11 Mar 2008

Retirement Decisions as a Function of Socio-Economic Factors

in Central and Eastern European Countries

Anna Ruzik

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European Network of Economic Policy Research Institutes (ENEPRI) Research Report No. 52 / 15 pages

The aim of this report is to analyse the mechanisms influencing the labour supply of older workers in the Central and Eastern European (CEE) countries that transitioned from centrally planned to market economies in the early 1990s. Despite similar histories and economic reforms at the beginning of the 21st century, the CEE countries have different outcomes for the employment rates of older workers.
This report presents general trends and then studies the labour force participation dynamics of older workers in a selected group of CEE countries. The analysis uses longitudinal data from the available 2003 and 2004 waves of labour force surveys.
It turns out that older workers react similarly to certain economic incentives for retirement offered by the social security systems in the countries studied. Higher education increases the chances of (better) work and thus enables individuals to work longer. In addition, jobs in the service sector provide opportunities for later retirement. Yet there are differences among the countries in the region, some of which can be explained by labour market conditions and institutions, along with other factors not related to economic conditions.