The unequal impact of raising the retirement age: Employment response and program substitution

Reference period	NRA	Contributions
Before 1.1.1993	60 years old	15 years
From 1.1.1993 to 31.12.1993	60 years old	16 years
From 1.1.1994 to 31.12.1994	61 years old	16 years
From 1.1.1995 to 30.6.1995	61 years old	17 years
From 1.7.1995 to 31.12.1996	62 years old	17 years
From 1.1.1997 to 30.6.1998	63 years old	18 years
From 1.7.1998 to 31.12.1999	64 years old	19 years
From 1.1.2000 to 31.12.2000	65 years old	19 years
From 1.1.2001 to 30.6.2002	65 years old	20 years

[i] Notes: Author’s elaboration based on ISTAT (2011, p. 80). The increase of the required contributions applies only to individuals with <15 years of contributions in December 1992. NRA, normal retirement age.

NRA by birth cohort as established by the 1992 Pension Reform.
*Source*: Author’s elaboration based on Table 1. NRA, normal retirement age.

Table 2

Sample description

	Control cohorts		Treated cohorts
	Mean	St. Dev.	Mean	St. Dev.
Employed (%)	75.7		74.3
Occupation (%)
Manual	75.4		74.7
Non-manual	14.6		16.1
Manager	0.4		0.7
Self-employed	9.6		8.5
Sick-leave/work ratio^a	0.3	0.90	0.3	0.92
Real annual earnings^b	18,072	13,373	18,980	13,732
Panel B: Individuals characteristics at pension receipt
Years of accrued contributions	25.2	7.73	26.9	8.14
Pension type
Seniority (%)	3.9		20.3
Old-age (%)	89.3		76.4
Early retirement (%)	6.8		3.3
		2.01
Pension claiming age	60.1		62.3	2.49
Individuals	16,664		13,310

Notes: Control and treated cohorts refer to individuals born in 1931–1933 and 1934–1936, respectively.

a Weeks of sick leave over weeks worked, measured at 58–59 years old.

b Euro, 2005 prices.

Labor Market Outcomes (%) by age and birth cohorts.
*Notes*: Proportion of persons in each labor market status by age and birth cohort. NRA, normal retirement age.

Effect of raising the NRA on different labor market outcomes at every single age (Ages before, during, and after the NRA rise).
*Notes*: The figure displays the estimated DD coefficient β (Eq. 1) and 95% CI separately for each of the outcomes. 95% CI are computed as a wild bootstrap percentile interval, thus they might be not centered around the point estimate. WB procedure with 999 repetitions. Šidàk correction for 11 multiple hypotheses. Vertical lines indicate the first (60) and last (64) treated age by the reform increasing NRA. Full output is available in Table C1 in Appendix. DD, difference-in-differences; NRA, normal retirement age; WB, wild-cluster bootstrap.

Table 3

Treated and control groups definition by age and year of birth

Age	*Control group (T_a* = 0)**	*Treated group (T_a* = 1)**	Eligibility to NRA
From 55 to 59	1931–1933	(1934–1936)	Placebo ages: no one is eligible
60 years old	1931–1933	1934–1936	Only the control group is eligible
61 years old	1931–Jun 1934	Jul 1934–1936	Only the control group is eligible
62 years old	1931–Dec 1934	1935–1936	Only the control group is eligible
63 years old	1931–Jun 1935	Jul 1935–1936	Only the control group is eligible
64 years old	1931–Dec 1935	1936	Only the control group is eligible
65 years old	1931–1933	(1934–1936)	Placebo age: everyone is eligible

[i] Notes: Author’s elaboration based on Table 1. NRA, normal retirement age.

Table 4

Effect of raising the NRA on different labor market outcomes

	Pension benefit	Employment	Inactivity	Disability benefit	Unemployment benefit
Panel A: Standard DD estimator
Age<NRA	−0.440^***	0.087^***	0.134^***	0.042^***	0.016
WP p-value	0.000	0.000	0.000	0.000	0.045
WB Šidàk p-value	0.000	0.000	0.000	0.000	0.206
Adj. R²	0.87	0.18	0.08	0.04	0.02
Observations	659,428	659,428	659,428	659,428	659,428
Pre-reform mean	0.92	0.12	0.05	0.02	0.01
% change	−51%	+48%	+178%	+111%	n.s.
Panel B: De Chaisemartin and D’Haultfoeuille (2020b) DD estimator
Age<NRA	−0.552^***	0.090^***	0.130^***	0.025^***	0.003
WB SE	0.016	0.008	0.005	0.002	0.005

Notes: The table displays the estimated DD coefficient β (Eq. 2) separately for each of the outcomes (columns). SE clustered at period level. WB procedure with 999 repetitions. Šidàk correction for five multiple hypotheses. % Change computed for coefficients significantly different from 0 with respect to pre-reform means (control cohorts at 60–64 years old). Significance based on WB p-value:

*** 1%,

^**5%,

^*10% (with Šidàk correction in Panel A).

Full output is available in Table C2 in Appendix. DD, difference-in-differences; NRA, normal retirement age; WB, wild-cluster bootstrap.

