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No country for old men? Microsimulation effects of activating pensioners on the labour market
[journal article]
Abstract Being a pensioner in Croatia carries certain risks of poverty and inequality compared to the rest of the population. Low level of average pension compared to the minimal wage is just one case in point. On the other hand, the labour market shortage is not negligible and there is also a poor track rec... view more
Being a pensioner in Croatia carries certain risks of poverty and inequality compared to the rest of the population. Low level of average pension compared to the minimal wage is just one case in point. On the other hand, the labour market shortage is not negligible and there is also a poor track record when it comes to pension system reforms in the last two decades. This paper investigates a possible path of the future pension system reform aimed at increasing household income levels - focused on the labour market participation of people aged 65+ who are willing and able to solve labour shortages present in the market. The general aim of the paper is to analyze the effects that the establishment of the Pensioners Service Center might have on market income, mean household income by decile groups, poverty and inequality indices. It fills the research gap by conducting the first microsimulation of the pension system reform in Croatia focusing on market income. The hypothetical reform is simulated using the tax-benefit microsimulation model EUROMOD based on EU-SILC 2019 data for Croatia. Results confirm market income as the main cause of income inequality as well as that the second decile is the target group of the proposed intervention. Pensioners have a clear monetary incentive to increase their labour supply, which in return decreases all poverty and inequality indices.... view less
Keywords
man; labor market; aging; retiree; simulation; inequality; poverty; elderly worker; labor force participation; manpower requirements; Croatia
Classification
Gerontology
Labor Market Research
Women's Studies, Feminist Studies, Gender Studies
Free Keywords
microsimulation; pension system reform; EU-SILC 2019
Document language
English
Publication Year
2022
Page/Pages
p. 217-225
Journal
Croatian Operational Research Review, 13 (2022) 2
DOI
https://doi.org/10.17535/crorr.2022.0016
ISSN
1848-9931
Status
Published Version; peer reviewed