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Career breaks, broken pensions? Long-run effects of early and late-career unemployment spells on pension entitlements

2022-04-01Artigo científico Acesso aberto
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dc.contributor.authorBravo, Jorge M.
dc.contributor.authorHerce, Jose A.
dc.contributor.institutionNOVA Information Management School (NOVA IMS)
dc.contributor.institutionInformation Management Research Center (MagIC) - NOVA Information Management School
dc.contributor.pblCambridge University Press
dc.date.accessioned2022-03-16T23:20:52Z
dc.date.available2022-03-16T23:20:52Z
dc.date.issued2022-04-01
dc.descriptionBravo, J. M., & Herce, J. A. (2022). Career breaks, broken pensions? Long-run effects of early and late-career unemployment spells on pension entitlements. Journal of Pension Economics and Finance, 21(2), 191 - 217. [Advanced online publication on 22 July 2020]. Doi: https://doi.org/10.1017/S1474747220000189 ---%ABS2%
dc.description.abstractUnemployment periods and other career breaks have long-term scarring effects on future labour market possibilities, permanently affecting workers' retirement income and standard of living as pensioners. Previous literature has focused on the impact of job loss on working careers with little attention to its impact on pension wealth, particularly the extent to which longevity heterogeneity amplifies unemployment scars. This paper investigates the effect of single and multiple unemployment spells on the lifetime pension entitlements of earnings-related contributory pension schemes, considering the timing and duration of breaks, alternative lifecycle labour earnings profiles, scarring and restoration effects on labour market re-entry, the existence of pension credits and pension accruals for periods spent outside the labour market, longevity heterogeneity, and the accumulation and decumulation redistributive features of the pension scheme. Pension entitlements are estimated using a backward-looking simulation approach based on the actual Portuguese public pension system rules and stylized labour market profiles identified in the SHARE Job Episodes Panel data using a sequence analysis. Longevity heterogeneity is modelled using a stochastic mortality model with a frailty model. Our results show that the timing and duration of unemployment periods is critical, that scarring effects amplify pension wealth losses, that minimum pension provisions, pension credits and pension scheme redistributive features can partially mitigate the impact of unemployment periods on future entitlements, and that the presence of positive correlation between lifetime income and longevity career breaks can amplify the asymmetry in the distribution of pension entitlements across income groups.en
dc.description.versionauthorsversion
dc.description.versionpublished
dc.format.extent26
dc.format.extent969553
dc.identifier.doi10.1017/S1474747220000189
dc.identifier.issn1474-7472
dc.identifier.otherPURE: 26202918
dc.identifier.otherPURE UUID: 0c5b4ca8-1b41-451e-960d-9d1adf678c72
dc.identifier.otherScopus: 85094118313
dc.identifier.otherWOS: 000768751800005
dc.identifier.otherORCID: /0000-0002-7389-5103/work/82893850
dc.identifier.urihttp://hdl.handle.net/10362/134679
dc.identifier.urlhttps://www.scopus.com/pages/publications/85094118313
dc.identifier.urlhttps://www.webofscience.com/wos/woscc/full-record/WOS:000768751800005
dc.language.isoeng
dc.peerreviewedyes
dc.subjectLongevity heterogeneity
dc.subjectPension credits
dc.subjectPension entitlements
dc.subjectRestoration effects
dc.subjectScarring effects
dc.subjectUnemployment breaks
dc.subjectFinance
dc.subjectEconomics and Econometrics
dc.subjectOrganizational Behavior and Human Resource Management
dc.subjectSDG 10 - Reduced Inequalities
dc.subjectSDG 8 - Decent Work and Economic Growth
dc.subjectSDG 5 - Gender Equality
dc.subjectSDG 3 - Good Health and Well-being
dc.subjectSDG 1 - No Poverty
dc.titleCareer breaks, broken pensions? Long-run effects of early and late-career unemployment spells on pension entitlementsen
dc.typejournal article
degois.publication.firstPage191
degois.publication.issue2
degois.publication.lastPage217
degois.publication.titleJournal of Pension Economics and Finance
degois.publication.volume21
dspace.entity.typePublication
rcaap.rightsopenAccess

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