Table 5

Heterogeneous effect of rising the NRA: subsample analysis

	Pension benefit	Employment	Inactivity	Disability benefit	Unemployment benefit	Obs.
Full sample	−0.440^***	0.087^***	0.134^***	0.042^***	0.016	659,428
Always employed bef. 60	−0.384^***	0.092^***	0.089^***	0.034^***	0.029^*	413,107
Low Wage (1° tertile)	−0.459^***	0.071^***	0.148^***	0.045^***	0.022^**	135,377
High wage (3° tertile)	−0.271^***	0.075^***	0.043^***	0.017^***	0.022^*	135,377
Low occ. Grade (manual)	−0.414^***	0.107^***	0.094^***	0.041^***	0.034^*	299,774
High occ. Grade (execut.)	−0.186	0.057	0.067	na	−0.003	2,377
Low health (1° tertile)	−0.423^***	0.098^*	0.064^***	0.078^***	0.040^*	85,086
Good health (3° tertile)	−0.377^***	0.081^***	0.109^***	0.015^***	0.014^*	255,327

Notes: The table displays the estimated DD coefficient β (Eq. 2) obtained from separate split sample analyses (rows) for each of the outcomes (columns). SE clustered at period level. WB procedure with 999 repetitions. Šidàk correction for five multiple hypotheses.

Significance based on WB Šidàk p-value:

*** 1%,

** 5%,

* 10%.

DD, difference-in-differences; NRA, normal retirement age; WB, wild-cluster bootstrap.

Table 6

Heterogeneous effect of rising the NRA: fully interacted analysis

	Pension benefit	Employment	Inactivity	Disability Benefit	Unemployment benefit
Age<NRA (Ref. category^a)	−0.167^***	0.006	−0.021	0.037^***	0.025^***
Age<NRA × Low wage	−0.092^***	0.004	0.056+	−0.011	0.000
WB p-value	0.000	0.871	0.031	0.081	0.955
WB Šidàk p-value	0.000	1.000	0.451	0.288	1.000
Age<NRA × Mid wage	−0.052^***	0.022^**	0.009	0.000	0.003
WB p-value	0.000	0.005	0.070	0.957	0.546
WB Šidàk p-value	0.000	0.024	0.341	1.000	0.986
Age<NRA × Low occ. grade	−0.18^**	0.089+	0.097^**	−0.006	0.003
WB p-value	0.001	0.025	0.004	0.152	0.524
WB Šidàk p-value	0.012	0.242	0.012	0.545	0.990
Age<NRA × Mid occ. grade	−0.108+	0.008	0.085^*	0.001	0.006
WB p-value	0.011	0.827	0.007	0.629	0.115
WB Šidàk p-value	0.130	1.000	0.064	0.999	0.561
Age<NRA × Low health	−0.025^*	0.024^**	−0.011	0.020+	0.007
WB p-value	0.013	0.003	0.131	0.017	0.240
WB Šidàk p-value	0.081	0.036	0.615	0.256	0.824
Age<NRA × Mid health	0.005	0.008	−0.014	0.005	−0.004
WB p-value	0.645	0.359	0.120	0.056	0.564
WB Šidàk p-value	0.998	0.921	0.647	0.390	0.991
Adj. R²	0.689	0.62	0.15	0.055	0.069
Observations	371,622	371,622	371,622	371,622	371,622

Notes: The table displays the estimated DD coefficient β of Equation (2) interacted simultaneously with different socio-economic group indicators separately for each of the outcomes (columns).

a Ref. category composed of the three excluded categories: workers with high wage, high occupational grade (executives) and good health. SE clustered at period level. WB procedure with 999 repetitions. Šidàk correction for six multiple hypotheses.

Significance based on WB Šidàk p-value:

*** 1%,

** 5%,

* 10%.

In addition, coefficients with WB p-value <5% are marked with +. Full output is available in Table B3 in Appendix. DD, difference-in-differences; NRA, normal retirement age; WB, wild-cluster bootstrap.

Table 7

Effect of rising ERA/NRA on different labor market outcomes: comparison of previousstudies

	Retirement benefit	Employment	Disability benefit	Unempl. benefit	Inactivity
IT (m, NRA 60–65) (My results, Table 4)	−0.44^***	0.087^***	0.042^***	0.016	0.134^***
AUT (f, NRA 60–64.5) Oguzoglu et al., 2020 (Table 2)	−0.519^***	na	0.143^***	0.039^***	na
AUS (m, ERA 60–62) Staubli and Zweimuller, 2013 (Table 3)	−0.248^***	0.097^***	0.010^***	0.125^***	0.016^***
GER (f, ERA, 60–62) Geyer and Welteke, 2021 (Table 1)	−0.276^***	0.135^***	−0.007	0.052^***	0.062^***
FRA (all, ERA 60–61) Rabaté and Rochut, 2020 (Table 5)	−0.478^***	0.209^***	0.059^***	0.134^***	0.062^***
UK (f, ERA 60–62) Cribb et al., 2016 (Tables 4 and 5)	−0.115^***	0.063^**	0.040^***	0.012^***	0.008

[i] Source: Author’s elaboration.

[ii] ERA, early retirement age; NRA, normal retirement age.

