Incentives, Health, and Retirement: Evidence from a Finnish Pension Reform

Joonas Ollonqvist, Kaisa Kotakorpi, Mikko Laaksonen, Pekka Martikainen, Jukka Pirttilä and Lasse Tarkiainen

No 145, Working Papers from VATT Institute for Economic Research

Abstract: We analyse the effects of changes in retirement incentives on retirement behaviour, and in particular whether individuals' health status modifes the effects of retirement incentives. We study these issues in the context of the Finnish pension reform of 2005, utilising detailed individual-level administrative data on health and retirement behaviour. Our results indicate that changes in economic incentives matter for retirement behaviour. Many types of individuals react to retirement incentives, and the reaction to economic incentives does not appear to vary according to the individuals' health status in a systematic way. Hence there does not seem to be a trade-off between providing incentives to postpone retirement and equal treatment of individuals with different health status.

Keywords: pension reform; retirement incentives; health; Social security; taxation and inequality; H55; J26; Sosiaaliturva (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-age, nep-eur, nep-hea, nep-lma and nep-pbe
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https://www.doria.fi/handle/10024/181547

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Working Paper: Incentives, Health, and Retirement - Evidence from a Finnish Pension Reform (2023)
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