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


  • Filip Chybalski Department of Management, Lodz University of Technology, Lodz, Poland


Retirement, Pensions, Labour market, Comparative study, Population aging, Age management


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.



Download data is not yet available.


Agnew, J.R., Bateman, H. and Thorp, S. (2013), “Financial literacy and retirement planning in Australia”, Numeracy, Vol. 6 No. 2.

Baltagi, B.H. (2013), Econometric Analysis of Panel Data, Wiley, Chichester.

Barr, N. (2006), “Pensions: overview of the issues”, Oxford Review of Economic Policy, Vol. 22 No. 1, pp. 1-14.

Barr, N. and Diamond, P. (2006), “The economics of pensions”, Oxford Review of Economic Policy, Vol. 22 No. 1, pp. 15-39.

Bauer, A.B. and Eichenberger, R. (2016), “Endogenous aging: how statutory retirement age drives human and social capital”, available at: (accessed 18 October 2017).

Bernal, N. and Vermeulen, F. (2014), “The impact of an increase in the legal retirement age on the effective retirement age”, De Economist, Vol. 162 No. 2, pp. 115-145.

Bielecki, M.Goraus, K.Hagemejer, J. and Tyrowicz, J. (2014), “The sooner the better - the welfare effects of the retirement age increase under various pension schemes, No. 12/2014 (129), Warsaw”, available at: (accessed 18 October 2017).

Bielecki, M., Goraus, K., Hagemejer, J. and Tyrowicz, J. (2016), “Decreasing fertility vs increasing longevity: raising the retirement age in the context of ageing processes”, Economic Modelling, Vol. 52, pp. 125-143.

Binswanger, J. (2012), “Life cycle saving: insights from the perspective of bounded rationality”, European Economic Review, Vol. 56 No. 3, pp. 605-623.

Blekesaune, M. and Solem, P.E. (2005), “Working conditions and early retirement: a prospective study of retirement behavior”, Research on Aging, Vol. 27 No. 1, pp. 3-30.

Bodie, Z. and Prast, H. (2012), “Rational pensions for irrational people: behavioral science lessons for The Netherlands”, in Bovenberg, L., van Ewijk, C. and Westerhout, E. (Eds), The Future of Multi-Pillar Pensions, Cambridge University Press, Cambridge, pp. 299-329.

Boisclair, D., Lusardi, A. and Michaud, P.C. (2017), “Financial literacy and retirement planning in Canada”, Journal of Pension Economics and Finance, Vol. 16 No. 3, pp. 277-296.

Brown, M. and Graf, R. (2013), “Financial literacy and retirement planning in Switzerland”, Numeracy, Vol. 6 No. 2, pp. 1-23.

Bucher-Koenen, T. and Lusardi, A. (2011), “Financial literacy and retirement planning in Germany”, Journal of Pension Economics and Finance, Vol. 10 No. 4, pp. 565-584.

Byrne, A., Blake, D. and Mannion, G. (2010), “Pension plan decisions”, Review of Behavioural Finance, Vol. 2 No. 1, pp. 19-36.

Coile, C.C. and Levine, P.B. (2011), “The market crash and mass layoffs: how the current economic crisis may affect retirement”, The B. E. Journal of Economic Analysis and Policy, Vol. 11 No. 1, pp. 1-40.

Dahl, S.-A., Nilsen, O.A. and Vaage, K. (2000), “Work or retirement? Exit routes for Norwegian elderly”, Applied Economics, Vol. 32 No. 14, pp. 1865-1876.

Disney, R., Emmerson, C. and Wakefield, M. (2006), “Ill health and retirement in Britain: a panel data-based analysis”, Journal of Health Economics, Vol. 25 No. 4, pp. 621-649.

Dwyer, D.S. and Mitchell, O.S. (1999), “Health problems as determinants of retirement: are self-rated measures endogenous?”, Journal of Health Economics, Vol. 18 No. 2, pp. 173-193.

Ebbinghaus, B. (2006), Reforming Early Retirement in Europe, Japan and the USA, Oxford University Press, Oxford.

Fatas, E., Lacomba, J.A. and Lagos, F. (2007), “An experimental test on retirement decisions”, Economic Inquiry, Vol. 45 No. 3, pp. 602-614.

Feldstein, M. (1974), “Social security, induced retirement, and aggregate capital accumulation”, Journal of Political Economy, Vol. 82 No. 5, pp. 905-926.

Feldstein, M. (1996), “Social security and saving: new time series evidence”, National Tax Journal, Vol. 49 No. 2, pp. 151-164.

Fisher, G.G., Infurna, F.J., Grosch, J., Stachowski, A., Faul, J.D. and Tetrick, L.E. (2014), “Mental work demands, retirement, and longitudinal trajectories of cognitive functioning”, Journal of Occupational Health Psychology, Vol. 19 No. 2, pp. 231-242.

Fornero, E., Lusardi, A. and Monticone, C. (2010), “Adequacy of savings for old age in Europe”, in Bovenberg, L., van Soest, A. and Zaidi, A. (Eds), Ageing, Health and Pensions in Europe: An Economic and Social Policy Perspective, Palgrave Macmillan, London, doi: 10.1057/9780230307346.

Góra, M. (2008), “Retirement decisions, benefits and the neutrality of pension systems”, available at: (accessed 27 August 2017).

Gustafson, M.T. (2017), “The market sensitivity of retirement and defined contribution pensions: evidence from the public sector”, Journal of Public Economics, Vol. 145, pp. 1-13.

