The Effect of Retirement Incentives: Microevidence for Italy

The recent demographic trends of fast population ageing have challenged the sustainability of the public pension systems in most industrialized countries. We attempt to explain the retirement behavior of older Italians over the past twenty years in relation to dynamic financial incentives and other potential determinants of labor force participation. The results indicate that pension reforms in Italy had an impact in raising effective retirement age by restricting access to financially advantageous public pension schemes.