Do early pension withdrawals reduce labour supply?: evidence from Australia’s pandemic response

Lane, Oscar; Liu, Mingji

Do early pension withdrawals reduce labour supply?: evidence from Australia’s pandemic response

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Lane, O, Liu, M. Do early pension withdrawals reduce labour supply?: evidence from Australia’s pandemic response. 2024. handle: http://hdl.handle.net/10230/60932

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Abstract

We investigate the impact of the early release of Australian pension savings during the COVID-19 pandemic on labour supply behaviour using a comprehensive longitudinal panel dataset. Given the endogenous nature of this policy, we apply an instrumental variable strategy to isolate the causal effect of the policy on hours worked. Our findings show the scheme led to a large reduction in hours worked in 2020. These effects persisted but moderated in 2021 and 2022. Our findings inform the labour market impacts of early pension release schemes in a crisis context and the design of pension systems more broadly.

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Treball fi de màster de: Master's Degree in Specialized Economic Analysis: Economics of Public Policy Program. Curs 2023-2024
Directors: Ada Ferrer i Carbonell; Joan Llull