Table B1

Calendar years and ages for the treated and untreated cohorts

[i] Note: Each column lists the age of a given cohort in a particular semester. Each cell identifies the treatment and control groups in a particular age and period. Cells identify treatment if Age < NRA (grey color) and control if Age >= NRA (white). The composition of treated and control groups evolves with the gradual increase of NRA as shown in Table 3. For example, individuals born in the first half of 1934 (i.e., 1934-I) are “treated” only in their 60th year of age and contribute to the estimation of the effect of a rise of NRA from 60 to 61 as part of the treated group, but in the following step-wise increases (from 61 to 65) they will act as a control, as long as they had already reached NRA in 1995-I. The average DD treatment effect is identified only for the ages 60–64 (area included in the red rhombus) for which there is within and between cohort variation.

[ii] DD, difference-in-differences; NRA, normal retirement age.

Table C1

Effect of rising the NRA on different labor market outcomes at every single age (before, during, and after the NRA rise) Eq. (1)

	Pension benefit	Employment	Inactivity	Disability benefit	Unemployment benefit
Interaction of Treated group (T) and Age dummies (Ref. Category: T X Age55)
T × Age56 WB Šidàk p	0.01 (0.5612)	−0.004 (1.000)	−0.032 (0.183)	−0.012 (0.000)	−0.002 (0.999)
T × Age57 WB Šidàk p	0.016 (0.2853)	−0.008 (0.982)	−0.033 (0.479)	−0.013 (0.03)	−0.005 (1.000)
T × Age58 WB Šidàk p	0.019 (0.5753)	−0.008 (1.000)	−0.029 (0.943)	−0.013 (0.039)	0.007 (0.628)
T × Age59 WB Šidàk p	0.022 (0.4141)	−0.008 (0.999)	−0.034 (0.854)	−0.009 (0.432)	0.008 (0.462)
T × Age60 WB Šidàk p	−0.546^*** (0.000)	0.076^** (0.01)	0.073 (0.712)	0.011 (0.571)	0.015 (0.948)
T × Age61 WB Šidàk p	−0.568^** (0.01)	0.16^** (0.01)	0.221^** (0.03)	0.045^*** (0.000)	0.03^*** (0.000)
T × Age62 WB Šidàk p	−0.546^*** (0.000)	0.136^*** (0.000)	0.236^** (0.01)	0.061^*** (0.000)	0.029^** (0.01)
T × Age63 WB Šidàk p	−0.517^** (0.01)	0.112^** (0.02)	0.235^** (0.02)	0.071^** (0.02)	0.023^** (0.039)
T × Age64 WB Šidàk p	−0.503^*** (0.000)	0.092^*** (0.000)	0.22^* (0.059)	0.061 (0.27)	0.019 (0.278)
T × Age65	0.014 (0.9999)	−0.007 (1.000)	−0.014 (1.000)	−0.007 (0.999)	−0.005 (0.964)
Year-semester of birth dummies (Ref. Category: 1931 - I sem)
1931 - II sem	−0.019^**	0.040^***	0.022	0.007^***	0.005^**
1932 - I sem	−0.048^***	0.070^***	0.070^***	0.014^***	0.015^***
1932 - II sem	−0.070^***	0.099^***	0.101^***	0.010^**	0.022^***
1933 - I sem	−0.123^***	0.137^***	0.144^***	0.023^***	0.028^***
1933 - II sem	−0.136^***	0.167^***	0.171^***	0.025^***	0.035^***
1934 - I sem	−0.193^***	0.228^***	0.245^***	0.050^***	0.054^***
1934 - II sem	−0.220^***	0.275^***	0.277^***	0.051^***	0.066^***
1935 - I sem	−0.257^***	0.308^***	0.319^***	0.067^***	0.072^***
