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Labour Supply Effects of an Early Retirement Programme

Author

Listed:
  • Brinch, Christian

    () (Ragnar Frisch Centre for Economic Research)

  • Hernæs, Erik

    () (Ragnar Frisch Centre for Economic Research)

  • Strøm, Steinar

    () (Dept. of Economics, University of Oslo)

Abstract

In 1989, an early retirement program (AFP) was introduced in Norway, with an eligibility age gradually decreasing from 66 to 62, and now covering about two thirds of the labour force. To assess the impact on the labour force we estimate a multinomial logit model for transitions between labour market states on quarterly panel data for 1988-II to 1999-IV. The estimated model tracks the development in transition rates and labour force quite well. Model simulations indicate that abolishing the AFP might increase the total labour force by almost two per cent in five years.

Suggested Citation

  • Brinch, Christian & Hernæs, Erik & Strøm, Steinar, 2002. "Labour Supply Effects of an Early Retirement Programme," Memorandum 33/2001, Oslo University, Department of Economics.
  • Handle: RePEc:hhs:osloec:2001_033
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    File URL: http://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2001/Memo-33-2001.pdf
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    References listed on IDEAS

    as
    1. Bratberg, E. & Holmas, T.H. & Thogersen, O., 2000. "Assessing the Effects of Early Retirement Programs," Papers 4/2000, Norwegian School of Economics and Business Administration-.
    2. Erik Hernæs & Steinar Strøm, 2000. "Family labour supply when the husband is eligible for early retirement," ICER Working Papers 04-2000, ICER - International Centre for Economic Research.
    3. Lumsdaine, Robin L. & Mitchell, Olivia S., 1999. "New developments in the economic analysis of retirement," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 49, pages 3261-3307 Elsevier.
    4. Hernaes, Erik & Sollie, Marte & Strom, Steinar, 2000. " Early Retirement and Economic Incentives," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 481-502, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. David Kocourek & Filip Pertold, 2011. "The Impact of Early Retirement Incentives on Labor Market Participation: Evidence from a Parametric Change in the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 61(5), pages 467-483, November.
    2. Iskhakov, Fedor, 2003. "Quasi-dynamic forward-looking model for joint household retirement decision under AFP scheme," Memorandum 28/2003, Oslo University, Department of Economics.
    3. Robert Fenge & Silke Uebelmesser & Martin Werding, 2006. "On the Optimal Timing of Implicit Social Security Taxes Over the Life Cycle," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(1), pages 68-107, March.
    4. Erling Holmøy & Kyrre Stensnes, 2008. "Will the Norwegian pension reform reach its goals? An integrated micro-macro assessment," Discussion Papers 557, Statistics Norway, Research Department.
    5. Robert Fenge & Silke Übelmesser & Martin Werding, 2002. "Second-best Properties of Implicit Social Security Taxes: Theory and Empirical Evidence," CESifo Working Paper Series 743, CESifo Group Munich.
    6. Ashok Thomas & Luca Spataro, 2013. "Pension funds and Market Efficiency: A review," Discussion Papers 2013/164, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    7. Dennis Fredriksen & Erling Holmøy & Birger Strøm & Nils Martin Stølen, 2015. "Fiscal effects of the Norwegian pension reform. A micro-macro assessment," Discussion Papers 821, Statistics Norway, Research Department.
    8. David Kocourek & Filip Pertold, 2009. "Impact of Early Retirement Incentives on Labour Market Participation: Evidence from a Parametric Change in the Czech Republic," Working Papers 2009/7, Czech National Bank, Research Department.
    9. Nordberg, Morten, 2007. "The Total Tax on Labour Income," Memorandum 05/2007, Oslo University, Department of Economics.

    More about this item

    Keywords

    Early retirement; panel data; econometric models;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • 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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