64 percent of these contributions were to conventional defined-benefit plans. Today, almost 60 percent of contributions are to personal retirement accounts, including 401(k),

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Page 95IRA, and other plans. Including employer-provided (non-401[k]) defined-contribution plans, more than 76 percent of contributions are to plans controlled in large measure by individuals. For persons retiring three decades from now, personal assets in 401(k) plans alone are likely to be substantially greater than public pension wealth (see Poterba and Samwick, 1999; Poterba and Wise, 1999; Poterba et al., 1999). As noted earlier, a critical feature of these plans is that they have none of the retirement incentive effects of public pension and other defined-benefit programs. Thus they must be considered by those attempting to understand future retirement incentives. Other Related Data In addition to financial incentives to retire, a comprehensive analysis of retirement should account for individual attributes, in particular health status, but also job attributes that may affect the benefit gained from working. Such effects could be additional costs of early retirement beyond the implicit financial tax on work discussed earlier. This observation also raises the question of “productive activity” and how it might be measured; it would surely include more than paid employment. The goals of data collection should also be conditioned by looking forward. What issues are likely to arise? Gradual withdrawal from the labor force, which is uncommon now but may become more prevalent in the future, is one such issue. The increased entry of women into the labor force has promoted more flexible work arrangements, and computers have facilitated work at home. What would facilitate gradual rather than precipitous departure from the labor force? How would firm institutional arrangements have to be changed? What information would help answer these questions? There are also close connections between retirement and the domains discussed in other chapters of this report. Saving for retirement and health status are obviously related to retirement. Perhaps less obvious is the relationship between demographic projections and retirement incentives. For example, projected dependency ratios may depend importantly on pension plan provisions and their effect on the proportion of older persons out of the labor force. Because the provisions of public pension plans often constitute strong incentives for early retirement, it may be valuable to understand the reasons for such provisions. There are two distinct issues here. First, while it appears clear that public pension provisions affect labor force participation, it is also apparent that in at least some instances the provisions were adopted to encourage older workers to leave the labor force. For example, anecdotal evidence suggests that in some countries, it was thought

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Page 96that the withdrawal of older employees from the workforce would provide more job opportunities for young workers. This possibility does not call into question a causal interpretation of the relationship between plan provisions and retirement. To the extent that it is true, it simply means that in some instances the provisions were adopted for a particular reason—and the data show that they worked. The second issue, however, does complicate data analysis. It can be argued that to some extent at least, public pension provisions were adopted to accommodate existing labor force participation patterns, rather than the patterns being determined by the provisions. For example, early retirement benefits could be provided to support persons who are unable to find work and thus already out of the labor force. Early retirement programs related to disability and unemployment could also have been adopted to accommodate preexisting labor force departure rates, and this possibility must temper a causal interpretation of the relationship between program provisions and retirement. To address either or both of these issues requires historical data on unemployment rates, which are typically available from existing country data sources. But complete analysis may also require study of legislative records and other less quantitative data sources. If a goal is to understand how a given system might be improved, it is often useful to understand as well how it came about in the first place. Throughout this chapter, we have focused on individual attributes and the incentives faced by individuals, and on corresponding data collection. We have given little attention to macro labor market analysis (e.g., labor demand for older workers) and macro determinants of retirement (e.g., the role of pensions in the labor market; see Gustman et al., 1994), age-related changes in productivity, or the potential importance of firm goals and changing firm characteristics. In many respects, this latter arena is almost a separate direction of study requiring a separate data collection effort, and we have not explicitly addressed what is likely to become an important area of inquiry (see, e.g., National Research Council, 1997; Haltiwanger et al., 1999a; 2000). Some countries have administrative data that link individual attributes to the firms in which people work and thus to characteristics of the firms (Lane et al., 1998; Abowd and Karmarz, 1999; Haltiwanger et al., 1999b). In principle, this sort of connection could be drawn as an add-on to individual-based data collection efforts. It might also be important to study firm internal labor markets and institutional arrangements that might, for example, affect the possibility for older workers to withdraw gradually from the labor force. In some countries, such as the United States, age discrimination laws may have an important effect on these arrangements. In many instances, it would be difficult for an older worker to obtain a lower wage while

