Économie et Statistique n° 441-442 : Pension systems and their reforms; assessments and projections
Retirement Behaviour and 2003 Reform: The Effects of the Retirement Bonus
The 2003 pension reform introduced a “retirement bonus” (surcote), i.e., increased benefits for persons who work longer than required to claim a full pension. The measure is explicitly designed to encourage workers to delay retirement. However, it cannot produce that effect unless financial considerations play a major role in the work vs. retirement choice. While it seems obvious that the decision includes a financial component, the weight of the latter is still being debated. We study the consequences of the introduction of the bonus on the retirement behaviour of the first birth cohort concerned by the system. We use a sample of persons insured by the National Old-Age Insurance Fund (Caisse Nationale d'Assurance-Vieillesse: CNAV) and a matching method. Our findings suggest a positive effect on retirement age and on the probability of staying in employment beyond age 60 for insured persons born in 1944 eligible for the bonus. We estimate that the measure has delayed the age for claiming pension benefits by two months and has increased by 16% the probability of remaining in employment after 60. By broadening the study to other cohorts, we confirm the positive impact of the bonus on retirement age.