Special Research Topic
Demographic Change

Project: The Effects of Social Security Incentives on Labor Force Participation of Older Workers

Project Duration

04/2016 - 03/2018 (finalized)

Commissioned by

Fritz Thyssen Stiftung

Project Team (RWI)

Dr. Matthias Giesecke (Chief)


Prof. Dr. Andrea Weber (Central European University)


Demographic change is a challenge for the German labor market. As many industrialized countries, Germany is confronted with an aging population due to increasing life expectancy and low birth rates. Despite extensive research and several public debates about specific policy measures only little is known about the joint effect of financial incentives from the German public pension system and the unemployment insurance. We intend to fill this research gap by providing a profound empirical analysis about the effects of social security incentives on the labor force participation of older workers. Our aim is to derive corresponding policy conclusions from the results. The project has two research questions. First, we investigate potential effects of financial incentives from the pension insurance on labor supply of older workers. Second, we analyze whether this relationship interferes to coexisting alternatives from the unemployment insurance. Examining the substitution of benefit programs yields valuable insights to strengthen the labor market and retirement security against an aging population.