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June 27, 2018

Cluster-Seminar Public Finances and Living Conditions

Training Participation with Increasing Working Horizons: Evidence from a German Pension Reform


June 27, 2018


Karl Popper Room
DIW Berlin
Room 2.3.020
Mohrenstr. 58
10117 Berlin


Elisabeth Kurz

Investments into the human capital of (older) individuals—by employees, governments and especially firms—are expected to depend on the remaining working horizon of individuals. Thus, with the anticipation of shifts in retirement ages due to pension reforms, an increase in training participation rates should be expected. As training increases the employability of older individuals, this would be an important complementary development to pension reforms aiming to increase the employment rates of older age-groups. In this paper, a 1999 German pension reform is used as a natural experiment to study the development of training participation with increasing working horizons. Pre- and post-reform cohorts are compared in a Regression Discontinuity Design using the German Microcensus. However, based on the evidence available for this study, an increase in training participation in anticipation of longer working horizons could not be found. Thus, further interventions are needed to ensure that shifts in the retirement age do not lead to increased old-age unemployment rates due to low productiveness.