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The Swedish Experience with Pension Reform

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  • Annika Sunde´n

Abstract

Sweden is one of few countries in Europe to have introduced a comprehensive pension reform. In 1998, Sweden passed legislation that transformed its public pension system to a notional defined-contribution (NDC) plan-- that is, a defined-contribution plan financed on a pay-as-you-go basis. In addition, a second tier of funded individual accounts was introduced. The reform had broad political support with more than 80 per cent of the votes in parliament. This paper discusses the trends in retirement in Sweden and assesses the experience with pension reform. The objective was to design a fiscally sustainable system tied to economic growth with a clear link between contributions and benefits. We discuss the challenges in meeting this goal, the extent to which the Swedish reform has succeeded, and how the system affects beneficiaries. The paper evaluates the experience of the individual funded accounts to date and concludes with an outlook for the future. Copyright 2006, Oxford University Press.

Suggested Citation

  • Annika Sunde´n, 2006. "The Swedish Experience with Pension Reform," Oxford Review of Economic Policy, Oxford University Press, vol. 22(1), pages 133-148, Spring.
  • Handle: RePEc:oup:oxford:v:22:y:2006:i:1:p:133-148
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    Cited by:

    1. Sarah Cattan & Daniel A. Kamhöfer & Martin Karlsson & Therese Nilsson, 2017. "The short- and long-term effects of student absence: evidence from Sweden," IFS Working Papers W17/21, Institute for Fiscal Studies.
    2. Blomquist, Sören, 2009. "Public Provision of Private Goods and Nondistortionary Marginal Tax Rates: Some Further Results," Working Paper Series 2009:13, Uppsala University, Department of Economics.
    3. Betermier, Sebastien & Jansson, Thomas & Parlour, Christine & Walden, Johan, 2012. "Hedging labor income risk," Journal of Financial Economics, Elsevier, pages 622-639.
    4. Timothy Smeeding & Eva Sierminska & Andrea Brandolini, 2006. "Cross National Comparison of Income and Wealth Status in Retirement: First Results from the Luxembourg Wealth Study (LWS)," LWS Working papers 2, LIS Cross-National Data Center in Luxembourg.
    5. Eva Sierminska & Andrea Brandolini & Timothy M. Smeeding, 2007. "Cross-National Comparison of Income and Wealth Status in Retirement: First Results From the Luxembourg Wealth Study (LWS)," Working Papers, Center for Retirement Research at Boston College wp2007-03, Center for Retirement Research, revised Feb 2007.
    6. Callan, Tim & Keane, Claire & Walsh, John R., 2009. "Pension Policy: New Evidence on Key Issues," Research Series, Economic and Social Research Institute (ESRI), number RS14.
    7. Cattan, Sarah & Kamhöfer, Daniel A. & Karlsson, Martin & Nilsson, Therese, 2017. "The Short- and Long-Term Effects of Student Absence: Evidence from Sweden," IZA Discussion Papers 10995, Institute for the Study of Labor (IZA).
    8. Bhalotra, Sonia R. & Karlsson, Martin & Nilsson, Therese & Schwarz, Nina, 2016. "Infant Health, Cognitive Performance and Earnings: Evidence from Inception of the Welfare State in Sweden," IZA Discussion Papers 10339, Institute for the Study of Labor (IZA).
    9. Leo Kaas & Philipp Kircher, 2015. "Efficient Firm Dynamics in a Frictional Labor Market," American Economic Review, American Economic Association, pages 3030-3060.
    10. Cattan, Sarah & Kamhofer, Daniel A. & Karlsson, Martin & Nilsson, Therese, 2017. "The Short- and Long-term Effects of Student Absence: Evidence from Sweden," Working Paper Series 1188, Research Institute of Industrial Economics.

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