Partial Retirement and Labor Supply: Evidence from Swedish Collective Bargaining Agreements

Emil Bustos

No 1495, Working Paper Series from Research Institute of Industrial Economics

Abstract: Aging populations strain pension systems, prompting policymakers to introduce partial retirement schemes to incentivize workers to retire later. I study the impact of introducing partial retirement within collective bargaining agreements in Sweden’s manufacturing sector in 2013. Merging collective bargaining data with administrative records, I employ a difference-in-differences methodology to analyze the labor market trajectories of eligible and ineligible cohorts around the introduction year. The results reveal a nuanced picture: while eligible workers are more likely to work and claim pension benefits simultaneously, this comes at the expense of a 10% decline in employment rates and a SEK 50,000 reduction in labor earnings. In summary, partial retirement fails to extend working lives, thus undermining its utility as a one-size-fits-all solution to the future of pension systems.

Keywords: Partial Retirement; Pension; Labor Supply (search for similar items in EconPapers)
JEL-codes: D15 J26 J32 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2024-06-26
New Economics Papers: this item is included in nep-age and nep-lma
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