مشوق های تامین اجتماعی و تصمیم گیری های بازنشستگی در ایتالیا: بینش تجربی

In the present paper I focus on the measurement of Social Security incentives to early retirement enjoyed by Italian male employees during the late 1980s up to year 2000 and investigate the role played by such incentives and by other socio-economic variables in determining the shape of retirement hazards. Computations, carried out on a panel sample drawn from the SHIW dataset, demonstrate that continuing to work beyond age 60 was strongly discouraged prior to 1990s reforms. Such reforms appear to have especially affected Public Sector workers and younger cohorts. The econometric estimations bring evidence of forward-looking behavior, since individuals do appear to take into account the lifetime path of Social Security incentive changes. Finally, the analysis suggests that such characteristics should be carefully accounted for by any reform aiming at improving the activity rates.

Understanding how individuals decide the timing of retirement is a critical question for Italy, where tightening reforms of the National Social Security (SS from now) system have already been introduced in early 1990s and other reforms are likely to be implemented in the near future. Yet, studies assessing the determinants of retirement are very few and their results are somehow ambiguous, so that little can be said about the effectiveness of any reforms in improving activity rates. In fact, while there appears a general consensus on the generosity of the SS system being the leading explanation of the sizeable exit rates from the labor force at early ages occurred in Italy so far, there is still little evidence on the degree of sensitivity of workers to such incentives. The aim of the present work is twofold: on the one hand, to analyze and quantify the magnitude of SS provided incentives to early retirement for Italian male employees during the late 1980's through year 2000; the second aim is to carry out an empirical analysis in order to investigate the role played by such incentives and by other socio-demographic factors in explaining the shape of the retirement hazards. From a methodological standpoint, this work relies on two important lessons provided by the recent literature on retirement. First, as several authors have pointed out, retirement is likely to be a decision undertaken by rational, forward looking individuals who, in order to maximize their lifetime utility, typically contrast present SS wealth accumulation opportunities with those at some time in the future. Starting from the work by Stock and Wise (1990) on the Option Value of retirement, many works have shared this assumption and assessed its relevance by both estimating structural forms (like Gustman and Steinmeier (1986) and Rust and Phelan (1997)) and reduced forms of retirement decisions (Lumsdaine et al. (1992) and, for Italy, Brugiavini and Peracchi (2004)). Second, some recent studies (Krueger and Pischke (1992), Coile and Gruber, 2000a, ISTAT, 1997, Coile and Gruber, 2000b, Maddala, 1983, Maddala, 1983 and Maddala, 1983 and Chan and Stevens (2001)), have highlighted the importance of the identification problem of the retirement incentive effects estimated by reduced forms. In other words, these authors stress the difficulty in disentangling the role of earnings from the ‘pure’ SS incentives, since the latter are a (non linear) function of the former and, in turn, the former are likely to be endogenous to unobserved tastes for retirement. The solutions to this issue proposed by the cited authors are, on the one hand, a new measure of SS early retirement incentive (the so-called Peak Value build up by Coile and Gruber (2000a)), meant to properly purge out the effect of wage changes from that of SS wealth accumulation and, on the other hand, fixed effects OLS estimates (Chan and Stevens). In the spirit of these works, in the present paper I use some of these measures of Social Security incentives for early retirement (e.g. Accruals, Option Value, Peak Value) and propose three extensions (a ‘one year’ measure —the Marginal Cost of Retirement, and two ‘lifetime’ measures —the Minimum Cost Value and the Minimum Tax Value). I compute these measures both prior to and after the 1990s reforms and both for public and private sector employees and assess their role in explaining the retirement choices of these workers. The data for the analysis is a partially rotating panel sample drawn from the Bank of Italy Survey on Households’ Income and Wealth (SHIW) from 1989 through 2000. Moreover, given that the data does not allow for a fixed effect estimation, I estimate a reduced form model (discrete-time Proportional Hazard) controlling for unobserved heterogeneity via wage polynomials and for a number of other socio-demographic variables. I also analyze the nature of the peak in retirement hazards occurring by age 60 and propose a possible explanation for it. It is worth noting that the period under analysis is of particular interest in that the 1992, 1995 and 1997 SS reforms provide an exogenous source of variability in the data and, thus, should help getting robust statistics. The paper proceeds as follows. In Section 2 I present the institutional features of the Italian SS system prior to and after the 1990s reforms. Next, after sketching the main findings of previous related literature for Italy, in Section 3 I present the new measures aiming of early retirement incentives. Next, I describe the empirical strategy followed in building up the panel and computing the SS incentives and present the main features of the SS incentives prior to and after the reforms. Finally, in Section 5 I lay out the results of the econometric analysis and some concluding remarks.

