Determinants of labour market exit of older workers in the Slovak Republic

The Slovak population is set to age rapidly in the next decades, with significant impacts on economic growth and the sustainability of public finances. At the same time, the labour market exit age in Slovakia is among the lowest in the OECD. We use administrative data for Slovakia between 2013 and 2020 to analyse what factors influence the probability of employment exit of older workers. We find that statutory retirement ages have an important influence on the decision to leave employment. Higher educational attainment is associated with later employment exit, suggesting that the employment rate of older workers is likely to increase in the future as younger generations have higher educational attainment. We also find evidence that workers in sectors that are physically more demanding are exiting employment earlier. Impaired health also leads to significantly earlier employment exits. Finally living in a rural area or in areas with high unemployment is associated with earlier exit from the labour market.