Examining the Quantile Effects of Retirement on Purchasing Power in Iran with Emphasis on the Statutory Retirement Age
Keywords:
: Retirement Quantiles-General Retirement Age- Purchasing Power- Literacy Rate - Consumer Price IndexAbstract
Given the importance of retirement and its wide-ranging effects on various aspects of individual and social life, a precise understanding of the economic and health dimensions of this life stage is essential. Retirement is not only considered the endpoint of occupational activities but also the beginning of a new phase that requires adaptation to financial changes as well as physical and psychological health conditions. In this context, the present study seeks to comprehensively and rigorously examine the effects of retirement on individuals’ purchasing power and to analyze the impact of this major transition on the physical and mental health status of retirees. Understanding these effects can provide effective guidance for policymakers, families, and retirees themselves in order to facilitate more favorable living conditions during retirement. This study investigates the quantile effects of retirement on purchasing power in Iran, with a particular emphasis on the statutory retirement age. In terms of purpose, this research is applied, and in terms of nature, it is descriptive-analytical, falling within the category of ex post facto studies. Using the quantile regression approach and data spanning from 1990 to 2024, a regression model was estimated based on prior empirical literature. Initially, stationarity tests were conducted to ensure the absence of spurious regression, and the results indicated that the variables are integrated of order one. Subsequently, the Johansen–Juselius cointegration test confirmed the existence of a long-run equilibrium relationship among the variables. The estimation results from the quantile regression model reveal that the retirement index has a negative and statistically significant effect on purchasing power (proxied by per capita income) across all quantiles. The magnitude of this effect begins at lower quantiles (Q25 and Q50) and intensifies as it moves toward higher quantiles (Q75 and Q95). This finding indicates that increases in the retirement age or related structural changes are associated with a decline in purchasing power in Iran, and this effect is more pronounced in higher income deciles, as reflected in the upper quantiles.
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Copyright (c) 2025 Akbar Farzaneh (Author); Reza Rahimi; Hadi Mohammadi Mohammadi, Mohammad Reza Mirzaei Nejad (Author)
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