1935 - II sem	−0.268^***	0.338^***	0.353^***	0.062^***	0.075^***
1936 - I sem	−0.278^***	0.358^***	0.388^***	0.066^***	0.080^***
1936 - II sem	−0.287^***	0.383^***	0.420^***	0.059^***	0.092^***
Year-semester dummies (Ref. Category: 1986 - I sem)
1986 - II sem	0.021^***	−0.029^***	−0.025^***	0.003^**	0
1987 - I sem	0.057^***	−0.101^***	−0.060^***	−0.002	0
1987 - II sem	0.075^***	−0.119^***	−0.098^***	−0.002	−0.005
1988 - I sem	0.112^***	−0.168^***	−0.138^***	−0.004	−0.017^***
1988 - II sem	0.134^***	−0.191^***	−0.183^***	−0.005	−0.022^***
1989 - I sem	0.172^***	−0.246^***	−0.224^***	−0.009	0.023^***
1989 - II sem	0.192^***	−0.269^***	−0.268^***	−0.012	0.018^**
1990 - I sem	0.216^***	−0.306^***	−0.302^***	−0.014	0.038^***
1990 - II sem	0.236^***	−0.332^***	−0.342^***	−0.017	0.034^***
1991 - I sem	0.254^***	−0.365^***	−0.354^***	−0.018	0.046^***
1991 - II sem	0.277^***	−0.397^***	−0.410^***	−0.022	0.045^***
1992 - I sem	0.303^***	−0.443^***	−0.436^***	−0.023	0.029^**
1992 - II sem	0.327^***	−0.476^***	−0.474^***	−0.028	0.034^**
1993 - I sem	0.340^***	−0.537^***	−0.495^***	−0.03	0.025
1993 - II sem	0.353^***	−0.573^***	−0.531^***	−0.034	0.033
1994 - I sem	0.385^***	−0.637^***	−0.576^***	−0.039	0.01
1994 - II sem	0.403^***	−0.660^***	−0.593^***	−0.041	0.011
1995 - I sem	0.421^***	−0.690^***	−0.602^***	−0.041	0
1995 - II sem	0.439^***	−0.723^***	−0.658^***	−0.045	−0.006
1996 - I sem	0.461^***	−0.762^***	−0.685^***	−0.049	−0.013
1996 - II sem	0.480^***	−0.780^***	−0.693^***	−0.047	−0.017
1997 - I sem	0.514^***	−0.834^***	−0.750^***	−0.053	−0.035
1997 - II sem	0.535^***	−0.861^***	−0.781^***	−0.056	−0.039
1998 - I sem	0.551^***	−0.893^***	−0.777^***	−0.05	−0.048
1998 - II sem	0.581^***	−0.933^***	−0.848^***	−0.058	−0.054
1999 - I sem	0.608^***	−0.973^***	−0.873^***	−0.06	−0.066^**
1999 - II sem	0.616^***	−0.990^***	−0.877^***	−0.049	−0.070^**
2000 - I sem	0.652^***	−1.025^***	−0.947^***	−0.05	−0.083^**
2000 - II sem	0.677^***	−1.050^***	−0.974^***	−0.042	−0.088^**
2001 - I sem	0.679^***	−1.063^***	−0.908^***	−0.008	−0.089^**
2001 - II sem	0.672^***	−1.075^***	−0.933^***	0.01	−0.087^**
2002 - I sem	0.742^***	−1.142^***	−1.109^***	−0.017	−0.112^***
Age dummies (Reference Category: 55 years old)
56	−0.038^***	0.045^***	0.080^***	0.020^***	0.013^***
57	−0.079^***	0.091^***	0.156^***	0.037^***	0.025^***
58	−0.117^***	0.132^***	0.234^***	0.053^***	0.030^***
59	−0.142^***	0.162^***	0.312^***	0.064^***	0.034^***
60	0.483^***	0.07	0.276^***	0.059^***	0.006
61	0.536^***	−0.024	0.180^**	0.037	−0.030^**
62	0.529^***	0.002	0.222^**	0.033	−0.027
63	0.506^***	0.043	0.274^**	0.033	−0.016
64	0.476^***	0.086	0.325^***	0.032	−0.003
65	0.503^***	0.122	0.366^***	0.038	0.011
_cons	0.024^***	0.709^***	0.331^***	0.026^***	0.010^***
Adj. R²	0.65	0.22	0.1	0.02	0.05
Observations	659,428	659,428	659,428	659,428	659,428

