Économie et Statistique n° 397 - 2006 Why has the American Trade Balance Continued Deteriorating despite the Depreciation of the Dollar? - Older Workers, New Technology and Organisational Change - The Knock-on Effects of the Retirement Age
The Knock-on Effects of the Retirement Age on the Employment Rate of Older Workers.
How can we ensure the sustainability of the French retirement system by extending working life when less than one worker in two currently reaches retirement age without having been inactive or unemployed beforehand? We show that the inactivity among older workers under 60 years old can be attributed to insufficient incentives to work beyond the normal retirement age determined by the "full retirement" age. On cross-country data, the level of employment of people aged 55 to 59 seems to be positively correlated with the actual retirement age. Based on individual data, the probability of being employed appears to be linked to how far away a person is from full retirement age. The retirement age marks the end of the active life cycle, which changes the way in which people approaching this age look for work, but also companies' recruitment and layoff strategies. The shorter the distance to retirement, the lower the incentives to remain employed. The retirement system, by modifying the distance to retirement, can potentially affect the employment rate before the full retirement age.