February 20, 2019

Cluster-Seminar Public Finances and Living Conditions

Retirement and informal care provision - Effects of the 1999 pension reform in Germany

Date

February 20, 2019
12:30 - 13:30

Location

Anna-J.-Schwartz-Raum
DIW Berlin
Room 5.2.010
Mohrenstr. 58
10117 Berlin

Speaker

Björn Fischer
Using a reform induced increase in the ERA for German women this paper uncovers causal effects of retirement on informal care provision. Studies so far focus on the causality of labor supply on informal care activity in the middle part of an individual’s working career, mostly neglecting effects of retirement. This paper uses the 1999 reform that abolished the ERA at age 60 for women born from 1952 onward to instrument retirement and estimate a causal effect on informal care provision. Doing so, the underlying mechanism, namely that retirement solves a time conflict at the individual level is accessed. I apply two German survey data sets (SOEP and SHARE) and find that affected women decrease their care activity due to the reform on the extensive margin. In an heterogeneity analysis I show that women retiring from employment and highly educated women drive the results. Retirement is estimated to increase informal care activity on the extensive margin.