In the present paper I focus on the measurement of Social Security (SS) incentives to early retirement enjoyed by Italian male employees during the late 1980s up to 2000 and I investigate the role played by such incentives and by other socio-economic variables in determining the shape of retirement hazards. The period under investigation is particularly interesting in that the 1992 and subsequent SS reforms, which have tightened eligibility rules and cut benefits, provide an exogenous source of variability in the SS incentive measures and, thus, help getting robust statistics about the effect of these parameters on retirement behavior. As for the data, I build up a sample by exploiting the panel information provided by the Bank of Italy Survey on Wealth and Income of Italian households (SHIW). As far as SS incentive measures to early retirement are concerned, I consider several measures and classify them according to whether they are static (Social Security Wealth, Replacement Ratio) or dynamic. Among the latter, I discriminate between ‘one-year’ (Accrual, Implicit Tax/Subsidy) and ‘lifetime’ measures (i.e. the Peak Value and the Option Value). Moreover, I propose three extensions of already existing ‘dynamic’ parameters: the Marginal Cost of Retirement, the Minimum Cost Value and the Maximum Tax Value and test their role in explaining the shape of older cohorts’ exit rates from labor force. The main findings of these computations unveil that both static and dynamic incentive measures, prior to 1990s reforms, provided a strong discouragement to continued work after age 60, mainly due to eligibility constraints and to the pension benefit formula; such constraints have been particularly relevant to Private Sector employees. Early 1990s reforms have reduced such incentives, although not uniformly: precisely, Public Sector employees appear to have borne most of the burden of the benefit cuts, particularly due to the higher penalizations on early retirement. There also comes out that younger cohorts have been and will be more dramatically in the future the net-payers for the rebalance of the Italian SS system. In fact, both the generous pre-reform benefits and the way the transition phase of the reforms has been set up have encouraged older cohorts to anticipate their exit from the labor force. The econometric estimates show that the Replacement Ratio is by far the most effective measure in explaining retirement decisions, although all SS incentive parameters are individually significant and with the expected sign; however, the ‘one year’ dynamic incentives turn to be insignificant when considered together with the other measures; finally, among the ‘lifetime’ dynamic incentives, both the Peak Value and the Minimum Tax Value do appear to play a relevant role in determining the shape of retirement decisions. All in all, the econometric analysis shows that forward looking models are crucial for explaining retirement choices in Italy, since individuals appear to recognize the lifetime path of Social Security Wealth accumulation opportunities and take this into account in making their retirement decisions. Among the other results, I find significant differences among Public and Private Sector responsiveness to the Peak Value, current wage and to a certain extent to the Replacement Ratio, which makes it reasonable to impute the diversity in retirement hazards both to the different rules and to differences in tastes. The nonlinearity of SS incentive changes due to eligibility constraints appears to be mostly responsible for the age-60-peak of the exit hazards; however, the role of other non-economic, unexplained factors associated to the choice of retiring by age 60 (such as ‘social rules’ or ‘rules of thumb’) cannot be rejected. Interestingly enough, this role is not confirmed by the data after the mid-1990s: whether the break down of the age 60 spike is going to be a persistent feature of retirement choices in Italy or not seems an interesting issue for future research. As for the other socio-economic factors, age, education, regional residence affect significantly the probability of retirement; coordination in retirement choices within the household does appear to apply to Public Sector employees only; other factors, such as family wealth and composition and unemployment rates have the expected sign but are insignificant. Finally, the short run effects of a simulated reform clarify the relevance of the forward-looking behavior of Italian workers: in fact, it is argued that the older cohorts' participation rate to labor force can only be raised, in the short run, if individuals, by delaying their retirement, are enabled to offset the reduction in the static incentives (i.e. lower Replacement Ratios) by higher lifetime incentives (say, higher Peak Values).