Ebb and flow of early retirement: Pension reform and labor market participation of older workers in Spain

Abstract

Generally perceived as a symptom of economic and social progress, early retirement in Spain has long been supported by all relevant actors. However, in recent years-and especially since the great recession-it is widely seen as a problematic phenomenon in need of reversal. To promote active aging and cope with growing social security outlays, the institutional framework has significantly changed in the last decade, including an increase in the statutory pension age from 65 to 67 years and the introduction of a sustainability factor. Still, strong pull factors exist in special agreements in the case of firm downsizing and casuistic legislation affecting specific collectives of workers. Increased use of disability pensions since the onset of the crisis is also evident.