The Foundation for Applied Economic Studies recommends “taking into account the degree of physical, emotional and mental demands of the different occupations” and advocates introducing flexible mechanisms for early and partial retirement.
Delaying retirement age increases the risk of early mortality, such that delaying leaving the labour market by one year “significantly” increases the risk of dying between the ages of 60 and 69, especially in the most physically demanding sectors and occupations subject to a higher level of emotional and mental stress.
A study by the Foundation for Applied Economic Studies (Fedea) also states that this risk of early mortality is “much lower” among those workers who have access to partial retirement mechanisms that allow them to reduce their working hours after a certain age.
The study pays particular attention to how the effects on mortality vary depending on the characteristics of the jobs and the flexibility of the working day.
Based on these results, the authors calculate the social cost or benefit of restricting or eliminating the option of early retirement and show that “the adverse impact on life expectancy outweighs the tax gains.”
The study calculates the gain to Social Security from increasing contributions to the pension system and saving on the pensions of people with early mortality, and concludes that, “in sum, the fiscal savings derived from the delay in retirement and the reduction in the duration of pension payments do not compensate for the social loss associated with the reduction in life expectancy, which suggests 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 “carefully” the details of retirement policies and to consider their possible effects on workers’ health.
“It is important, in particular, to take into account the degree of physical, emotional and mental demands of the different occupations when setting the minimum and legal retirement ages, which cannot be the same for everyone,” he argues.
It also advocates the general introduction of flexible mechanisms for early and partial retirement that allow workers to regulate their working hours at the end of their working careers.
Source: Eitb
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