Effects of Old-Age Insurance on Female Retirement: Evidence From Cross-Country Time-Series Data

By Richard Johnson
October 2001 
RWP 01-08
Research Division 
Federal Reserve Bank of Kansas City 

Abstract

I examine the effect of Old-Age Insurance (OAI) on older women’s labour-force participation in fourteen countries since around 1930. Older women’s participation has risen in the US, but has fallen over time in some European countries. The discontinuity of incentives at the state pension age helps separate OAI’s effects from those of social mores and husbands’ retirements. Clear effects of OAI on female retirement emerge slowly in time series. I find that, were Germany to adopt the US Social Security system, the participation rate of German women aged 60-4 would increase by 7 percentage points.

Keywords: Social Security, public pensions, economics of the elderly, labor force and employment, retirement policies.

JEL classification: H55, J14, J21, J26

Richard Johnson is an economist at the Federal Reserve Bank of Kansas City. The author is grateful for the excellent research assistance of Jonathan Corning, and to seminar audiences at the Federal Reserve Bank of Kansas City, the Bank of England, and the UK’s Institute for Fiscal Studies and Department of Work and Pensions for their comments and suggestions. The views expressed herein are solely those of the author and do not reflect those of the Federal Reserve Bank of Kansas City or the Federal Reserve System.

Johnson  email: richard.johnson@kc.frb.org

Back to top       RWP home