Skip to main content

The pension incentive to retire: Empirical evidence for West Germany


In this paper, the impact of the West German pension system on the retirement decisions of elderly citizens is analyzed within the framework of a discrete-time hazard rate model deduced from a micro-economic decision rule. The model is estimated using a panel dataset of elderly West German citizens. In order to improve the precision of the estimates obtained, the data from the sample are combined with aggregate-level information on the labour force participation behaviour of the elderly. Policy simulations based on the estimates reveal that the probability of early retirement can be reduced significantly by appropriate changes in the pension system.

JEL classification: C32, C41, J26

This is a preview of subscription content, access via your institution.

Author information

Authors and Affiliations


Additional information

Received September 6, 1995 / Accepted: August 28, 1996

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Siddiqui, S. The pension incentive to retire: Empirical evidence for West Germany. J Popul Econ 10, 463–486 (1997).

Download citation

  • Issue Date:

  • DOI:

  • Key words: Retirement
  • pensions
  • hazard rates