Working Paper: NBER ID: w24593
Authors: Lisa Laun; Märten Palme
Abstract: This paper studies the background to the increase in labor force participation of older workers in Sweden since 2000. In the first part, we study how the characteristics of the elderly have changed with respect to health, education level and work environment, as well as the impact of joint decision-making within the household. In the second part, we study the importance of institutional changes, including a major reform of the old-age pension system, introduction of tax credits for older workers, changes of the mandatory retirement age and stricter eligibility criteria in the disability insurance program. We find that the rise in labor force participation has coincided with improvements in health and educational attainment across birth cohorts as well as increased screening stringency in the disability insurance program.
Keywords: Labor Force Participation; Older Workers; Sweden; Pension Reform; Disability Insurance
JEL Codes: J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Improvements in health (I14) | Increase in labor force participation (J49) |
| Decrease in mortality rates (I14) | Improvements in health (I14) |
| Improvements in self-assessed health measures (I14) | Improvements in health (I14) |
| Enhanced physical ability (I19) | Increase in labor force participation (J49) |
| Rising educational attainment levels (I24) | Later retirements (J26) |
| Educational differences in employment rates (I24) | Increase in labor force participation (J49) |