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Partial retirement: effects on employment and implications for government budgets

The demographic change is posing many challenges for government budgets. In the face of a shrinking work force, keeping the number of workers and thus pension contributors at the highest possible level is a key economic policy goal.

28. februar 2018

This could be achieved if people retire from the work force later in life. Partial retirement, the option to work part-time while drawing a pension before reaching the normal retirement age, could create the necessary conditions for reaching this goal. The impact of partial retirement on employment will be simulated below. The results show that unrestricted access to partial retirement can lead to an increase in employment volume and generate positive fiscal effects.