Seminario di Vincenzo Galasso

Sala Seminari – I° piano, Palazzo Levi Cases, Via del Santo 33 - ore 12.30

28.02.2017

Old before their time: The role of employers in retirement decisions

Seminario di Vincenzo Galasso, Università Bocconi, Milano

(co author Piera Bello, Università della Svizzera italiana)

Do elderly workers retire early voluntarily, or are they induced to retire by their employers? We consider an exogenous shock to the labor demand induced by a trade agreement between Switzerland and the EU -- the Mutual Recognition Agreement (MRA). A vast literature suggests that trade liberalizations push firms to relocate and to restructure, with large compositional effects on the labor market. We use a difference in differences approach on Swiss Labor Force Survey data to compare early retirement behavior in a treated group of MRA industries and in two control groups (non-MRA industries and services) in three periods (pre-liberalization, announcement, and implementation). We find an increase in early retirement in the MRA sector during the announcement period, and an increase in the employment share of prime age (31-45 years old) workers and of graduates after the implementation. These effects are stronger in larger firms, and in importing and exporting firms. Wages are instead unaffected. Additional empirical evidence using Swiss Business Census and UN Comtrade data suggests that these effects are due to firms' restructuring, rather than to firms' closure.