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Retirement Determinants in Austria: An Aging Society but a Hesitant Policymaker!?

Abstract

The Austrian welfare system faces substantial challenges from the low labor market participation of those aged 55 plus and from persistent early labor market exit. This is partly due to the low female pension age, but also due to the availability of institutionalized financially attractive early retirement pathways. Reforms in the 2000s aimed at closing off early retirement pathways, boosting labor market participation and delaying retirement transitions. However, even though participation rates have improved since, the effect of these reforms has been moderate, because reforms have mainly created financial disincentives to retire early in a still generous state pension system. Negative perceptions about old age at the firm level and early retirement preferences of individuals additionally contribute to early retirement trends. In summary, already implemented and forthcoming measures might affect the effective retirement age in upcoming years. However, individuals and employers also have to change their attitudes toward late retirement to significantly increase old age employment rates.

Keywords

  • Labor Market
  • Disability Pension
  • Early Retirement
  • Pension Benefit
  • Labor Market Participation

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Fig. 9.1
Fig. 9.2
Fig. 9.3

Notes

  1. 1.

    This indicator refers to the ratio between the total number of inactive population aged 65+ and the number of employed people aged between 20 and 64 (European Commission 2012).

  2. 2.

    However, the rough way of calculating the retirement age must be considered when analyzing these data. Changes in the age structure, the amounts of foreign pension, and so on can lead to biased results.

  3. 3.

    In the pay-as-you-go system, current pension benefits are financed by the contributions of the currently active working population (Guger 1998).

  4. 4.

    An increase in the accrual effect makes it more expensive to retire now than later.

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Schmidthuber, L., Schröder, H., Panzenböck, E. (2016). Retirement Determinants in Austria: An Aging Society but a Hesitant Policymaker!?. In: Hofäcker, D., Hess, M., König, S. (eds) Delaying Retirement. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-56697-3_9

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