The postponement of the retirement age is linked to an increased risk of early mortality. This idea is emphasized by an update of a Fedea study, already made public in 2022, which states that delaying the exit from the labor market by one year “significantly” increases the risk of dying between the ages of 60 and 69, especially in the most physically demanding sectors and professions and subject to a higher level of emotional and mental stress.
A study by the Foundation for Applied Economic Studies (Fedea) indicates that this risk of early mortality is “much lower” among workers who have access to partial retirement mechanisms that allow them to reduce their working hours after a certain age.
The report draws on an experience generated by the Spanish reform of 1967, in which the early retirement age was modified according to the date on which individuals began contributing to the social security system, thus tightening access to this figure for a subset of cohorts of workers. Specifically, this reform established that those who had started contributing before January 1, 1967 could retire voluntarily from age 60, while the others, with some exceptions, had to wait until age 65.
The authors of the study study the effects of the above-mentioned reform on the age of exit from the labor market and those of the latter on mortality at ages close to retirement. Thus, the study pays particular attention to how the effects on mortality vary according to the characteristics of jobs and the flexibility of the working day.
“The results show that delaying leaving the labour market by one year significantly increases the risk of dying between the ages of 60 and 69. The risk is particularly concentrated in the sectors and especially in the most physically demanding occupations and those subject to a higher level of emotional and mental stress, and is much lower for people who have access to partial retirement mechanisms that allow them to reduce their working hours. from work from a certain age,” the report states.
Based on these results, the authors of the study calculate the social cost or benefit of restricting or eliminating the possibility of early retirement and show that “the negative impact on life expectancy exceeds the tax gains.”
“The tax savings from postponing retirement and reducing the duration of pension payments do not offset the social loss associated with reduced life expectancy, suggesting that the reform is not economically beneficial in the context of broader social welfare,” the study concludes.
For Fedea, the results of this report highlight the need to “carefully” design the details of retirement policies, taking into account their possible effects on workers’ health. Likewise, it recommends introducing, in general, flexible mechanisms for early and partial retirement that allow workers to modulate their working hours in the last part of their professional career.
