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Pension Reform and Labor Supply

As unfunded pension liabilities grow, governments experiment with ways to curb costs. We examine the effect of a representative cost-cutting reform on the retention and productivity of workers. The reform reduced pension annuities and increased penalties for early retirement, projected to save 8 percent of revenues. We leverage administrative records and a discontinuity in the reform to estimate its effect on labor supply. The reform slightly increased worker retention, and we can rule out small attrition effects. The reform had no effect on worker output. The extensive and intensive margins of labor supply appear to be maintained under the reform.

Keywords
pension reform, achievement, teacher retention
Education level
Document Object Identifier (DOI)
10.26300/5pat-r352

EdWorkingPaper suggested citation:

Johnston, Andrew C., and Jonah Rockoff. (). Pension Reform and Labor Supply. (EdWorkingPaper: 22-512). Retrieved from Annenberg Institute at Brown University: https://doi.org/10.26300/5pat-r352

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