Occupational composition of an economy and effective retirement age across European countries: an econometric analysis

Abstract

In this study, panel regression models for 21 European countries and data covering the period between 2008 and 2014 were used to demonstrate that the distribution of working population across different occupational groups explains cross-country differences in terms of the average effective retirement age. Thus, while the great majority of previous studies verified the causal trade-off investigated on the basis of single-country micro data with reference to one economy, this study takes perspective of cross-country diversity in terms of the investigated relationship. The confirmed link holds even when controlling inter alia for health status, education, unemployment, old-dependency ratio, interest rate, GDP per capita, or the share of salaries and wages in GDP. An important practical implication for the policy-makers is that decisions limited only to the increase in the universal pensionable age cannot be effective, since the occupational composition of an economy is very relevant.