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Partial Retirement and Labor Supply: Evidence from Swedish Collective Bargaining Agreements

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  • Bustos, Emil

    (Research Institute of Industrial Economics (IFN))

Abstract

Aging populations strain pension systems, prompting policymakers to introduce partial retirement schemes to incentivize workers to retire later. I study the impact of introducing partial retirement within collective bargaining agreements in Sweden’s manufacturing sector in 2013. Merging collective bargaining data with administrative records, I employ a difference-in-differences methodology to analyze the labor market trajectories of eligible and ineligible cohorts around the introduction year. The results reveal a nuanced picture: while eligible workers are more likely to work and claim pension benefits simultaneously, this comes at the expense of a 10% decline in employment rates and a SEK 50,000 reduction in labor earnings. In summary, partial retirement fails to extend working lives, thus undermining its utility as a one-size-fits-all solution to the future of pension systems.

Suggested Citation

  • Bustos, Emil, 2024. "Partial Retirement and Labor Supply: Evidence from Swedish Collective Bargaining Agreements," Working Paper Series 1495, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1495
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    References listed on IDEAS

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    More about this item

    Keywords

    Partial Retirement; Pension; Labor Supply;
    All these keywords.

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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