Retirement preferences before and after pension reform: Evidence from a Swedish natural experiment
(English)Manuscript (preprint) (Other academic)
This study examines the change of retirement preferences in the Swedish work force between 2002/2003 (t0) and 2010/2011 (t1). In 2003 a new pension system was introduced in Sweden. A central aim was to postpone retirement. Work incentives were strengthened by linking benefits more closely to the individual’s labour market participation. Also, older workers were given the right to work until age 67 which meant that age 65 was abandoned as the statutory age of retirement.
Drawing on cross-sectional data from the PSAE surveys in t0 and t1, the aim of the paper is to examine how retirement preferences developed between the time when the new system was about to be introduced and a time when it had been set in place. The study design has the character of a natural experiment. The main results show that there was substantial change in how retirement preferences were distributed in the two time-points.
In general, the 55–64 year-olds in t1 preferred to retire later than the same age group did in t0. The share of the older workforce which preferred to retire beyond 65 doubled and the increase was clustered around age 67. Most strikingly, this pattern applies to most sub-categories. Even those who reported poor health and poor work environment preferred to retire later in t1 than the corresponding category did in the preceding time-point. The results indicate that the strengthened work incentives and public campaigns to raise awareness of them have had a general impact on the older workforce in Sweden. The strong increase in age 67 as a preferred exit age indicates that the norm of suitable exit age is being delayed from 65 to 67.
Retirement Retirement preferences Pension reform Ageing
Research subject Sociology
IdentifiersURN: urn:nbn:se:umu:diva-80804OAI: oai:DiVA.org:umu-80804DiVA: diva2:651597
ProjectsPanel Survey of Ageing and the Elderly