Towards an Actuarially Fair Pension System in Norway
In order to estimate labour supply responses among older people we have employed a very simple model of retirement decisions that can be estimated on a single cross-section sample, and still be given a structural interpretation in terms of inter-temporal decisions. The model is estimated on Norwegian register data from 1996, which covers all Norwegians aged 55-68 in 1996. The empirical model is employed to assess the impact on retirement of moving the Norwegian pension system towards actuarial fairness. Future annual pension benefits are increased if retirement is postponed say, for one year. In one of the simulations future annual benefits are increased by NOK 8,000 (as of April 2009 1 Euro~ NOK 8.7), which is around 5 per cent of the average pension benefit in 1996 and corresponds approximately to the adjustment in the new pension system which comes into effect 1. January 2011. The number of men and women choosing retirement is reduced by around 5 per cent, given that there is no consumption smoothing. When perfect consumption smoothing is assumed the reduction is much larger; 18 per cent in the case of men and 14 per cent in the case of women. These reductions are really sizeable and indicate that pension reforms, combined with removing constraints in the credit market, may be of great importance in giving the individuals incentive to prolong their working life.
|Date of creation:||19 Apr 2009|
|Contact details of provider:|| Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway|
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
More information through EDIRC
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.:
- Hærnes, Erik & Jia, Zhiyang & Strøm, Steinar, 2005.
"Retirement in Non-Cooperative and Cooperative Families,"
15/2006, Oslo University, Department of Economics.
- Erik HernÃ¦s & Zhiyang Jia & Steinar StrÃ¸m, 2007. "Retirement in Non-Cooperative and Cooperative Families," Chapters, in: Ageing and the Labor Market in Japan, chapter 7 Edward Elgar Publishing.
- Erik Hernæs & Zhiyang Jia & Steinar Strøm, 2001. "Retirement in Non-Cooperative and Cooperative Families," CESifo Working Paper Series 476, CESifo Group Munich.
- Steinar StrØm & John K. Dagsvik, 2006.
"Sectoral labour supply, choice restrictions and functional form,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 21(6), pages 803-826.
- John K. Dagsvik & Steinar Strøm, 2004. "Sectoral Labor Supply, Choice Restrictions and Functional Form," Discussion Papers 388, Statistics Norway, Research Department.
- Dagsvik, John K. & Strøm, Steinar, 2004. "Sectoral labor supply, choice restrictions and functional form," Memorandum 13/2004, Oslo University, Department of Economics.
- Aaberge, Rolf & Colombino, Ugo & Strom, Steinar, 1999. "Labour Supply in Italy: An Empirical Analysis of Joint Household Decisions, with Taxes and Quantity Constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(4), pages 403-422, July-Aug..
- Burtless, Gary & Moffitt, Robert A, 1985. "The Joint Choice of Retirement Age and Postretirement Hours of Work," Journal of Labor Economics, University of Chicago Press, vol. 3(2), pages 209-236, April.
- Ugo Colombino, 2003. "A Simple Intertemporal Model of Retirement Estimated On Italian Cross-Section Data," LABOUR, CEIS, vol. 17(SpecialIs), pages 115-137, 08.
When requesting a correction, please mention this item's handle: RePEc:hhs:osloec:2009_009. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Magnus Gabriel Aase)
If references are entirely missing, you can add them using this form.