Notes: The table displays the regression output of Eq. (1) separately for each of the outcomes (columns). SE clustered at period level (33 groups) (sem=half year). Significance levels:

*** 1%,

** 5%,

* 10%, based on: (a) WB procedure with 999 repetitions and Šidàk correction for five multiple hypotheses for the interactions terms TxAge, and (b) SE clustered for the remaining coefficients.

NRA, normal retirement age; WB, wild-cluster bootstrap.

Table C2

The average effect of raising the NRA on different labor market outcomes Eq. (2)

	Pension benefit	Employment	Inactivity	Disability Benefit	Unemployment benefit
Age<NRA	−0.440^***	0.087^***	0.134^***	0.042^***	0.016^***
WB Šidàk p	(0.000)	(0.000)	(0.000)	(0.000)	(0.206)
Year-semester of birth dummies (Ref. Category: 1931 - I sem)
1931 - II sem	−0.035^***	0.043^***	0.027^***	0.009^***	0.006^***
1932 - I sem	−0.079^***	0.075^***	0.080^***	0.017^***	0.016^***
1932 - II sem	−0.115^***	0.107^***	0.116^***	0.015^***	0.023^***
1933 - I sem	−0.187^***	0.149^***	0.165^***	0.029^***	0.030^***
1933 - II sem	−0.194^***	0.177^***	0.189^***	0.031^***	0.037^***
1934 - I sem	−0.269^***	0.238^***	0.250^***	0.049^***	0.057^***
1934 - II sem	−0.327^***	0.296^***	0.295^***	0.052^***	0.071^***
1935 - I sem	−0.390^***	0.336^***	0.351^***	0.071^***	0.078^***
1935 - II sem	−0.425^***	0.372^***	0.398^***	0.070^***	0.084^***
1936 - I sem	−0.478^***	0.401^***	0.453^***	0.080^***	0.090^***
1936 - II sem	−0.505^***	0.428^***	0.490^***	0.075^***	0.103^***
Year-semester dummies (Ref. Category: 1986 - I sem)
1986 - II sem	0.029^***	−0.030^***	−0.028^**	0.002	−0.001
1987 - I sem	0.083^***	−0.106^***	−0.066^***	−0.003	−0.001
1987 - II sem	0.113^***	−0.126^***	−0.106^***	−0.004	−0.006^**
1988 - I sem	0.170^***	−0.179^***	−0.153^***	−0.007	−0.019^***
1988 - II sem	0.202^***	−0.204^***	−0.201^***	−0.009	−0.025^***
1989 - I sem	0.257^***	−0.262^***	−0.246^***	−0.014	0.019^***
1989 - II sem	0.291^***	−0.288^***	−0.294^***	−0.017^**	0.013^***
1990 - I sem	0.338^***	−0.331^***	−0.343^***	−0.024^**	0.032^***
1990 - II sem	0.374^***	−0.360^***	−0.388^***	−0.029^***	0.027^***
1991 - I sem	0.421^***	−0.399^***	−0.411^***	−0.033^**	0.037^***
1991 - II sem	0.463^***	−0.435^***	−0.472^***	−0.037^***	0.036^***
1992 - I sem	0.513^***	−0.488^***	−0.513^***	−0.042^***	0.021^**
1992 - II sem	0.555^***	−0.526^***	−0.561^***	−0.050^***	0.024^**
1993 - I sem	0.589^***	−0.593^***	−0.593^***	−0.055^***	0.016
1993 - II sem	0.619^***	−0.633^***	−0.638^***	−0.062^***	0.023^***
1994 - I sem	0.691^***	−0.708^***	−0.703^***	−0.074^***	−0.002
1994 - II sem	0.678^***	−0.727^***	−0.720^***	−0.077^***	0.001
1995 - I sem	0.709^***	−0.758^***	−0.730^***	−0.077^***	−0.012
1995 - II sem	0.772^***	−0.796^***	−0.797^***	−0.086^***	−0.019
1996 - I sem	0.756^***	−0.822^***	−0.801^***	−0.085^***	−0.024^**
1996 - II sem	0.789^***	−0.842^***	−0.812^***	−0.084^***	−0.028^**
1997 - I sem	0.870^***	−0.901^***	−0.872^***	−0.092^***	−0.047^***
1997 - II sem	0.864^***	−0.919^***	−0.885^***	−0.090^***	−0.049^***
1998 - I sem	0.904^***	−0.957^***	−0.888^***	−0.085^***	−0.059^***
1998 - II sem	1.007^***	−1.013^***	−0.974^***	−0.096^***	−0.067^***
1999 - I sem	0.992^***	−1.046^***	−0.979^***	−0.092^***	−0.080^***
1999 - II sem	1.028^***	−1.071^***	−0.994^***	−0.082^***	−0.086^***
2000 - I sem	1.171^***	−1.131^***	−1.093^***	−0.093^***	−0.104^***
2000 - II sem	1.130^***	−1.146^***	−1.095^***	−0.079^**	−0.107^***
2001 - I sem	1.166^***	−1.166^***	−1.051^***	−0.051	−0.110^***
2001 - II sem	1.212^***	−1.188^***	−1.113^***	−0.043	−0.112^***
2002 - I sem	1.277^***	−1.249^***	−1.278^***	−0.064^**	−0.132^***
Age dummies (Reference Category: 55 years old)
56	−0.069^***	0.051^***	0.082^***	0.019^***	0.014^***
57	−0.146^***	0.105^***	0.174^***	0.040^***	0.028^***
58	−0.220^***	0.154^***	0.271^***	0.062^***	0.038^***
59	−0.282^***	0.194^***	0.369^***	0.080^***	0.043^***
60	−0.165^**	0.189^***	0.459^***	0.110^***	0.027^***
61	−0.134	0.130^***	0.430^***	0.106^***	−0.003
62	−0.158	0.150^***	0.476^***	0.109^***	−0.001
63	−0.189^**	0.184^***	0.521^***	0.110^***	0.009
64	−0.244^**	0.227^***	0.563^***	0.106^***	0.022
65	−0.254^**	0.270^***	0.599^***	0.111^***	0.037^**
_cons	0.464^***	0.622^***	0.197^***	−0.015^***	−0.005
Adj. R²	0.64	0.22	0.1	0.02	0.05
Observations	659,428	659,428	659,428	659,428	659,428

Notes: The table displays the regression output of Eq. (2) separately for each of the outcomes (columns). SE clustered at period level (33 groups) (sem=half year). Significance levels:

*** 1%,

** 5%,

* 10%, based on: (a) WB procedure with 999 repetitions and Šidàk correction for five multiple hypotheses for the indicator terms Age<NRA, and (b) SE clustered for the remaining coefficients.

NRA, normal retirement age; WB, wild-cluster bootstrap.

Table C3

Heterogeneous effect of rising the NRA: fully interacted analysis (based on Eq. (2))

