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Labour supply effects of early retirement provision

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  • Vestad, Ola Lotherington
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    Abstract

    The main objective of this paper is to estimate labour supply effects of an early retirement programme in Norway. Detailed administrative data are employed in order to characterise full paths towards retirement and account for substitution from other exit routes, such as unemployment and disability insurance. By exploiting a reduction in the lower age limit for early retirement as a source of exogenous variation in individual eligibility I obtain robust difference-in-differences and triple differences estimates indicating that more than two out of three pensioners would still be working at the age of 63 had the age limit been 64 rather than 62. Hence, although successful in creating a more dignified exit route for early leavers, the programme also generated substantial costs in terms of inducing others to retire earlier.

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    Bibliographic Info

    Article provided by Elsevier in its journal Labour Economics.

    Volume (Year): 25 (2013)
    Issue (Month): C ()
    Pages: 98-109

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    Handle: RePEc:eee:labeco:v:25:y:2013:i:c:p:98-109

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    Web page: http://www.elsevier.com/locate/labeco

    Related research

    Keywords: Induced retirement; Pension reform; Matched employer–employee register data; Difference-in-differences;

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    1. Karlström, Anders & Palme, Mårten & Svensson, Ingemar, 2008. "The employment effect of stricter rules for eligibility for DI: Evidence from a natural experiment in Sweden," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2071-2082, October.
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    3. Jonathan Gruber & Kevin Milligan & David A. Wise, 2010. "Introduction and Summary," NBER Chapters, in: Social Security Programs and Retirement around the World: The Relationship to Youth Employment, pages 1-45 National Bureau of Economic Research, Inc.
      • Jonathan Gruber & David A. Wise, 2004. "Introduction and Summary," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 1-40 National Bureau of Economic Research, Inc.
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    Cited by:
    1. Staubli, Stefan & Zweimüller, Josef, 2013. "Does raising the early retirement age increase employment of older workers?," Journal of Public Economics, Elsevier, vol. 108(C), pages 17-32.

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