This dissertation aims at increasing our understanding of the driving forces behind old-age labor force participation. For this purpose, several policy treatments that were introduced to address the challenges of demographic aging in Germany are examined. By providing insights into the treatments’ effects on old-age labor market outcomes, this dissertation can derive valid implications for future policies addressing the ongoing demographic aging and its challenges for the statutory pension system and a sufficient labor supply.Each evaluated policy measure and its effects’ analysis constitutes a self-contained section within this dissertation. The first study in section 2 is co-authored with Regina T. Riphahn and analyzes the effect of the unemployment benefit reductions in 2006 on older workers’ employment and unemployment transitions. Section 3 presents the second study that is also co-authored with Regina T. Riphahn. This chapter investigates two reforms of the retirement entry age for the unemployment retirement pathway and their effects on the labor force participation of older workers. The third study in section 4 is single-authored and examines the enforcement of the law on partial retirement and the effects of partial retirement introductions at the firm level on the older employees’ labor market outcomes. In the next sections, I summarize every study briefly and point out their key findings. In section 2, we analyze if the substantial increase in old-age employment observable in Germany from 2000 onwards can be explained by the reduction of unemployment benefit payout durations in 2006. The intensity of the reductions varied by age from 6 months for 45 and 46 years old individuals up to 14 months for individuals aged 58 and older. The outcomes of interest include monthly employment stays, employment exits into unemployment, unemployment stays, and unemployment exits into employment. By using a difference-in-differences approach, we compare changes in employment and unemployment transitions for 45 to 64 year olds who were affected by the shortening to the outcomes of 40 to 44 year olds whose payout duration did not changed. For the 45 to 64 year olds, we observe lower employment exit rates, a higher propensity to stay in employment, a higher propensity for unemployment transitions into employment, and lower probabilities for unemployment stays. A heterogeneity analysis shows stronger responses to the shortening for female labor transitions compared to male transitions. By dividing the sample into education groups, we find that low educated individuals show the strongest response from all education groups in terms of the highest increase in the persistence in employment. Testing the validity of our identification strategy, we provide evidence for causality of our results, except for the unemployment transitions into employment. Several tests confirm the robustness of our results with respect to changes of the sample, estimator, and estimation model specifications. In section 3, we investigate the effects of two reforms that changed eligibility ages to the retirement due to unemployment on older workers’ labor market outcomes. The first reform increased the eligibility age for retirement with full benefits to 65 and introduced the opportunity to enter the retirement pathway at a minimum age of 60 by accepting permanent benefit deductions. The second reform raised this minimum age for retirement with deductions to 63 and thereby limited the access to the retirement pathway. Using a difference-in-difference-in-differences estimation, we compare the outcomes of affected men in certain age months to the outcomes of women not concerned by the reforms of the same age and birth cohort. The results show strong responses of the labor market outcomes to the reforms. For the treated men, we find higher persistence in employment, postponed unemployment entries as well as later entries into old-age retirement. For the first reform, we further observe increased entries into alternative retirement pathways, but since the effect on old-age retirement is stronger, the overall propensity for retirement decreased for the observed 60 to 63 year olds. Our heterogeneity analysis reveals that those birth cohorts that had been most surprised by the reforms respond most strongly. Furthermore, the individuals that had the lowest pension wealth showed the highest increase in the propensity for employment and entries into old-age retirement decreased the most. We provide a placebo test confirming validity of our identification strategy. Additionally, testing robustness with respect to sample variations and model specifications confirms our results. In section 4, I examine the introductions of partial retirement options, i.e. options to reduce working hours at the end of working life, at firm level and their effects on the older employees’ labor market outcomes. The introductions were related to the law on partial retirement that came into force in 1996 and sets the legal framework for partial retirement. Basically, partial retirement can either be designed as a part-time model by which working hours are evenly reduced for the whole time of partial retirement or a block model by which working hours are not reduced in the first phase and reduced to zero in the second phase. Using a difference-in-differences approach, I compare changes in outcomes of workers in firms that introduce partial retirement options and workers in firms not introducing partial retirement. For employees who receive access to the part-time model, I observe an increase in employment stays and a lower propensity for unemployment. I further investigate if full-time employment is crowded out by working part-time in partial retirement and thereby if the overall employment volume may decline. Since I find no indications for a crowding out, the positive employment effect of the part-time model implies an increase in the overall employment volume. Workers using the block model, show no response in employment. Finally, by dividing the sample into three education groups, I find that the least educated workers show the strongest employment effect to the part-time model of partial retirement. Testing on time trends in the outcomes, I provide evidence for the validation of my identification strategy. Several tests confirm robustness of my results to sample variation and the choice of the estimator.
