Is Early Retirement Encouraged by the Employer? Labor-Demand Effects of Age-Related Collective Fees
AbstractIn Sweden, employers pay non-wage costs for their workforce in the form of legislated employment tax and collective fees. For parts of the workforce, the collective fees are progressive with respect to the employee’s age and wage. The objective of this paper is to examine how non-wage costs affect voluntary early retirement. To this end we use a large longitudinal employer–employee matched data set with administrative records of the private sector in Sweden. We exploit the variation in collective fee costs across companies to identify employer incentives to encourage early retirement. The results from the instrumental variable estimator suggest that a 1 percentage point increase in non-wage costs in relation to wage costs increases retirement by 6 percent. Further, given the wage sum and workforce structure, large firms spend more on non-wage compensation than small firms. The share of non-wage costs in relation to the wage sum is also positively linked to net employment growth.
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Bibliographic InfoPaper provided by Uppsala University, Department of Economics in its series Working Paper Series, Center for Labor Studies with number 2011:5.
Length: 33 pages
Date of creation: 18 Mar 2011
Date of revision:
Contact details of provider:
Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
More information through EDIRC
Early retirement; non-wage labor costs; pensions; labor demand; collective fees;
Other versions of this item:
- Hallberg, Daniel, 2011. "Is Early Retirement Encouraged by the Employer?: Labor-Demend Effects of Age-Related Collective Fees," Arbetsrapport 2011:6, Institute for Futures Studies.
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-04-02 (Economics of Ageing)
- NEP-ALL-2011-04-02 (All new papers)
- NEP-BEC-2011-04-02 (Business Economics)
- NEP-EUR-2011-04-02 (Microeconomic European Issues)
- NEP-LAB-2011-04-02 (Labour Economics)
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.:
- Cervini-Plá, María & Ramos, Xavi & Silva, José I., 2010.
"Wage Effects of Non-Wage Labour Costs,"
IZA Discussion Papers
4882, Institute for the Study of Labor (IZA).
- Daniel Hallberg & Matias Eklöf, 2010. "Do buy-outs of older workers matter?: Estimating retirement behavior with special early retirement offers," International Journal of Manpower, Emerald Group Publishing, vol. 31(3), pages 337-359, July.
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