Late-in-life investments in human capital. Evidence from the (unintended) effects of a pension reform

by Simone Chinetti; CeRP WP 207/22

Abstract. This paper provides a novel empirical test of human capital formation by studying whether forced increases in the residual working life, determined by a restrictive pension
reform, induce additional training activities. By exploiting a sizable Italian pension reform, in a Difference-in-Differences setting, I find that a lengthening of the working
horizon increases, through training, workers’ human capital. Additionally, I show that the response to the reform appears very heterogeneous and depends on gender, age,
education, marital status, sector of employment and firm size. My estimates suggest, furthermore, that these individual positive effects are not attributable to employers’ sponsorship.

Published: March 2022