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Incentives, Health, and Retirement - Evidence from a Finnish Pension Reform

Author

Listed:
  • Joonas Ollonqvist

    (Finnish Institute for Health and Welfare)

  • Kaisa Kotakorpi

    (Tampere University, Finnish Centre of Excellence in Tax Systems Research)

  • Mikko Laaksonen

    (Finnish Centre for Pensions)

  • Pekka Martikainen

    (University of Helsinki, Max Planck Institute for Demographic Research, and Max Planck – University of Helsinki Center for Social Inequalities in Population Health)

  • Jukka Pirttilä

    (University of Helsinki, VATT Institute for Economic Research, and Finnish Centre of Excellence in Tax Systems Research)

  • Lasse Tarkiainen

    (University of Helsinki)

Abstract

We analyse the effects of changes in retirement incentives on retirement behaviour, utilising a Finnish pension reform implemented in 2005. The reform generated financial incentives to postpone retirement for some groups of individuals. Using detailed administrative data on individual health, we focus on whether individual reactions to incentives vary according to health status, and analyse whether individuals with poor health are also able to take advantage of the potential monetary benefits associated with the reform. We find that many types of individuals react to retirement incentives, and the reaction does not vary according to health status in a systematic way. Hence there does not seem to be a trade-off between providing incentives to postpone retirement and equal treatment of individuals with different health status.

Suggested Citation

  • Joonas Ollonqvist & Kaisa Kotakorpi & Mikko Laaksonen & Pekka Martikainen & Jukka Pirttilä & Lasse Tarkiainen, 2023. "Incentives, Health, and Retirement - Evidence from a Finnish Pension Reform," Working Papers 11, Finnish Centre of Excellence in Tax Systems Research.
    • Handle: RePEc:fit:wpaper:11
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Pension reform; retirement incentives; health;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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