Gustman, A.L., Steinmeier, T.L. and Tabatabai, N. (2010), “What the stock market decline means for the financial security and retirement choices of the near-retirement population”, Journal of Economic Perspectives, Vol. 24 No. 1, pp. 161-182.

Hagan, R., Jones, A.M. and Rice, N. (2009), “Health and retirement in Europe”, International Journal of Environmental Research and Public Health, Vol. 6 No. 10, pp. 2676-2695.

Hayward, M.D., Grady, W.R., Hardy, M.A. and Sommers, D. (1989), “Occupational influences on retirement, disability, and death”, Demography, Vol. 26 No. 3, pp. 393-409.

Hochguertel, S. (2010), “Self-employment around retirement age, No. 07/2010-030”, available at:

Karpansalo, M., Manninen, P., Kauhanen, J., Lakka, T. and Salonen, J. (2004), “Perceived health as a predictor of early retirement”, Scandinavian Journal of Work, Environment and Health, Vol. 30 No. 4, pp. 287-292.

Klapper, L. and Panos, G.A. (2011), “Financial literacy and retirement planning: the Russian case”, Journal of Pension Economics and Finance, Vol. 10 No. 4, pp. 599-618.

Knoll, M.A.Z. (2010), “The role of behavioral economics and behavioral decision making in Americans’ retirement savings decisions”, Social Security Bulletin, Vol. 70 No. 4, pp. 1-23.

Kogut, T. and Dahan, M. (2012), “Do you look forward to retirement? Motivational biases in pension decisions”, Judgement and Decision Making, Vol. 7 No. 3, pp. 282-291.

Kuhn, M. and Prettner, K. (2016), “On the long-run growth effect of raising the retirement age, No. 10/2016, Vienna”, available at:

Lacomba, J.A. and Lagos, F. (2006), “Population aging and legal retirement age”, Journal of Population Economics, Vol. 19 No. 3, pp. 507-519.

Lusardi, A. and Mitchell, O.S. (2017), “How ordinary consumers make complex economic decisions: financial literacy and retirement readiness”, Quarterly Journal of Finance, Vol. 7 No. 3.

McConnell, M. (2013), “Behavioral economics and aging”, The Journal of the Economics of Ageing, Vols 1/2, pp. 83-89.

McFall, B.H. (2011), “Crash and wait? The impact of the great recession on the retirement plans of older Americans”, American Economic Review, Vol. 101 No. 3, pp. 40-44.

McGarry, K. (2004), “Health and retirement: do changes in health affect retirement expectations?”, The Journal of Human Resources, Vol. 9 No. 3, p. 624.

Manoli, D.S. and Weber, A. (2016), “The effects of the early retirement age on retirement decisions”, NBER Working Paper Series, doi: 10.3386/w22561.

Marmora, P. and Ritter, M. (2015), “Unemployment and the retirement decisions of older workers”, Journal of Labor Research, Vol. 36 No. 3, pp. 274-290.

Mitchell, O. and Utkus, S. (2003), “Lessons from behavioral finance for retirement plan design, No. PRC WP 2003-6, Philadelphia”, available at: (accessed 27 December 2017).

OECD and Eurostat (2019), “Short-term interest rates (indicator)”, available at (accessed 8 January 2019).

Parker, S.C. and Rougier, J.C. (2007), “The retirement behaviour of the self-employed in Britain”, Applied Economics, Vol. 39 No. 6, pp. 697-713.

Peng, X. and Mai, Y. (2013), “Population ageing, retirement age extension and economic growth in China – a dynamic general equilibrium analysis, Clayton”, available at: (accessed 17 October 2017).

Sauré, P. and Zoabi, H. (2012), “Retirement age across countries: the role of occupations, No. 2012-06”, available at:

Schuetze, H.J. (2015), “Self-employment and retirement in Canada: the labour force dynamics of older workers”, Canadian Public Policy, Vol. 41 No. 1, pp. 65-85.

Staubli, S. and Zweimüller, J. (2013), “Does raising the early retirement age increase employment of older workers?”, Journal of Public Economics, Vol. 108, pp. 17-32.

Szinovacz, M.E. and Davey, A. (2005), “Predictors of perceptions of involuntary retirement”, The Gerontologist, Vol. 45 No. 1, pp. 36-47.

Tapia, W. and Yermo, J. (2007), “Implications of behavioural economics for mandatory individual account pension systems, No. 11”, available at:

Van Rooij, M.C.J., Lusardi, A. and Alessie, R.J.M. (2011), “Financial literacy and retirement planning in The Netherlands”, Journal of Economic Psychology, Vol. 32 No. 4, pp. 593-608.

Vermeer, N., Mastrogiacomo, M. and Van Soest, A. (2016), “Demanding occupations and the retirement age”, Labour Economics, Vol. 43, pp. 159-170.

Vogel, E., Ludwig, A. and Börsch-Supan, A. (2015), “Aging and pension reform: extending the retirement age and human capital formation”, Journal of Pension Economics and Finance, pp. 1-27.

Wooldridge, J.M. (2010), Econometric Analysis of Cross Section and Panel Data, The MIT Press, Cambridge, London, doi: 10.1515/humr.2003.021.




How to Cite

Chybalski, F. (2021). Pensionable age vs cross-country diversity of economic activity of the near-elderly. Journal of Economics, Finance and Administrative Science, 26(51), 61–76. Retrieved from