Series: Working Papers. 0913.
Author: Raquel Vegas, Isabel Argimón, Marta Botella y Clara I. González.
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Abstract
In this paper we analyse the role that Social Security wealth and incentives play in the
transition to retirement in Spain. We use the labour records and other relevant information
contained in a newly released database [Muestra Continua de Vidas Laborales (2006)]
to construct incentive measures stemming from the Social Security provisions in relation to
retiring at old age and investigate the role played by such incentives and by other
socio-economic variables on the retirement hazard. We compute the effects of the reform
that took place in 2002, which made the requirements to access a pension stricter in
general. We carry out a dynamic reduced-form analysis of the retirement decision using a
duration model.
Our results show that both the pension wealth and substitution effects have a
significant role on retirement decisions, but that the latter has less relevance since the reform
introduced in 2002.