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The rise of working pensioners: the Swedish case

Author

Listed:
  • Flood Lennart
  • Islam Nizamul

    (Professor emeritus previously at School of Business. Economics and Law, University of Gothenburg, Sweden)

Abstract

According to the Eurostat the old-age dependency (people aged 65 or above relative to those aged 15- 64) in the EU will rise from 28% in 2010 to 58% in 2060. During the same period total hours works are projected to fall contributing to a low projected economic growth over the next half-century. In this paper we argue that this gloomy picture might be challenged by an increase in the employment rates of older workers. Using Sweden as an illustration we show that the ratio of individuals with income from both pension and market work has increased strongly during the last decade. During the same period economic reforms have been introduced creating economic incentives in order to delay the exit from the labor market. In this paper we demonstrate the importance of these economic reforms in explaining increased working hours. The paper also evaluates the fiscal impact of the increase in the employment rates.

Suggested Citation

  • Flood Lennart & Islam Nizamul, 2016. "The rise of working pensioners: the Swedish case," Nordic Tax Journal, Sciendo, vol. 2016(1), pages 41-66, May.
    • Handle: RePEc:vrs:notajo:v:2016:y:2016:i:1:p:41-66:n:4
    DOI: 10.1515/ntaxj-2016-0003
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    References listed on IDEAS

    as
    1. Ericson, Peter & Flood, Lennart & Wahlberg, Roger, 2009. "SWEtaxben: A Swedish Tax/benefit Micro Simulation Model and an Evaluation of a Swedish Tax Reform," Working Papers in Economics 346, University of Gothenburg, Department of Economics.
    2. 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.
    3. Puhani, Patrick A., 2012. "The treatment effect, the cross difference, and the interaction term in nonlinear “difference-in-differences” models," Economics Letters, Elsevier, vol. 115(1), pages 85-87.
    4. Jukka Pirttilä & Hakan Selin, 2011. "Tax Policy and Employment: How Does the Swedish System Fare?," CESifo Working Paper Series 3355, CESifo.
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