How raising the full retirement age affects women’s early retirement choices: insights from the interaction of two policies

This paper assesses how a reform that increased statutory retirement age from 60 to 64 years has changed the incentives for early retirement among women. In the Italian context that we consider, women can anticipate retirement after age 57, if they have obtained 35 years of contributions. By using Italian administrative data, the analysis employs a novel identification strategy based on a Differences-in-Differences design, in which assignment to treatment is estimated in a Regression Discontinuity setting. By comparing women who are eligible for the early retirement scheme before and after the reform, we find that those eligible retire earlier by about 2 months after the reform is implemented. We also f ind that women eligible for the early retirement scheme after the reform implementation receive a 900 Euros lower annuity compared to those not affected by the reform. This effect corresponds to a 5% lifetime reduction in annuity. The effects are stronger for women with low labor market attachment and without a college education.