Should we retire earlier in order to look after our parents? The role of immigrants

This paper aims to detect whether or not people could work for more years in the presence of a more flourishing and cheaper formal care market, which, in turn, would provide support for people who are still at work and who have to cope with the care of their elderly parents and relatives. We focus on the ow of immigrants as a key variable in order to detect whether or not this channel is at work. Wedisentangle retirement decisions, rst by modelling retirement choice using a simple life-cycle framework in which caring for parents is introduced into the choice set.We then correlate retirement choice with the gap between the foregone salary if early retirement is chosen and the price of formal care. The findings show that immigrants contribute to the postponement of retirement for women only.According to our estimates, we predict that the increase in immigration rate (equal to 4 percentage points) which occurred over the period 2000-2008 raised the retirement age for Italian women (with parents who are still alive) by almost one year, whilethe impact on men was non-existent.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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