The Boomerang of Female40: Seniority Pensions in Hungary,2011

Abstract

In 2011, the Hungarian government introduced special seniority pensions (Female40): Females, who have accumulated at least 40 years of eligibility (related to the length of contributions), can retire at any age without actuarial benefit reduction. The elimination of other early retirement schemes in 2012 and slowly rising real wages made the policy change even more popular: the lifetime benefit was maximised at the earliest age of retirement. Since 2016, real wages have been growing rather fast; making delayed retirement attractive. Without being noticed by the public at large, Female40 has become a boomerang for its former beneficiaries as immediate retirement from 2014 causes losses rather than gains to the foregoing retirees.

Keywords

public pensions early retirement seniority pensions optimal retirement age

Get full access to this article

View all access options for this article.

References

Ádám

Simonovits

(2018) ‘From Democratic to Authoritarian Populism: Comparing pre- and post-2010 Hungarian Pension Policies’, Acta Oeconomica, 68, forthcoming.

Augusztinovics

Köllő

(2008) ‘Pension Systems and Fragmented Labor Market Careers’, in Gál

R. I.

Iwasaki

Széman

. (eds.) Assessing Intergenerational Equity, Budapest: Akadémiai Kiadó, 154–170.

Benitez-Silva

Demiralp

Liu

(2009) ‘Social Security Literacy and Retirement Well-Being’, Discussion paper, University of Michigan, Ann Arbor, available at: http://www.nber.org/2009rrc/Full/2.2%20Benitez-Silva,%20Demiralp,%20Liu.pdf

Burtless

(1986) ‘Social Security, Unanticipated Benefit Increases and the Timing of Retirement’, Review of Economic Studies, 53, 781–805.

Czeglédi

Simonovits

Szabó

Tir

(2017) ‘What is Wrong with the Hungarian Pension Rules?’, Acta Oeconomica, 67, 359–387.

Domonkos

Simonovits

(2017) ‘Pension Reforms in EU11 Countries: An Evaluation of Post-socialist Pension Policies’, International Social Security Review, 70, 109–128.

Fazekas

Köllő

(eds.) (2017) ‘The Hungarian Labor Market 2017’, Budapest, CERS Institute of Economics, available at: https://www.mtakti.hu/wp-content/uploads/2018/06/HLM2017_onefile.pdf

Granseth

Keck

Nagl

Simonovits

Tir

(2019) ‘Negative Correlation between Retirement Age and Contribution Length?’, Oxford Economic Papers, forthcoming.

Gruber

Wise

(eds.) (2004) ‘Social Security Programs and Retirement around the World: Microestimation’, NBER Conference Report, Chicago, Chicago University Press, available at: https://www.nber.org/papers/w9407.pdf

10.

Laub

(2018) ‘Reduced Retirement Age – Off we Go!?’, Lecture at the Conference of the International Institute of Public Finance, Tampere, Finland.

11.

Lusardi

Mitchell

(2014) ‘The Economic Importance of Financial Literacy: Theory and Evidence’, Journal of Economic Literature, 52, 5–44.

12.

ONYF (Hungarian National Pension Insurance) (2014) ‘Statistical Yearbook 2013’ (in Hungarian), Budapest.

The Boomerang of Female40: Seniority Pensions in Hungary,2011–2018

Abstract

Keywords

Get full access to this article

References