What keeps pensioners at work in Russia? Evidence from Household Panel Data

The proportion of working pensioners in Russia is high relative to what is usually observed in several Eastern and Western European countries. In this paper, we present an analysis of the determinants of pensioner employment, using panel data from the on-going Russian Longitudinal Monitoring Survey for the period 1994-99. Given the sharp deterioration in the safety net in recent years, a particular attempt is made to assess the role of inadequate pension benefits, along with other individual, household, and local labour market characteristics, in driving up the employment rate of older people during transition. Both the probability of holding a job and the number of hours worked are modeled. The microeconometric analysis confirms the role that family income and access to alternative coping mechanisms such as subsistence farming play in pensioner employment for women, but also stresses for both men and women the importance of age, education, and health status. Finally, the results show a low sensitivity of pensioner employment to pension arrears and pension benefits, indicating that even the full payment of benefits may be too low to significantly affect the decision to remain in employment.
JEL classification: C33, H55, J14, J21, P36.