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The Impact of Pension Reform on Employment, Retirement and Disability Insurance Claims

Author

Listed:
  • Hernaes, Erik

    (Ragnar Frisch Centre for Economic Research)

  • Markussen, Simen

    (Ragnar Frisch Centre for Economic Research)

  • Piggott, John

    (University of New South Wales)

  • Røed, Knut

    (Ragnar Frisch Centre for Economic Research)

Abstract

We evaluate a comprehensive reform of Norwegian early retirement institutions in 2011 through the lens of a parsimonious random utility choice model. The reform radically changed work incentives and/or pension access-age for some (but not all) workers. We find that improved work incentives caused employment to rise considerably, at the expense of both early retirement and exits through disability insurance. Lower access-age to own pension funds caused a small increase in employment and a large drop in disability program participation. Properly designed pension reforms thus need to take the interplay between old age pension and disability insurance programs into account.

Suggested Citation

  • Hernaes, Erik & Markussen, Simen & Piggott, John & Røed, Knut, 2023. "The Impact of Pension Reform on Employment, Retirement and Disability Insurance Claims," IZA Discussion Papers 16256, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16256
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    References listed on IDEAS

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    1. Lukas Inderbitzin & Stefan Staubli & Josef Zweimüller, 2016. "Extended Unemployment Benefits and Early Retirement: Program Complementarity and Program Substitution," American Economic Journal: Economic Policy, American Economic Association, vol. 8(1), pages 253-288, February.
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    More about this item

    Keywords

    pension reform; disability insurance; program substitution;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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