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Page 97assuming less responsibility in order to stay in the labor force longer. These issues have not been forgotten, but merely are not emphasized in this chapter. Finally, it is surely the case that cultural values and social preferences affect the generosity of retirement plans, and changing preferences may have affected recent changes in retirement plans. We have chosen in this chapter to avoid focusing on social preferences and cultural values, instead emphasizing systematic quantitative data collection, consistent with the focus of the volume as a whole. Indeed the key illustrative analysis presented in the chapter shows that the incentive effects of plan provisions appear to be highly comparable over countries with widely varying social histories. RECOMMENDATIONS 3-1. National and cross-national studies should focus on the retirement incentive effects of the provisions of public pension plans. The magnitude of social security taxes on work differs greatly from country to country, and must be understood through careful monitoring of the details of plan provisions and conversion of those provisions into economically meaningful measures—such as benefit accrual rates—that can be related to individual retirement decisions. These measures can then be compared across nations to examine differential policy effects. 3-2. The nature and effects of disability and unemployment insurance programs should be considered when analyzing retirement schemes and individual retirement choices. Disability and unemployment insurance programs in many countries effectively provide for early retirement before the explicit early retirement age and must be considered in conjunction with the public pension program itself. One must be able to calculate accrual under both types of programs. Data also are needed on the paths to retirement that are available to individuals, in particular on the interaction between eligibility criteria and individual circumstances. 3-3. Research into patterns of work and retirement should include consideration of the interaction of private retirement plans and public programs. A growing number of countries, including many in the developing world, now have compulsory private pension schemes. Such schemes are likely to proliferate as nations attempt to reform and/or extend pension coverage. A critical feature of these plans is that they have none of the retirement incentive effects of public and other defined-benefit programs. Where these plans are prevalent, it is necessary to collect information that will allow calculation of accrual as a means of understanding likely associated retirement incentives.

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Page 98 3-4. To understand individual retirement choices, information on individual work histories, earnings histories, health status, saving, and other individual attributes should be collected in addition to data on public and private plan provisions. The most effective way to collect the broad array of individual data on the determinants of retirement choices is through longitudinal surveys that address a range of behavioral domains. Data from such surveys can often be supplemented with administrative data files that provide earnings histories, and are in fact used currently to analyze retirement behavior in many countries. REFERENCES Abowd, J.M., and F. Kramarz 1999 Econometric analysis of linked employer-employee data. Labour Economics 6: 53-74 . Baker, M., and D. Benjamin 1996 Early Retirement Provisions and the Labour Force Behavior of Older Men: Evidence from Canada. Unpublished paper. University of Toronto . Bateman, H., and J. Piggott 1997 Private Pensions in OECD Countries – Australia . Labour Market and Social Policy Occasional Papers 23. Paris : Organization for Economic Co-operation and Development . Blau, D. 1994 Labour force dynamics of older men. Econometrica 62: 117-156 . Blundell, R., and P. Johnson 1998 Pensions and labor force participation in the UK. American Economic Review 88(2): 173-178 . Blundell, R.W., and S. Tanner 1999 Labour Force Participation and Retirement in the UK. Paper prepared for the Panel on a Research Agenda and New Data for an Aging World, Committee on Population, National Research Council . Börsch-Supan, A. 2000a Data and Research on Retirement in Germany. Paper prepared for the Panel on a Research Agenda and New Data for an Aging World, Committee on Population, National Research Council. 2000b Incentive effects of social security on labour force participation: Evidence in Germany and across Europe. Journal of Public Economics 78(1-2): 25-49 . Börsch-Supan, A., and R. Schnabel 1998 Social security and declining labour force participation in Germany. American Economic Review 88(2): 173-178 . 1999 Social security and retirement in Germany. In International Comparison of Social Security Systems , J. Gruber and D. Wise, eds. Chicago : The University of Chicago Press . Bound, J., M. Schoenbaum, T.R. Stinebrickner, and T. Waidmann 1999 The dynamic effect of health on the labor force transitions of older workers. Labour Economics 6(2): 179-202 .

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