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The Impact of a Phased Retirement Program: A Case Study

Author

Listed:
  • Lachowska, Marta

    (Upjohn Institute for Employment Research)

  • Sundén, Annika

    (SOFI, Stockholm University)

  • Wadensjö, Eskil

    (Stockholm University)

Abstract

Phased retirement has been discussed as a means for increasing labour supply for people of older active age. The idea is that instead of leaving a full-time job early for full-time retirement, an employee should reduce the working time either in the same job or by changing jobs, and stay on in the labour market. In this paper we analyze the factors that influence the decision to take up a part-time pension and continue working at the same work place at reduced hours. We do this by using a unique data set from one employer in the governmental sector in Sweden, Stockholm University. The pension scheme is a special part-time pension scheme introduced for state employees in 2003. Employees 61 years and older can apply for a part-time pension up to the age of 65. The employers decide if they will accept or reject the application. They may also encourage employees to apply or discourage them from doing so. We have a data set covering all employees of the age groups who are eligible and a rich data set with information on the employees and also on the units (departments) who in practice decide if an application should be accepted or not. We find that both the effects on pension wealth of taking a part-time pension, and the economic situation of the department are important for the propensity for becoming a part-time pensioner. Also individual characteristics such as gender, age, earnings and occupation are important.

Suggested Citation

  • Lachowska, Marta & Sundén, Annika & Wadensjö, Eskil, 2009. "The Impact of a Phased Retirement Program: A Case Study," IZA Discussion Papers 4284, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4284
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    References listed on IDEAS

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    1. Even, William E. & Macpherson, David A., 2004. "Do Pensions Impede Phased Retirement?," IZA Discussion Papers 1353, Institute of Labor Economics (IZA).
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    5. Steven G. Allen & Robert L. Clark & Linda S. Ghent, 2004. "Phasing into Retirement," ILR Review, Cornell University, ILR School, vol. 58(1), pages 112-127, October.
    6. Tunga Kantarci & Arthur Soest, 2008. "Gradual Retirement: Preferences and Limitations," De Economist, Springer, vol. 156(2), pages 113-144, June.
    7. Steven G. Allen & Robert L. Clark & Linda S. Ghent, 2003. "Phasing Into Retirement," NBER Working Papers 9779, National Bureau of Economic Research, Inc.
    8. Steven G. Allen, 2004. "The Value of Phased Retirement," NBER Working Papers 10531, National Bureau of Economic Research, Inc.
    9. Yung-Ping Chen & John Scott, 2003. "Gradual Retirement: An Additional Option in Work and Retirement," North American Actuarial Journal, Taylor & Francis Journals, vol. 7(3), pages 62-74.
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    Cited by:

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    2. Börsch-Supan, Axel & Bucher-Koenen, Tabea & Kluth, Sebastian & Kutlu Koc, Vesile & Goll, Nicolas, 2015. "Internationale Evidenz zu flexiblen Übergängen in den Ruhestand," MEA discussion paper series 201505, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.

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    More about this item

    Keywords

    part-time work; part-time pension; older workers; labour supply;
    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
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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