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The role of institutions and health in European patterns of work and retirement
- Authors:
- BORSCH-SUPAN Axel, BRUGIAVINI Agar, CRODA Enrica
- Journal article citation:
- Journal of European Social Policy, 19(4), October 2009, pp.341-358.
- Publisher:
- Sage
This article sheds light on the complex retirement patterns which have emerged in Europe during recent decades. They are very different among European countries, in spite of similar trends in mortality. There are 2 possible explanations for this: institutional differences and health differences. The aim of this article was to examine the relative weight of these 2 explanations. It used data from the first 2 waves of the Survey of Health, Ageing and Retirement in Europe (SHARE) to investigate the role of pension and social security institutions in shaping the European patterns of work and retirement and to provide a careful account of the health status of respondents. The article concludes that, while health is an important determinant of earlier retirement within each country, it does not explain the large cross-national variation. Rather, institutional differences in welfare systems almost exclusively drive the distribution and the age pattern of labour-force participation and retirement. Countries in which early retirement is easy and carries generous benefits generate a high prevalence of early retirees. The study also looked at health status and disability-benefit recipiency, concluding that the variation in rates across Europe is due to the minimum level of disability that an applicant must demonstrate in order to obtain full benefits. Finally, the article discusses the unused labour capacity of healthy individuals no longer in the labour force and argues that politicians need to exploit this capacity in order to reduce the burden on pension systems and benefits.