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Retirement decisions in transition: microeconometric evidence from Slovenia

Author

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  • Sašo Polanec
  • Aleš Ahčan
  • Miroslav Verbič
Abstract
In this article we analyse old-age retirement decisions of Slovenian men and women eligible to retire in the period 1997--2003. In comparison with established market economies we find relatively high probabilities of retirement that decline with age. This unusual pattern can partly be attributed to weak incentives to work, inherent in the design of the pension system and reflected in predominantly negative values of accruals, and to transition-specific increase in wage inequality in the late 1980s and early 1990s. This is reflected in low wages and relatively high pensions of less productive (skilled) workers and vice versa. We find that the probability of retirement decreases with option value of work and net wages, although the response to the former, when controlling for the latter, is rather weak. Our results also imply that less educated individuals and individuals with greater personal wealth are more likely to retire.

Suggested Citation

  • Sašo Polanec & Aleš Ahčan & Miroslav Verbič, 2013. "Retirement decisions in transition: microeconometric evidence from Slovenia," Post-Communist Economies, Taylor & Francis Journals, vol. 25(1), pages 99-118, March.
    • Handle: RePEc:taf:pocoec:v:25:y:2013:i:1:p:99-118
    DOI: 10.1080/14631377.2013.756703
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    Cited by:

    1. Miroslav Verbič & Rok Spruk, 2014. "Aging Population and Public Pensions: Theory and Macroeconometric Evidence," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(3), pages 289-316, June.
    2. Aristovnik, Aleksander & Jaklič, Ksenja, 2013. "Job Satisfaction of Older Workers as a Factor of Promoting Labour Market Participation in the EU: The Case of Slovenia," MPRA Paper 48809, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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