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Journal Articles European Journal of Political Economy Year : 2009

Use and misuse of unemployment benefits for early retirement


Unemployment insurance (UI) in some countries is one of the most widely used routes to early retirement. Accordingly, firms lay off elderly workers whose wages exceed their productivity. These workers then receive unemployment benefits until they enter formal retirement, even though they have effectively already exited the labor market. To persuade them into finding the deal acceptable, they quite often may also receive some additional compensation from their employers. In this paper we consider three routes of transition from work to formal retirement that rely on UI: (i) standard unemployment compensation, (ii) public early retirement program yielding benefits higher than the unemployment compensation and (iii) unemployment compensation along with an income supplement provided by the former employer. The study examines under which conditions these three alternative practices can occur.

Dates and versions

halshs-00754351 , version 1 (20-11-2012)



Helmuth Cremer, Jean-Marie Lozachmeur, Pierre Pestieau. Use and misuse of unemployment benefits for early retirement. European Journal of Political Economy, 2009, 25 (2), pp.174-185. ⟨10.1016/j.ejpoleco.2008.09.009⟩. ⟨halshs-00754351⟩
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