Research
PUBLICATIONS AND PAPERS UNDER REVIEW
[1] The Effect of Pension Subsidies on the Retirement Timing of Older Women, Journal of the European Economic Association, Issue 20-3, June 2022
Featured in: Latest Thinking, DAAD:Researcher in Germany
Abstract: I estimate the effect of additional pension benefits on women's retirement decisions by examining a German pension subsidy program for low-pay workers. The subsidies have a kinked relationship with the recipients' past contributions, creating a sharply different slope of benefits for similar women on either side of the kink point. I find that a 100 euro increase in the monthly benefit induces female recipients to claim their pensions six months earlier. Recipients also adjust labor supply by using unemployment insurance (UI) as a stepping stone to retirement and by reducing time spent in marginal employment. A back-of-the-envelope calculation suggests that the ratio of behavioral to mechanical costs for this subsidy program is 0.25, which is smaller than that of other income support programs.
[2] The Effect of Increasing Retirement Age on Households' Savings and Consumption Expenditure, joint with Stefan Etgeton and Björn Fischer , Journal of Public Economics, Volume 221, May 2023
Featured in: ZEW press release
Abstract: This paper examines how households adjust their savings and consumption expenditure in response to an anticipated increase in the early retirement age (ERA). We examine the 1999 pension reform in Germany, which increased the ERA for women born after 1951 by at least three years. First, we present suggestive evidence that women update their retirement planning in response to the reform. Using the German Income and Consumption Survey, we find a negative impact on private savings of 0.6 percentage points that is driven by households with married women. We show that households consisting of highly educated women and homeowners are more likely to reduce their savings rates. Furthermore, we find that the treated households increase their leisure spending while maintaining an unchanged level of disposable income. Our findings suggest that the households anticipate experiencing a lifetime income increase and reduce their savings rate to smooth consumption.
[3] When Institutions Interact: How the Effects of Unemployment Insurance are Shaped by Retirement Policies joint with Matthew Gudgeon, Pablo Guzman, Johannes F. Schmieder, Simon Trenkle [Revised and Resubmit at American Economic Journal: Economic Policy ]
Featured in: NBER Featured Working Paper (Nov 8 2023), CRCTR224 Newsroom
Abstract: This paper shows empirically that the non-employment effects of unemployment insurance (UI) for older workers depend in a first-order way on the structure of retirement policies. Using German data, we first present reduced-form evidence of these interactions, documenting large bunching in UI inflows at the age that allows workers to claim their pension following UI expiration. We then estimate a dynamic life-cycle model and use it to directly quantify how the effects of UI vary with retirement policies. Accounting for interactions across UI and retirement institutions also helps explain otherwise difficult-to-explain trends in the unemployment rate of older German workers.
[4] Spillover Effects of Old-Age Pension Across Generations: Family Labor Supply and Child Outcomes joint with Katja M. Kaufmann and Yasemin Özdemir [Revised and Resubmit at Journal of Labor Economics]
Abstract: We study the impact of grandparental retirement decisions on family members’ labor supply and child outcomes by exploiting a Dutch pension reform and a fuzzy Regression Discontinuity design. We find that a one-hour increase in grandmothers’ hours worked causes their adult daughters with young children to work 40 minutes less. Daughters without children, with older children and sons/daughters-in-law are not affected. Examining the reform impacts on grandchildren’s test scores, we find positive effects on children aged 4-7, who experienced a substitution from grandparental to maternal care. We also show negative effects for children aged 8-12, for whom grandparental childcare was substituted for by formal or no care.
[5] The Effect of Removing Early Retirement on Mortality joint with Cristina Bellés-Obrero and Sergi Jiménez-Martín [Under review]
Media coverage: El Mundo, Europapress, El Confidencial, La Razón, El Economista, El Diario, El Periodico, SWR Wissen, Zeit Online, Der Standard
Abstract: This paper sheds new light on the mortality effect of delaying retirement by investigating the impacts of the 1967 Spanish pension reform. This reform exogenously changed the early retirement age, depending on the date individuals started contributing to the Social Security system. Those contributing before 1 January 1967 maintained the right to voluntarily retire early (at age 60), while individuals who started contributing after that date could not voluntarily claim a pension until the age of 65. Using the Spanish administrative Social Security data, we find that the reform delayed the individuals’ labour market exit by around half a year and increased the probability that individuals take up disability pensions, partial pensions, and no pensions. We show evidence that delaying exiting employment increases the hazard of dying between the ages of 60 and 69, for almost all individuals. Heterogeneous analysis indicates that the increase in mortality is stronger for those employed in low-skilled, physically and psychosocially demanding jobs. Moreover, we show that allowing for flexible retirement schemes, such as partial retirement, mitigates the detrimental effect of delaying retirement on mortality.
[6] Live Longer and Healthier: Impact of Pension Income for Low-Income Retirees joint with Chiara Malavasi [Under review]
Abstract: We estimate the effect of additional pension benefits on mortality outcomes by exploring the two eligibility criteria of a German pension subsidy program for low-wage workers. Using novel administrative data, we find that eligibility leads to a 2-month delay in age at death (censored at 75). Survey evidence suggests that additional pension income improves both mental and physical health. In addition, individuals feel less financially constrained and are more optimistic about their future. Heterogeneity analysis suggests that the results are mainly driven by men.
[7] Job Amenities and the Gender Pension Gap joint with Iris Kesternich and Marjolein Van Damme [Under review]
Abstract: One reason gender pay gaps persist is that women receive more of their total compensation through amenities. Since wages, but not amenities, increase retirement incomes, this may translate into gender pension gaps. Using a discrete choice experiment we investigate whether the valuation for amenities changes when the trade-off with pension income is made salient. We find that women value amenities more than men. Beliefs about the effect of wage changes on pension income do not show large gender differences. However, women change their choices much more strongly than men when reminded about the effects of current choices on pension income.
[8] Social Pensions and Intimate Partner Violence against Older Women joint with Cristina Bellés-Obrero and Giulia La Mattina [Under review] [CRC working paper No.602]
Grant: Inter-American Development Bank, GD Lab Grant
Abstract: The prevalence and determinants of intimate partner violence (IPV) among older women are understudied. This paper documents that the incidence of IPV remains high at old ages and provides the first evidence of the impact of access to income on IPV for older women. We leverage a Mexican reform that lowered the eligibility age for a non-contributory pension and a difference-in-differences approach. Women's eligibility for the pension increases their probability of being subjected to economic, psychological, and physical IPV. The estimated effects are found only among women in the short term and are more pronounced for women who experienced family violence in childhood and those from poorer households. Looking at potential mechanisms, we find suggestive evidence that men use violence as a tool to control women’s resources. Additionally, women reduce paid employment after becoming eligible for the pension, which may result in more time spent at home and greater exposure to violent partners. In contrast, we show that IPV does not increase when men become eligible for the non-contributory pension.
SELECTED WORK IN PROGRESS
Firms, Managers and Retirement joint with Jan Kabátek and Todd Morris [2024 Netspar Comparative Grant]