A dynamic programming approach to model the retirement behaviour of blue-collar workers in Sweden

Anders Karlstrom, Mårten Palme and Ingemar Svensson
Additional contact information
Anders Karlstrom: Systems Analysis and Economics, Royal Institute of Technology, Stockholm, Sweden, Postal: Systems Analysis and Economics, Royal Institute of Technology, Stockholm, Sweden
Ingemar Svensson: National Social Insurance Board, Stockholm, Sweden, Postal: National Social Insurance Board, Stockholm, Sweden

Journal of Applied Econometrics, 2004, vol. 19, issue 6, 795-807

Abstract: This paper presents an empirical analysis of how Sweden's public old age pension system affects the retirement decision. We focus on male blue-collar workers whose dominant income source as retired comes from the public old age pension system. We develop a dynamic programming model using the rules for the public pension system. In addition to the effects of economic incentives through the pension systems the DP model also measures the effect of the mandatory retirement age of 65-which applies to most parts of Sweden's labour market-on retirement behaviour. The estimated model fits within-sample retirement patterns remarkably well. A simulation of a hypothetical reform, where all retirement incentives in the pension schemes are delayed by three years, shows that economic incentives affect retirement behaviour. Copyright © 2004 John Wiley & Sons, Ltd.

Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
http://hdl.handle.net/10.1002/jae.798 Link to full text; subscription required (text/html)
http://qed.econ.queensu.ca:80/jae/2004-v19.6/ Supporting data files and programs (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jae:japmet:v:19:y:2004:i:6:p:795-807

Ordering information: This journal article can be ordered from
http://www3.intersci ... e.jsp?issn=0883-7252

DOI: 10.1002/jae.798

Access Statistics for this article

Journal of Applied Econometrics is currently edited by M. Hashem Pesaran

More articles in Journal of Applied Econometrics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().