Pension reforms, particularly those that increase the statutory retirement age, are among the most debated policy measures in ageing societies. They are central to ensuring fiscal sustainability, yet often face public resistance. 

At a virtual presentation on October 29, 2025, organized by the Institute of Public Finance, Hermes Morgavi (OECD, Paris, France) presented his article published in the journal Public Sector Economics on the effects of raising the normal retirement age.

The article proposes a new empirical model to quantify the impact of raising the normal retirement age on employment among older workers across OECD countries. It builds on previous OECD work and introduces several key innovations. Unlike traditional cross-country models, which tend to underestimate the effects of policy, the new model offers a more flexible and realistic tool for assessing pension reforms when micro-level data are unavailable. By bridging the gap between cross-country and country-specific analyses, it offers policymakers a more accurate basis for anticipating the labour market effects of raising retirement ages and for designing reforms that promote both fiscal sustainability and longer working lives.

The results indicate that raising the normal retirement age tends to increase the employment rate of older workers more significantly than previously thought, with the magnitude of the effect varying substantially across countries, depending on demographic structure, private pension coverage, and the presence of early retirement pathways.

Presentation was moderated by Matea Cvjetković, researcher at the Institute of Public Finance.
A recording and a presentation of this interesting lecture are also available.