Pension Reforms in Norway: Evidence from a Structural Dynamic Model

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Pension Reforms in Norway: Evidence from a Structural Dynamic Model

Author Info

Iskhakov, Fedor () (Ragnar Frisch Centre for Economic Research)

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Fedor Iskhakov

Abstract

This paper simulates a set of proposed policies from the Norwegian pension reform within a structural dynamic model of health and retirement estimated on the Norwegian labour market data. The paper focuses on the two main elements of the reform, namely the new pension entitlement accrual rules linking benefits more closely to earnings and the new pension benefit drawing rules designed to eliminate the incentives distortions with respect to the time of retirement. The effects of these proposals are investigated in terms of labour market outcomes, social welfare and income distribution. It is shown that while the proposed pension reform succeeds in urging the older workers to postpone their retirement and induces an increase in total social welfare, individuals in good health who retire early experience a negative change in their discounted utility. In addition, an increase in social welfare is accompanied with an increase in income inequality.

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Publisher Info
Paper provided by Oslo University, Department of Economics in its series Memorandum with number 14/2008.

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Length: 66 pages
Date of creation: 01 Jul 2008
Date of revision:
Handle: RePEc:hhs:osloec:2008_014

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Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Email:
Web page: http://www.oekonomi.uio.no/indexe.html
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Find related papers by JEL classification:
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
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

This paper has been announced in the following NEP Reports:

NEP-AGE-2009-01-31 (Economics of Ageing)
NEP-ALL-2009-01-31 (All new papers)
NEP-LAB-2009-01-31 (Labour Economics)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Iskhakov, Fedor, 2008. "Dynamic Programming Model of Health and Retirement," Memorandum 03/2008, Oslo University, Department of Economics. [Downloadable!]
Bratberg, Espen, 1999. " Disability Retirement in a Welfare State," Scandinavian Journal of Economics, Blackwell Publishing, vol. 101(1), pages 97-114, March. [Downloadable!] (restricted)
Other versions:
- Bratberg, E., 1999. "Disability Retirement in a Welfare State," Norway; Department of Economics, University of Bergen 190, Department of Economics, University of Bergen.
Hiedemann, Bridget, 1998. "A Stackelberg model of Social Security acceptance decisions in dual career households," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 263-278, February. [Downloadable!] (restricted)
Espen Bratberg & Tor Helge Holmås & Øystein Thøgersen, 2004. "Assessing the effects of an early retirement program," Journal of Population Economics, Springer, vol. 17(3), pages 387-408, 08. [Downloadable!] (restricted)
Assar Lindbeck & Mats Persson, 2003. "The Gains from Pension Reform," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 74-112, March.
Other versions:
- Lindbeck, Assar & Persson, Mats, 2002. "The Gains from Pension Reform," Seminar Papers 712, Stockholm University, Institute for International Economic Studies. [Downloadable!]
- Lindbeck, Assar & Persson, Mats, 2002. "The Gains from Pension Reform," Working Paper Series 580, Research Institute of Industrial Economics. [Downloadable!]

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This page was last updated on 2009-11-26.

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