	Pension benefit	Employment	Inactivity	Disability benefit	Unemployment benefit
Age<NRA (Ref. Category^a)	−0.167^***	0.006	−0.021	0.037^***	0.025^***
Age<NRA × Low wage	−0.092^***	0.004	0.056	−0.011	0
WP p	0.000	0.871	0.031	0.081	0.955
WP p Šidàk correction	0.000	1.000	0.451	0.288	1.000
Age<NRA × Mid wage	−0.052^***	0.022^**	0.009	0	0.003
WP p	0.000	0.005	0.070	0.957	0.546
WP p Šidàk correction	0.000	0.024	0.341	1.000	0.986
Age<NRA × Low occ. Grade	−0.180^**	0.089+	0.097^**	−0.006	0.003
WP p	0.001	0.025	0.004	0.152	0.524
WP p Šidàk correction	0.012	0.242	0.012	0.545	0.990
Age<NRA × Mid occ. Grade	−0.108	0.008	0.085^*	0.001	0.006
WP p	0.011	0.827	0.007	0.629	0.115
WP p Šidàk correction	0.130	1.000	0.064	0.999	0.561
Age<NRA × Low health	−0.025^*	0.024^**	−0.011	0.020+	0.007
WP p	0.013	0.003	0.131	0.017	0.240
WP p Šidàk correction	0.081	0.036	0.615	0.256	0.824
Age<NRA × Mid health	0.005	0.008	−0.014	0.005	−0.004
WP p	0.645	0.359	0.120	0.056	0.564
WP p Šidàk correction	0.998	0.921	0.647	0.390	0.991
Year-semester of birth dummies (Ref. Category: 1931 - I sem)
1931 - II sem	−0.037^***	0.049^***	0.033^***	0.008^***	0.010^***
1932 - I sem	−0.075^***	0.099^***	0.068^***	0.011^***	0.024^***
1932 - II sem	−0.124^***	0.141^***	0.105^***	0.018^***	0.033^***
1933 - I sem	−0.198^***	0.199^***	0.141^***	0.026^***	0.046^***
1933 - II sem	−0.200^***	0.225^***	0.162^***	0.029^***	0.051^***
1934 - I sem	−0.292^***	0.324^***	0.216^***	0.044^***	0.075^***
1934 - II sem	−0.350^***	0.376^***	0.263^***	0.053^***	0.085^***
1935 - I sem	−0.421^***	0.456^***	0.305^***	0.065^***	0.103^***
1935 - II sem	−0.456^***	0.500^***	0.351^***	0.073^***	0.111^***
1936 - I sem	−0.515^***	0.561^***	0.389^***	0.081^***	0.122^***
1936 - II sem	−0.534^***	0.591^***	0.425^***	0.076^***	0.134^***
Year-semester dummies (Ref. Category: 1986 - I sem)
1986 - II sem	0.017	−0.024	−0.014	−0.003	−0.005
1987 - I sem	0.069^***	−0.087^***	−0.055^***	−0.012^***	−0.020^***
1987 - II sem	0.105^***	−0.126^***	−0.083^***	−0.017^***	−0.030^***
1988 - I sem	0.164^***	−0.186^***	−0.124^***	−0.027^***	−0.044^***
1988 - II sem	0.200^***	−0.226^***	−0.152^***	−0.033^***	−0.053^***
1989 - I sem	0.257^***	−0.291^***	−0.194^***	−0.042^***	−0.068^***
1989 - II sem	0.301^***	−0.339^***	−0.227^***	−0.050^***	−0.079^***
1990 - I sem	0.359^***	−0.405^***	−0.271^***	−0.059^***	−0.093^***
1990 - II sem	0.403^***	−0.454^***	−0.306^***	−0.067^***	−0.104^***
1991 - I sem	0.464^***	−0.491^***	−0.332^***	−0.074^***	−0.118^***
1991 - II sem	0.521^***	−0.559^***	−0.386^***	−0.082^***	−0.124^***
1992 - I sem	0.578^***	−0.632^***	−0.427^***	−0.090^***	−0.151^***
1992 - II sem	0.626^***	−0.680^***	−0.472^***	−0.099^***	−0.148^***
1993 - I sem	0.660^***	−0.751^***	−0.501^***	−0.108^***	−0.171^***
1993 - II sem	0.689^***	−0.802^***	−0.541^***	−0.116^***	−0.167^***
1994 - I sem	0.757^***	−0.887^***	−0.597^***	−0.128^***	−0.199^***
1994 - II sem	0.737^***	−0.904^***	−0.611^***	−0.131^***	−0.195^***
1995 - I sem	0.772^***	−0.938^***	−0.622^***	−0.133^***	−0.208^***
1995 - II sem	0.835^***	−0.993^***	−0.676^***	−0.143^***	−0.221^***
1996 - I sem	0.825^***	−1.025^***	−0.685^***	−0.146^***	−0.228^***
1996 - II sem	0.866^***	−1.053^***	−0.698^***	−0.146^***	−0.231^***
1997 - I sem	0.947^***	−1.129^***	−0.749^***	−0.154^***	−0.259^***
1997 - II sem	0.948^***	−1.153^***	−0.765^***	−0.155^***	−0.261^***
1998 - I sem	0.993^***	−1.201^***	−0.770^***	−0.152^***	−0.275^***
1998 - II sem	1.092^***	−1.274^***	−0.838^***	−0.163^***	−0.288^***
1999 - I sem	1.089^***	−1.319^***	−0.846^***	−0.162^***	−0.303^***
1999 - II sem	1.129^***	−1.357^***	−0.865^***	−0.155^***	−0.310^***
2000 - I sem	1.268^***	−1.439^***	−0.941^***	−0.169^***	−0.336^***
2000 - II sem	1.246^***	−1.470^***	−0.949^***	−0.161^***	−0.341^***
2001 - I sem	1.285^***	−1.498^***	−0.921^***	−0.136^***	−0.344^***
2001 - II sem	1.326^***	−1.545^***	−0.969^***	−0.136^***	−0.344^***
2002 - I sem	1.386^***	−1.627^***	−1.099^***	−0.149^***	−0.369^***
Age dummies (Reference Category: 55 years old)
56	−0.099^***	0.106^***	0.074^***	0.016^***	0.024^***
57	−0.198^***	0.216^***	0.151^***	0.033^***	0.049^***
58	−0.293^***	0.329^***	0.228^***	0.050^***	0.074^***
59	−0.381^***	0.437^***	0.303^***	0.066^***	0.097^***
60	−0.152	0.123^***	0.595^***	0.160^***	0.250^***
61	−0.111	0.021	0.595^***	0.163^***	0.212^***
62	−0.125	0.035	0.641^***	0.170^***	0.216^***
63	−0.158	0.074^**	0.684^***	0.175^***	0.229^***
64	−0.219	0.131^***	0.725^***	0.176^***	0.247^***
65	−0.255	0.192^***	0.764^***	0.185^***	0.268^***
_cons	0.126^**	1.033^***	0.04	−0.068^***	−0.051^***
Adj. R²	0.69	0.62	0.15	0.05	0.07
Observations	371,622	371,622	371,622	371,622	371,622

