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The Recent Rise of Labor Force Participation of Older Workers in Sweden

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  • Lisa Laun
  • Mårten Palme

Abstract

This paper studies the background to the increase in labor force participation of older workers in Sweden since 2000. In the first part, we study how the characteristics of the elderly have changed with respect to health, education level and work environment, as well as the impact of joint decision-making within the household. In the second part, we study the importance of institutional changes, including a major reform of the old-age pension system, introduction of tax credits for older workers, changes of the mandatory retirement age and stricter eligibility criteria in the disability insurance program. We find that the rise in labor force participation has coincided with improvements in health and educational attainment across birth cohorts as well as increased screening stringency in the disability insurance program.

Suggested Citation

  • Lisa Laun & Mårten Palme, 2018. "The Recent Rise of Labor Force Participation of Older Workers in Sweden," NBER Working Papers 24593, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:24593
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    References listed on IDEAS

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    1. Laun, Lisa, 2012. "The E ffect of Age-Targeted Tax Credits on Retirement Behavior," Research Papers in Economics 2012:14, Stockholm University, Department of Economics.
    2. David A. Wise, 2012. "Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participation and Reforms," NBER Books, National Bureau of Economic Research, Inc, number wise11-1.
    3. David A. Wise, 2017. "Social Security Programs and Retirement around the World: The Capacity to Work at Older Ages," NBER Books, National Bureau of Economic Research, Inc, number wise-22.
    4. Per Johansson & Lisa Laun & Mårten Palme, 2014. "Pathways to Retirement and the Role of Financial Incentives in Sweden," NBER Chapters, in: Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement, pages 369-410, National Bureau of Economic Research, Inc.
    5. Håkan Selin, 2017. "What happens to the husband’s retirement decision when the wife’s retirement incentives change?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(3), pages 432-458, June.
    6. Tammy Schirle, 2008. "Why Have the Labor Force Participation Rates of Older Men Increased since the Mid-1990s?," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 549-594, October.
    7. Venti, Steven & Wise, David A., 2015. "The long reach of education: Early retirement," The Journal of the Economics of Ageing, Elsevier, vol. 6(C), pages 133-148.
    8. Per Johansson & Lisa Laun & Mårten Palme, 2017. "Health, Work Capacity, and Retirement in Sweden," NBER Chapters, in: Social Security Programs and Retirement around the World: The Capacity to Work at Older Ages, pages 301-327, National Bureau of Economic Research, Inc.
    9. Laun, Tobias & Wallenius, Johanna, 2015. "A life cycle model of health and retirement: The case of Swedish pension reform," Journal of Public Economics, Elsevier, vol. 127(C), pages 127-136.
    10. Laun, Lisa, 2017. "The effect of age-targeted tax credits on labor force participation of older workers," Journal of Public Economics, Elsevier, vol. 152(C), pages 102-118.
    11. Gustman, Alan L & Steinmeier, Thomas L, 2000. "Retirement in Dual-Career Families: A Structural Model," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 503-545, July.
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    Cited by:

    1. Johannes Hagen, 2018. "The effects of increasing the normal retirement age on health care utilization and mortality," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(1), pages 193-234, January.
    2. Walwei, Ulrich & Deller, Jürgen, 2021. "Labor Market Participation of Older Workers in International Comparison," IAB-Discussion Paper 202116, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Mårten Palme & Lisa Laun, 2018. "Social Security Reforms and the Changing Retirement Behavior in Sweden," NBER Chapters, in: Social Security Programs and Retirement around the World: Reforms and Retirement Incentives, pages 373-395, National Bureau of Economic Research, Inc.
    4. Haodong Qi & Kirk Scott & Tommy Bengtsson, 2019. "Extending working life: experiences from Sweden, 1981–2011," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 17(1), pages 099-120.
    5. Dean Hyslop & Amy Rice & Hayden Skilling, 2019. "Understanding labour market developments in New Zealand, 1986-2017," Reserve Bank of New Zealand Discussion Paper Series DP2019/02, Reserve Bank of New Zealand.
    6. Forslund, Anders, 2019. "Employment outcomes and policies in Sweden during recent decades," Working Paper Series 2019:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. Ulrich Walwei & Jürgen Deller, 2021. "Labour Market Participation of Older Workers: Drivers and Obstacles," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 56(6), pages 341-347, November.

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    More about this item

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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