Social Security Reforms and the Changing Retirement Behavior in Sweden

Palme, Mårten; Laun, Lisa

doi:10.3386/w25394

Cited by 4 publications

(4 citation statements)

References 7 publications

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“…Overall, however, the 1998 pension reform in Sweden shows that increasing pension eligibility and recurring to a NDC plan, based on pay-as-you-go contributions, is effective in boosting occupational activity during old age. This is line with the findings by Palme and Laun (2018) on the economic incentives produced by the pre-reform old-age pensions of the 1980s, as well as the delay in retirement observed by Glans (2008) in the period 1999-2003 in the country. On the other hand, our analysis departs from the conclusions of Laun et al (2019) for Norway.…”

Section: Discussionsupporting

confidence: 92%

The value of pension reforms for late working life: evidence from Sweden

Focacci

Öylü

Motel-Klingebiel

et al. 2023

IJSSP

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PurposeDriven by the aim to increase the participation of older people in the labour force and to extend people's working lives, the Swedish Parliament passed a bill in 1998 to increase the pension eligibility age from 60 to 61 years and establish a notional defined-contribution (NDC) plan. In this article, the authors investigate the impacts towards the prolongation of working lives expected from such an intervention.Design/methodology/approachThe authors apply a multinomial probabilistic model based on Swedish registry data on the birth cohorts 1937–1938 (n = 102,826) and observe differences in exit behaviour between eligible and non-eligible individuals.FindingsThe authors find that the cohorts eligible to the pension reform exit the labour market at a later age compared to non-eligible cohorts at the 61-years cut-off. The authors also find that the effect persists in the long term. Furthermore, the authors find that both men and women are equally struck by the reform.Originality/valueWhile there exist many descriptive reports and theoretical analyses on the costs and benefits of pension reforms, this study is the first one to empirically analyse the effect of the first European NDC pay-as-you go pension plan on the potential exclusion of old-aged workers.

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Section: Discussionsupporting

confidence: 92%

The value of pension reforms for late working life: evidence from Sweden

Focacci

Öylü

Motel-Klingebiel

et al. 2023

IJSSP

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“…The Swedish pension and social security systems underwent major changes in the 1990s and 2000s to extend individuals' working lives and increase the participation of older workers (Palme & Laun, 2018). A major change came in 1998, when the generous universal and earningsrelated pensions were replaced by a notional defined contribution scheme (NDC) (Barr, 2013;Laun & Palme, 2020).…”

Section: Late Work In Swedenmentioning

confidence: 99%

Inequalities and Age-Related Disadvantages in Late Working Life and Labour Market Exit in Sweden

Öylü

2023

Linköping Studies in Arts and Sciences

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The participation of older individuals in the labour market has increased as a result of recent demographic and societal shifts, as well as reforms of pension and social security systems. However, employment inequalities in late working life and labour market exit persist. Early exit from the labour market affects the sustainability of public finances and the availability of skilled labour, as well as the financial, social, mental, and physical well-being of individuals. So far, the literature on employment in late working life and labour market exit has mainly focused on individual choices. However, employment and exit in late working life are complex phenomena that depend on a variety of factors, such as individual life courses and labour market conditions. Based on Swedish register data, this thesis examines inequalities in employment and labour market exit among people aged 55 and over in Sweden, and the role of life course and age-related labour market disadvantages, including studies on: inequalities and diversity between gender and educational groups (Study 1); the relationship between mid-life labour market attachment and patterns of labour market exit (Study 2); agerelated disadvantages in unemployment risk and re-employment chances (Study 3); and the link between older workers' hiring chances and the characteristics and labour market conditions of employers (Study 4). Study 1 shows that employment trajectories, including the receipt of pension, unemployment and disability benefits, are structured by gender and education. While women tend to exit the labour market earlier than men and are more likely to receive disability benefits, men are more likely to move into self-employment or to receive unemployment benefits. Study 2 demonstrates that individuals with low labour market attachment early (at age 30) or late (at age 50-59) in their working careers are more likely to exit the labour market early, while low labour market attachment in mid-career (at age 40-49) is linked with later labour market exit. However, low labour market attachment in all career stages is associated with the receipt of work-related benefits in the First of all, I would like to thank my main supervisor Andreas Motel-Klingebiel for your exceptional guidance, inspiring comments, encouragement, and patience throughout my PhD process. Your mentorship, excellent knowledge, constructive advice, and perspectives helped me to grow academically and have been invaluable for my PhD work. I would also like to thank my co-supervisor, Susanne Kelfve, for your constant support and encouragement, for always taking the time to help me, your brilliant solutions, empowerment, and positivity throughout my PhD time. I have been very lucky to have had such excellent supervisors during this journey, special thanks to both of you! I also wish to thank my esteemed co-authors, Chiara Natalie Focacci and Luis Serratos-Sotelo, for excellent research collaboration, for your helpful comments, and significant contributions. Furthermore, I would like to thank al...

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“…The 1999/2003 reform apparently did little to motivate people to make up for the reductions in their pension benefit caused by life expectancy by working beyond the longstanding pensionable age of 65 (see Palme, 2018Palme, , 2019. This led to the establishment of a government inquiry on the pension age in 2010.…”

Section: Poor Exit Age Increase Leads Sweden To Link Pensionable Ages...mentioning

confidence: 99%

Regulating the retirement age—Lessons from Nordic pension policy approaches

Nordheim

Kvist

2022

Regulation & Governance

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The likelihood that longevity will continue to increase has generated a search for regulation that make people work longer as they live longer, and thus not just containing pension expenditure but also enlarging labor supply, economic growth, and tax revenue. In public pension policy, Nordic countries have led the world with three types of approaches aimed at making people retire later. The first came when Sweden, followed by Finland and Norway, installed life expectancy coefficients in benefit calculation formulas. The second followed as Finland introduced age-related accrual rates and the third when Denmark indexed the pensionable age to developments in life expectancy. Since economic incentive-based regulations failed to raise exit ages sufficiently, Finland and Sweden subsequently linked pensionable ages to life expectancy like Denmark. While this policy brings out inequalities in health and workability, the fact that countries found it necessary to index the pensionable age to longevity instead of just relying on economic incentives in regulating retirement behavior may hold lessons for other countries.

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Social Security Reforms and the Changing Retirement Behavior in Sweden

Cited by 4 publications

References 7 publications

The value of pension reforms for late working life: evidence from Sweden

The value of pension reforms for late working life: evidence from Sweden

Inequalities and Age-Related Disadvantages in Late Working Life and Labour Market Exit in Sweden

Regulating the retirement age—Lessons from Nordic pension policy approaches

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