Working Paper: NBER ID: w25394
Authors: Mårten Palme; Lisa Laun
Abstract: We show how the economic incentives to remain in the labor force induced by Sweden’s public old-age pension system and disability insurance program have changed between 1980 and 2015. Based on earnings histories for different hypothetical individuals corresponding to groups by gender and educational attainments we calculate the following measures: the replacement rate (RR), the social security wealth (SSW), the accrual in the social security wealth from working one additional year as well as the implicit tax rate on working longer (ITAX). We then investigate to what extent the observed changes in these measures concur with changes in employment rates among older workers.
Keywords: Social Security; Retirement Behavior; Sweden; Pension System; Disability Insurance
JEL Codes: J14; J21; J22; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic incentives (M52) | labor force participation (J22) |
| pension system changes (H55) | labor force participation (J22) |
| disability insurance eligibility rules (J14) | labor force participation (J22) |
| pension reform 1999 (H55) | labor force participation (J22) |
| transition rules for old-age pension scheme (H55) | retirement behavior (J26) |
| health improvements (I14) | labor force participation (J22) |