Cluster-Seminar Öffentliche Finanzen und Lebenslagen

This paper uses a Regression Kink Design to estimate the labor supply effects of changes in the financial incentives for early retirement. In particular we examine the effect of the gradual introduction of pension deductions for early retirement according to the 1992 German pension reform on the actual retirement age of women eligible for women old-age pensions. This reform allows to exploit exogenous variation in  benefits using kinks in the schedule of pension benefits depending on the birth cohort. For the empirical analysis we use high-quality administrative data from the German Federal Pension Insurance (VSKT) and find positive and significant effects of the reform on the actual retirement age.