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Earnings Test, Non-Actuarial Adjustments and Flexible Retirement
National Bureau of Economic Research [NBER] Link to more items from this source
Feb. 12, 2018
"Earnings tests force workers to exit the labor market when claiming a pension. After abolishing the earnings test, workers can claim their benefits and can keep on working, potentially increasing labor supply. Our key result is that the difference between exit and claiming age strongly depends on the actuarial neutrality of the pension system and can become very large. Abolishing an earnings test as part of a 'flexibility reform' may therefore create more labor supply but at the same time, reduce the average claiming age when adjustments remain less than actuarial, thereby worsening rather than improving the sustainability of public pension systems."

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