Publication

Winning the Pension Lottery: Old-age Labor Market Responses to an Increase in Pension Wealth

Forfattere: Bonde, Yngvar Gotaas

Publisert: 2024

Sammendrag: This thesis investigates the effects of qualifying for Avtalefestet Pensjon (AFP), a supplementary pension scheme in the Norwegian private sector. When turning 62, eligibility requires a minimum tenure at one or more AFP-covered firms. Using Norwegian administrative data, I identify private sector workers who are just below and just above the tenure threshold, employing a fuzzy Regression Discontinuity Design for analysis. The findings reveal strong responses to AFP eligibility and its corresponding increase in individuals’ pension wealth. This includes significant reductions in hours worked and labor earnings, earlier withdrawals of public pensions, and earlier retirement. Relatively affluent workers predominantly drive the responses. The calculated elasticity of old-age labor supply with respect to pension wealth is -1.68. Contrary to earlier studies, I find only modest evidence of substitution for other social security. Overall, this thesis establishes a clear link between pension wealth and old-age labor supply and demonstrates substantial indirect fiscal costs of the AFP through this channel.

Referanse: Bonde, Yngvar Gotaas, 2024, «Winning the Pension Lottery: Old-age Labor Market Responses to an Increase in Pension Wealth», Andre skrifter, Master in Economics, Stockholm University

Keywords: Pensions; Retirement; Labor Supply; Regression Discontinuity; AFP; Administrative Data

Les fulltekstversjonen av artikkelen

Pensjon Arbeidstid