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Retirees and motivation to work by the type of employment contract: impact of the Czech reform

Retirees and motivation to work by the type of employment contract: impact of the Czech reform In this paper, the authors analyse a 2010 legal reform in the Czech Republic, which allowed retirees to simultaneously receive regular pension benefits and to work on a permanent contract for a period longer than one year. Previously, concurrence of employment and receipt of retirement benefits were only allowed in conjunction with a temporary work contract with a maximum duration of one year.Design/methodology/approachThe authors employ the difference-in-differences method. The authors include only males in the analysis because it is not possible to identify the legal retirement age for women from available data. Men in the workforce 1–3 years prior to the statutory retirement age are in a control group, while men 1–3 years older are in a treatment group.FindingsThe authors show that the reform significantly increased the share of permanent contracts held by retirees (by 22.5–27.6 percentage points), though we do not find any aggregate short-term change in employment of retirees. Heterogeneity analysis shows a significant increase in the employment of retirees with only elementary school education (by 17.9 percentage points) and a significant decrease in the number of hours worked by retirees (by 2.5 h weekly for low-educated workers).Practical implicationsThe policy conclusion is that the regulation of employment contract does not affect aggregate employment, but may improve employment of low skilled workers.Originality/valueTo the authors’ best knowledge, there are no studies directly analysing motivation of retirees by types of employment contracts. The authors, thus, add to the literature that studies dealing with the general fixed-term versus permanent contracts (Engellandt and Riphahn, 2003) and motivation to work. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Manpower Emerald Publishing

Retirees and motivation to work by the type of employment contract: impact of the Czech reform

International Journal of Manpower , Volume 41 (5): 23 – Jul 17, 2020

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0143-7720
DOI
10.1108/ijm-12-2019-0544
Publisher site
See Article on Publisher Site

Abstract

In this paper, the authors analyse a 2010 legal reform in the Czech Republic, which allowed retirees to simultaneously receive regular pension benefits and to work on a permanent contract for a period longer than one year. Previously, concurrence of employment and receipt of retirement benefits were only allowed in conjunction with a temporary work contract with a maximum duration of one year.Design/methodology/approachThe authors employ the difference-in-differences method. The authors include only males in the analysis because it is not possible to identify the legal retirement age for women from available data. Men in the workforce 1–3 years prior to the statutory retirement age are in a control group, while men 1–3 years older are in a treatment group.FindingsThe authors show that the reform significantly increased the share of permanent contracts held by retirees (by 22.5–27.6 percentage points), though we do not find any aggregate short-term change in employment of retirees. Heterogeneity analysis shows a significant increase in the employment of retirees with only elementary school education (by 17.9 percentage points) and a significant decrease in the number of hours worked by retirees (by 2.5 h weekly for low-educated workers).Practical implicationsThe policy conclusion is that the regulation of employment contract does not affect aggregate employment, but may improve employment of low skilled workers.Originality/valueTo the authors’ best knowledge, there are no studies directly analysing motivation of retirees by types of employment contracts. The authors, thus, add to the literature that studies dealing with the general fixed-term versus permanent contracts (Engellandt and Riphahn, 2003) and motivation to work.

Journal

International Journal of ManpowerEmerald Publishing

Published: Jul 17, 2020

Keywords: Retirement policies; Labor supply; Population aging; J26; J11; H68; H55

References