Shall we be afraid to raise the retirement age?

Tags: labour_market, social_development, publications_from_2011

Publication date: 12.05.2011

We present the first this year text of the "IBS Policy Papers". It is devoted to a need for change in the statutory retirement age in Poland. Demographic processes in the coming few years will have a significant negative impact on the economy, labor market and social security system. Our country is poorly prepared for the changes caused by aging of the population. Poles, especially women, early end professional activity - in 2009 the employment rate of women aged 55-64 years, only in Malta, and the age of deactivation only in Malta and Slovenia, were lower than in Poland. At present, in two thirds of EU countries effective exit age from the labor market for women exceeds 60 years, which is the statutory retirement age in Poland.

To counteract the negative impact of aging populations it is necessary, in our opinion, to gradually equalize retirement ages for men and women, which should begin as soon as possible. We show that often raised concerns about rising unemployment as a result of raising the retirement age are unfounded. Also, the consequences of termination of the possibility of acquiring rights to early retirement from 2008 are optimistic. We estimate that the compensation and, in particular, raising the statutory retirement age of both sexes to a level of 67 years gives similar results for the labor market and economy, as the elimination of pension benefits (early retirement) in 2009. We show that this change brings significant benefits in the fiscal horizon of the decade, and from the perspective of participants in the pension system is a key step to raise the height of the expected benefits and replacement rates. The demographic structure of Polish population causes that enforcing the reform over the decade gives a lot more benefits than implementation of it just in the years 2021-2030.

Publication in Polish.

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