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Pathways to Retirement and the Role of Financial Incentives in Sweden

Per Johansson (), Lisa Laun () and Mårten Palme ()

No 20123, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study how economic incentives affect labor force exit through different income security programs, old-age pensions as well as income taxes in Sweden. We use the option value for staying in the labor force as a measure of economic incentives and estimate an econometric model for the choice of leaving the labor market. Besides old-age pension, we focus on the Disability Insurance (DI), which is the most important exit path before age 65. By simulating the effect of different probabilities to be admitted DI we show how changes in the stringency of DI admittance affects labor supply among older workers through economic incentives.

JEL-codes: J14 J26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-dem, nep-lab and nep-lma
Date: 2014-05
Note: AG
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Published as Pathways to Retirement and the Role of Financial Incentives in Sweden , Per Johansson, Lisa Laun, Mårten Palme. in Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement , Wise. 2016

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