The Impact of Pension Reforms in Firms and Local Labor Markets

• In Event: Impact of Pension Reforms

Abstract

In this project, we examine the impact of pension reforms in firms and local labor markets. We draw on rich administrative data covering all German workers and firms, combined with quasi-experimental variation from a series of large-scale pension reforms. We begin by showing that the reforms significantly delay retirement among older workers. Leveraging variation in reform exposure across firms and regions, we then analyze the broader employment effects. Preliminary results suggest some negative spillover effects on young and middle-aged workers in more exposed firms, indicating that delayed retirements may hinder career progression at the firm level. However, we find that these negative spillovers do not persist at the labor market level, where the overall employment impact of the reforms is positive. Taken together, our findings suggest that while firm-level frictions may create short-term trade-offs, pension reforms inducing older workers to delay retirement can increase aggregate employment.

Authors

• Santiago Caicedo

• Adrian Lerche

• Henning Schatz, LMU Munich

• Arthur Seibold, LMU Munich