Pensionable age vs cross-country diversity of economic activity of the near-elderly

Abstract

Purpose. The purpose of this paper is to examine whether cross-country differences in pensionable age explain such differences in economic activity of people at near-retirement age. Design/methodology/approach. The empirical study uses regression models for macro-panel encompassing 21 European countries in the period 2008–2014. Findings. Empirical results indicate that pensionable age is a determinant of cross-country differences in employment rate in the near-retirement age group, and less a factor differentiating average effective retirement age. It turns out that other factors matter, including salaries and wages as percentage of GDP (treated as a proxy for the occupational composition of populations across the countries studied), self-employment, participation in education and training, or self-perceived health. Social implications. The problem of economic activity at the near-retirement age is complex and cannot be limited to legal regulations concerning pensionable age. The policy aiming at stimulating the economic activity of the near-elderly should include actions on many sides including labour market, pension system, education, training, or health care. Originality/value. The results complement studies based on the single-country approach and demonstrate that pensionable age does not account for cross-country differences in terms of average effective age of retirement when controlling for other factors. Moreover, factors differentiating effective retirement age and employments rates across countries studied are not similar.