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A Life Cycle Model of Health and Retirement: The Case of Swedish Pension Reform
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
Stockholm School of Economics.
2015 (English)In: Journal of Public Economics, ISSN 0047-2727, E-ISSN 1879-2316, Vol. 127, 127-136 p.Article in journal (Refereed) Published
Abstract [en]

Sweden is one of the few Western economies to have undertaken a large pension re-form in recent years. This was done with great expectations, but little formal analy-sis. In this paper we develop a life cycle labor supply model to quantify the predictedlabor supply implications of this reform. In our framework, individuals choose whento stop working and, given eligibility criteria, when/if to apply for disability andpension benefits. Agents are heterogeneous in skills and receive exogenous shocksto health throughout their life. We find that the new pension system creates largeincentives for the continued employment of older workers. This is promising newsfor countries grappling with pension reform, and indicates that there are significantlessons to be learned from the Swedish case.

Place, publisher, year, edition, pages
2015. Vol. 127, 127-136 p.
Keyword [en]
Life cycle; Retirement; Pension reform; Disability insurance
National Category
Research subject
URN: urn:nbn:se:uu:diva-211990DOI: 10.1016/j.jpubeco.2013.11.002ISI: 000357904800011OAI: oai:DiVA.org:uu-211990DiVA: diva2:675558
Available from: 2013-12-04 Created: 2013-12-04 Last updated: 2015-08-11Bibliographically approved

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