Possible Effects of a Standard retirement Age of 67 on Labour Supply - Simulation Results

The labour supply effects of an increase in the statutory retirement age from 65 to 67 in the period 2034 to 2037 are simulated for Austria using the dynamic microsimulation model microDEMS. The results show an increase in labour supply of about 96,800 persons in 2040, of which 73 percent are in the 60 to 64 age group and 27 percent in the 65 to 69 age group. The education level in the former group is dominated by apprenticeship or secondary school (71 percent) which is more often connected with jobs with higher physical stress. Of all the additional working population, around 27 percent show health restrictions. An increase in retirement age is partly associated with an extension of active employment, but also with a risk of rising unemployment.