Retirement and Longevity

Mark Borgschulte, University of California, Berkeley

This project investigates the relationship between retirement age and mortality. Building on the cross-country work of the International Social Security Project, detailing the implicit retirement incentives in the social security and retirement insurance programs of OECD countries, I analyze the effect of eligibility age reforms on mortality outcomes. The West German reform of 1973 serves as a case study; I also analyze France's 1972, Sweden's 1976 and Denmark's 1979 reforms. Results indicate a positive relationship between retirement eligibility age and subsequent mortality outcomes, i.e. reducing retirement eligibility age decreases mortality in affected cohorts. Program reforms coincided with changes in mortality, consistent with a 1 to 4% effect on the base level of age-specific mortality for each year change in retirement eligibility age. I present a model of an optimal pension program to demonstrate the role of the semi-elasticity of mortality with respect to retirement age and magnitude of my results.