Template-Type: ReDIF-Paper 1.0

Author-Name: Martina Eschelbach
Author-X-Name-First: Martina 
Author-X-Name-Last: Eschelbach


Title: Labor supply after normal retirement age in Germany – A fourth pillar of retirement income?

	
Abstract: Many European countries are currently transferring their pay-as-you-go public pension system to a three-pillar-system of public, occupational, and private pensions. In Germany, economists expect a pension gap for future retiree cohorts as public pensions will decrease and private old age provision is low. In this paper we ask, whether this pension gap might lead to the rise of a fourth pillar of retirement income: labor earnings. Using data from the German Socio-economic Panel, we find that retirees with low nonlabor income are more likely to work after normal retirement age. The negative relationship between nonlabor income and the participation probability is robust across educational and employment groups and particularly strong for retirees with low income. We conclude that labor market earnings constitute a pillar of retirement income already today.

Length:  37 pages
Creation-Date:  2011-10
File-URL: http://www.bgpe.de/texte/DP/106_Eschelbach.pdf
File-Format: Application/pdf
File-Function: First version, 2011
Number: 106
Classification-JEL: J22, J26
Keywords: old age labor supply, work after normal retirement age, fourth pillar of retirement income
Handle: RePEc:bav:wpaper:106_Eschelbach