The Effects of Increasing the Eligibility Age for Public Pension on Individual Labor Supply: Evidence from Japan
By Nobuhiko Nakazawa
This paper investigates the effects of increasing the eligibility age for public pension on workers’ retirement decisions, focusing on recent Japanese public pension reforms. In Japan, the pensionable age for Employees’ Pension Insurance benefits gradually increased from 60 to 65 for males over the course of a decade. Using individual-level administrative data and a regression discontinuity design, I find that raising the pensionable age for flat-rate benefits by one year increases male employment at the critical ages by about 7-8 percentage points. Individual labor supply responses are heterogeneous across closeness to the implementation date due to anticipatory responses. I also find some evidence of spillovers from an affected husband to his wife and children and effects on other labor market outcomes.
Source: SSRN
