RT Journal Article
SR Electronic
T1 Impact of Raising the Retirement Age on Firms
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 0821-11820R2
DO 10.3368/jhr.0821-11820R2
A1 Hut, Stefan
YR 2024
UL http://jhr.uwpress.org/content/early/2024/01/02/jhr.0821-11820R2.abstract
AB This paper studies the impact of raising the retirement age on firms. I rely on a policy change in the Netherlands that sharply increased the effective retirement age for workers born after 1950. For every additional retained older worker due to the reform, firms employ 0.6 fewer younger workers and reduce investments by 6,000 EUR annually. Adjustments are concentrated in low free cash flow firms, and only these firms experience declines in revenue and profitability. Lastly, I show that more time to respond to the policy implementation helps firms smooth adjustments and reduce negative profit effects.