Retirement Preferences and Policy Implications across Europe

Arnstein Aassve, Università Bocconi
Cristina Ruggeri, Università Bocconi
Zsolt Speder, HCSO Demographic Research Institute

Increasing life expectancy coupled with declining birth rates is prompting European countries to revise their current pension schemes. The policy reforms needed constitutes perhaps the biggest challenge facing European policy makers. The urgency of the policy reforms are reflected by the European Council Summits of Stockholm (2001) and Barcelona (2002), where policy makers agreed to both increase the labour force participation among older workers and to delay the retirement period. As the great majority of countries are way off the targets set for 2010, we investigate individuals’ preferences for work and retirement in 23 European countries. We find that on average individuals prefer to retire at a younger age that the current mean retirement age though there is huge variation both at the individual and country levels. We find rather robust evidence to suggest that individuals are willing to work longer as the average life expectancy is increasing.