Changes in pension take-up and retirement in the context of increasing the pension age: the case of Estonia in the 2000s

This article looks into the effects of increasing the statutory pension age on pension take-up and on employment before and after pension take-up in Estonia in 2002–11. We use individual-level administrative data from the pension register of the Estonian National Social Insurance Board and a set of analytical indicators to capture the pension take-up and employment exit processes. The results reveal a relatively successful adjustment to the increase in pension age. The age gap between take-up of normal and early retirement (old-age) pension has not widened and the increase in the statutory pension age has moved exit from employment proportionally towards a later age. At the same time, a marked increase in the take-up of incapacity pensions, accelerated during the economic recession, has significantly reduced the overall effect of pension age reform.