Pension Reforms in Norway: Evidence from a Structural Dynamic Model
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.
|Date of creation:||01 Jul 2008|
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- Bratberg, E. & Holmas, T.H. & Thogersen, O., 2000.
"Assessing the Effects of Early Retirement Programs,"
Norway; Department of Economics, University of Bergen
0900, Department of Economics, University of Bergen.
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- Lindbeck, Assar & Persson, Mats, 2002.
"The Gains from Pension Reform,"
712, Stockholm University, Institute for International Economic Studies.
- Bratberg, Espen, 1999.
" Disability Retirement in a Welfare State,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 101(1), pages 97-114, March.
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- 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.
- Iskhakov, Fedor, 2008. "Dynamic Programming Model of Health and Retirement," Memorandum 03/2008, Oslo University, Department of Economics.
- 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.
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