Vierteljahrshefte zur Wirtschaftsforschung 1 / 1971, S. 33-42
The introduction of a flexible retirement age for the public pension program affects the labor supply as well as the labor productivity in the economy. In the foregoing study, these two aspects are first dealt with separately and then discussed in combination in a final section. The first part of the study is devoted to a forecast of the probable behavior of the economically active population given a change in pension stipulations. The estimates are based on the analysis of behavior according to occupational categories. The results of these estimates - reduction of potential labor supply by 1.0 per cent and 0.7 per cent in the years 1975 and 1980 respectively if retirement age is lowered five years - are substantiated by a check on the relation between invalidity and gainful activity. The second part of the study contains an estimate of the labor productivity of that group leaving the productive process. It is revealed that the effects of reduced labor supply potential are compensated to within one-tenth by an increased labor productivity of the remaining labor supply. In the event of a gradual lowering of the retirement through 1975, the effect on economic growth would be a reduction of 0.1 to 0.2 per cent annually. If the lowering is distributed over the years through 1980, the annual growth loss would amount to less than 0.1 per cent and thus be nearly negligible.