A Life Cycle Model of Health and Retirement: The Case of Swedish Pension Reform
2015 (English)In: Journal of Public Economics, ISSN 0047-2727, E-ISSN 1879-2316, Vol. 127, 127-136 p.Article in journal (Refereed) Published
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.
Life cycle; Retirement; Pension reform; Disability insurance
Research subject Economics
IdentifiersURN: urn:nbn:se:uu:diva-211990DOI: 10.1016/j.jpubeco.2013.11.002ISI: 000357904800011OAI: oai:DiVA.org:uu-211990DiVA: diva2:675558