"How raising the full retirement age affects early retirement choices: insights from the interaction of two policies" by Elena Bassoli

Topic

This paper examines how a recent unexpected Italian pension reform affected women’s early retirement incentives. Using detailed administrative data, it applies a difference-in-differences approach within a regression discontinuity design, exploiting that (i) women with just over 35 years of contributions are eligible for early retirement, and (ii) women born in 1952 are the first cohort affected, while those born in 1951 are not. Results show that the retirement age gap between women with more or less than 35 years of contributions falls by two months due to the reform. Since early retirement reduces the annuity, we also assess its impact on pensions: the annuity gap decreases by about 5% over a lifetime, with stronger effects for women with low labor market attachment and education.