Notes: The table displays the estimated DD coefficient β of Eq. (2) interacted simultaneously with different socio-economic group indicators separately for each of the outcomes (columns).

a Ref. category composed of the three excluded categories: workers with high wage, high occupational grade (executives), and good health. SE clustered at period level with WB procedure with 999 repetitions. Šidàk correction for six multiple hypotheses.

Significance levels:

*** 1%,

** 5%,

* 10%, based on: (a) WB procedure with 999 repetitions and Šidàk correction for six multiple hypotheses for the term Age<NRA interacted with socio-economic group indicators, and (b) SE clustered for the remaining coefficients.

DD, difference-in-differences; NRA, normal retirement age; WB, wild-cluster bootstrap.

Table D1

Effect of raising the NRA: Eq. 2 controlling also for Individual Fixed Effects

	Pension benefit	Employment	Inactivity	Disability benefit	Unemployment benefit
Age<NRA	−0.440^***	0.087^***	0.134^***	0.042^***	0.016
WB p	0.000	0.000	0.000	0.000	0.045
WB Šidàk p	0.000	0.000	0.000	0.000	0.206
Adj. R²	0.77	0.61	0.54	0.63	0.35
Observations	659,428	659,428	659,428	659,428	659,428

Notes: The table displays the estimated DD coefficient β of Eq. (2) separately for each of the outcomes (columns). Controls include all those specified in Eq. (2) plus individuals fixed effects. SE clustered at period level. WB procedure with 999 repetitions. Significance legend based on WB p-value corrected for five multiple hypotheses:

*** 1%,

** 5%,

* 10%.

DD, difference-in-differences; NRA, normal retirement age; WB, wild-cluster bootstrap.

Table D2

Effect of raising the NRA: Eq. 2 excluding from controls time fixed effects

	Pension benefit	Employment	Inactivity	Disability benefit	Unemployment benefit
Age<NRA	−0.454^***	0.090^**	0.161^**	0.043^***	−0.019^*
WB p	0.000	0.007	0.002	0.000	0.016
WB Šidàk p	0.000	0.035	0.010	0.000	0.070
Adj. R²	0.77	0.61	0.54	0.63	0.35
Observations	659,428	659,428	659,428	659,428	659,428

Notes: The table displays the estimated DD coefficient β of Eq. (2) separately for each of the outcomes (columns). Controls include all those specified in Eq. (2) except for time-fixed effects. SE clustered at period level. WB procedure with 999 repetitions. Significance legend based on WB p-value corrected for five multiple hypotheses:

*** 1%,

** 5%,

* 10%.

DD, difference-in-differences; NRA, normal retirement age; WB, wild-cluster bootstrap.

Table D3

Effect of raising the NRA: Eq. 2 excluding years 1992–1993

	Pension benefit	Employment	Inactivity	Disability benefit	Unemployment benefit
Age<NRA	−0.417^***	0.078^***	0.127^***	0.043^***	0.015
WB p	0.000	0.004	0.004	0.000	0.047
WB Šidàk p	0.000	0.020	0.020	0.000	0.214
Adj. R²	0.64	0.24 0.1		0.02	0.05
Observations	539,532	539,532	539,532	539,532	539,532

Notes: The table displays the estimated DD coefficient β of Eq. (2) separately for each of the outcomes (columns). Controls include all those specified in Eq. (2). Years 1992–1993 excluded from the analysis. SE clustered at period level. WB procedure with 999 repetitions. Significance legend based on WB p-value corrected for five multiple hypotheses:

*** 1%,

** 5%,

* 10%.

DD, difference-in-differences; NRA, normal retirement age; WB, wild-cluster bootstrap.

