The Foundation for Applied Economics Studies recommends “taking into account the degree of physical, emotional and mental demands of different occupations” and advocates the introduction of flexible mechanisms for early and partial retirement.
Delaying retirement age increases the risk of premature mortality, so delaying exit from the labor market by one year “significantly” increases the risk of death between ages 60 and 69, especially in the most physically demanding sectors and occupations, subject to higher levels of emotional and mental stress.
A study by the Foundation for Applied Economics Studies (Fedea) also states that this risk of premature death is “much lower” among workers who have access to partial retirement mechanisms that allow them to reduce their working hours from a certain age.
The study pays particular attention to how the effects on mortality vary depending on job characteristics and workday flexibility.
Based on these results, the authors calculate the social costs or benefits of limiting or eliminating the possibility of early retirement and show that “the negative impact on life expectancy is larger than the tax benefits.”
The study calculates the gains to social security from increasing contributions to the pension system and saving the pensions of people with premature deaths, and concludes that “in short, the fiscal savings resulting from postponing retirement and reducing pension benefits do not compensate for the social loss associated with reduced life expectancy, suggesting that the reform is not economically beneficial in the broader context of social welfare.
For Fedea, the results of this report point to the need to design the details of pension policies ‘carefully’ and to address their potential effects on the health of employees.
“It is particularly important to take into account the level of physical, emotional and mental strain of the different professions when setting the minimum and statutory retirement age, which cannot be the same for everyone,” he argues.
It also advocates the introduction, in general terms, of flexible early and partial retirement mechanisms, which allow workers to vary their working hours in the latter part of their working careers.
Source: EITB
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