Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/106302
Authors: 
Johansson, Per
Laun, Lisa
Palme, Mårten
Year of Publication: 
2014
Series/Report no.: 
Working Paper, IFAU - Institute for Evaluation of Labour Market and Education Policy 2014:20
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.
Subjects: 
disability Insurance
option value
labor market exit
labor supply
JEL: 
H55
J14
J26
Document Type: 
Working Paper

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