Pension Reform in Norway. Microsimulating effects on government expenditures, labour supply incentives and benefit distribution
AbstractA much higher old-age dependency ratio, together with more generous pension benefits, will lead to a substantial increase in the future public pension expenditures burden in Norway. A pension reform implemented from 2010 will imply a shift to a quasi-actuarial system, seeking to neutralise the expenditure effect of further growth in life expectancy and strengthen ties between former earnings and pension benefits. Labour supply will be stimulated by lowering implicit tax rates and by aligning the social and private costs of early retirement. Using a large dynamic microsimulation model we find that the reform will stimulate labour supply and reduce the future tax burden, but also increase inequality in the benefits received by old age pensioners.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 524.
Date of creation: Dec 2007
Date of revision:
Pension reform; social security; retirement; pension expenditures;
Find related papers by JEL classification:
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- 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-2007-12-08 (Economics of Ageing)
- NEP-ALL-2007-12-08 (All new papers)
- NEP-EEC-2007-12-08 (European Economics)
- NEP-PBE-2007-12-08 (Public Economics)
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