Population ageing is likely to have a long-lasting negative impact on
the financial sustainability of European pension systems. As a reaction
to this, some European nations have adopted automatic adjustment
mechanisms that connect the amount of starting pensions to the development
of demographic and economic factors, such as life expectancy
and the old-age dependency ratio. Lacking such measures,
other countries account for the financial problems of their public payas-
you-go pension schemes by ad hoc amendments to their national
legislation.
This paper provides empirical evidence that national legislation
linking life expectancy at retirement age and the level of old-age pensions
attenuates opposition against reforms seeking increases to the
statutory retirement age. Using multinomial logit models fitted on individual-
level survey data, I analyze the probability that individuals accept
a potential increase in retirement age among respondents in the Czech
Republic, Poland and Slovakia. The results show that national institutional
contexts explicitly binding pensions to the development of life
expectancy attenuate opposition against a potential increase in the
statutory retirement age.
The implications of the study are of particular importance for policy-
makers looking to resolve the problem of constantly increasing oldage
dependency ratios in Europe. This requires the application of an
incentive structure that increases the acceptability of later withdrawal
from the labour market. Analyzing survey data from the late 2000s,
this study demonstrates that an explicit attachment between the level
of starting pensions and life expectancy at retirement age is particularly
useful in motivating longer working careers when life expectancy
is on the rise.