Table D4

Effect of raising the NRA: Eq. 2 excluding individuals with < 15 years of contributions in 1992

	Pension benefit	Employment	Inactivity	Disability benefit	Unemployment benefit
Age<NRA	−0.440^***	0.087^***	0.133^***	0.042^***	0.016^**
WB p	0.000	0.000	0.000	0.000	0.001
WB Šidàk p	0.000	0.000	0.000	0.000	0.005
Adj. R²	0.64	0.22	0.1	0.02	0.05
Observations	657,756	657,756	657,756	657,756	657,756

Notes: The table displays the estimated DD coefficient β of Eq. (2) separately for each of the outcomes (columns). SE clustered at period level. WB procedure with 999 repetitions. Significance based on WB p-value corrected for five multiple hypotheses:

*** 1%,

** 5%,

* 10%.

DD, difference-in-differences; NRA, normal retirement age; WB, wild-cluster bootstrap.

Table D5

Change in the pension base (average of last N years of wages before pension claiming)

N Years	Avg. Annual Wage over N years	% change from N to N+1
5	24,905.47
6	24,832.08	−0.3%
7	24,752.02	−0.3%
8	24,696.57	−0.2%
9	24,663.13	−0.1%
10	24,631.77	−0.1%

[i] Note: Author’s calculation on the final sample of analysis using WHIP data.

[ii] WHIP, Working Histories Italian Panel.

Table D6

Effect of raising the NRA on Old-age pension and Early pension types (Eq. 2)

	Old age pension benefits	Early pension benefits
Age<NRA	−0.549^***	−0.025
WB p	0.000	0.379
WB Šidàk p	0.000	0.907
Adj. R²	0.75	0.51
Observations	551,034	108,394

Notes: The table displays the estimated DD coefficient β of Eq. (2) separately for the outcomes “Old-age Pension” and “Early Pension” which includes both seniority pension and other early pension options. Controls include all those specified in Eq. (2). SE clustered at period level. WB procedure with 999 repetitions. Significance legend based on WB p-value corrected for two multiple hypotheses:

*** 1%,

** 5%,

* 10%.

DD, difference-in-differences; NRA, normal retirement age; WB, wild-cluster bootstrap.

Table D7

Heterogeneous Effect of rising the NRA: fully interacted analysis using characteristics measure at 55 years vs 55–59 years

	Panel A: Characteristics measured at 55 years					Panel B: Characteristics measured at 55 – 59 years
	Pension Benefit	Employment	Inactivity	Disability benefit	Unemployment benefit	Pension benefit	Employment	Inactivity	Disability benefit	Unemployment benefit
Age<NRA (Ref. cat.^a)	−0.166^**	0.011	−0.025	0.036^***	0.019	−0.170^*	0.015	−0.024	0.038^***	0.025^***
WP p	0.001	0.713	0.419	0.000	0.071	0.012	0.693	0.441	0.000	0.000
WP p Šidàk correction	0.020	0.998	0.943	0.000	0.373	0.059	0.997	0.946	0	0.000
Age<NRA × Low wage	−0.121^***	0.021	0.051+	−0.004	−0.007^***	−0.090^***	0.000	0.057+	−0.012+	0.002
WP p	0.001	0.126	0.031	0.420	0.002	0.000	0.995	0.050	0.033	0.331
WP p Šidàk correction	0.000	0.590	0.274	0.932	0.005	0.000	1.000	0.226	0.155	0.866
Age<NRA × Mid wage	−0.068^***	0.027^*	0.012	0.004	−0.001	−0.052^***	0.022^**	0.009+	0.000	0.003
WP p	0.000	0.012	0.070	0.241	0.887	0.000	0.006	0.047	0.880	0.600
WP p Šidàk correction	0.000	0.059	0.327	0.753	1.000	0.000	0.030	0.214	1	0.990
Age<NRA × Low occ. grade	−0.162^**	0.085+	0.091^*	0.001	0.017+	−0.179^**	0.092+	0.090^*	0.003	0.005
WP p	0.001	0.023	0.011	0.452	0.049	0.006	0.035	0.016	0.062	0.453
WP p Šidàk correction	0.039	0.110	0.078	0.919	0.278	0.030	0.163	0.078	0.274	0.9508
Age<NRA × Mid occ. grade	−0.099^*	0.000	0.086^*	0.004	0.015	−0.104+	0.003	0.085^*	0.002	0.007
WP p	0.007	0.988	0.012	0.108	0.102	0.029	0.950	0.011	0.362	0.145
WP p Šidàk correction	0.054	1.000	0.068	0.436	0.278	0.137	1	0.054	0.895	0.5435
R²-adjusted	0.70	0.62	0.13	0.05	0.07	0.69	0.62	0.14	0.05	0.07
Nobservations	352,576	352,576	352,576	352,576	352,576	352,576	352,576	352,576	352,576	352,576

Notes: The table displays the estimated DD coefficient β of Eq. (2) interacted simultaneously with different socio-economic group indicators separately for each of the outcomes (columns).

a Ref. category composed of the two excluded categories: workers with high wage and high occupational grade (executives). SE clustered at period level with WB procedure with 999 repetitions. Šidàk correction for five multiple hypotheses. Significance level based on WB p-value with Šidàk correction:

*** 1%,

** 5.

DD, difference-in-differences; NRA, normal retirement age; WB, wild-cluster bootstrap.

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DOI: https://doi.org/10.2478/izajole-2021-0003 | Journal eISSN: 2193-8997

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Language: English

Accepted on: Aug 9, 2021

Published on: Sep 21, 2021