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Dangerous Flexible Retirement Reforms – A Supplementary Placebo Analysis across Time

In the last decades, many governments have enacted flexible retirement reforms as a seemingly elegant way to increase older workers’ labor supply. Börsch-Supan et al. (2018) use the synthetic control method to evaluate the effects of flexibility reforms from nine OECD countries that came into effect between 1992 and 2006. To evaluate the significance of the treatment effects, the authors apply in-space placebo studies. This paper scrutinizes these results by applying in-time placebo studies.

29. mai 2020

Using the time dimension means an artificial reassignment of the flexibility reforms to placebo reform dates other than the actual reform year. The supplementary analysis reveals that the results found in Börsch-Supan et al. (2018) are valid to this robustness check. Overall, the supplementary analysis sustains the result that the reforms have produced zero to negative effects on total labor supply.