Financial Incentives and Labor Force Participation of Older Workers: Evidence from France

This paper estimates the impact of financial incentives on retirement decision in France for cohorts of men retiring between 1994 and 2012. During these two decades, a number of pension reforms took place, all aiming to achieve financial balance in the context of increasing life expectancy. These reforms strengthened incentives to retire later, either by offering increased pension benefit for later retirement—becoming close to actuarial fairness—or by increasing early and normal retirement ages. This paper aims to assess how much these financial incentives and age references did contribute to the recent increase in employment rates of older workers.