Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/268061 
Year of Publication: 
2022
Series/Report no.: 
Discussion Papers No. 985
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
This paper studies the economic effects on re-employment and program substitution behavior among elderly displaced workers who exogenously lose eligibility for their early retirement option. We use detailed Norwegian matched employer-employee data containing information on bankruptcy dates and individual-level wealth, income, pensions and social security benefits. Our empirical strategy employs a regression discontinuity design, as job displacement before a certain age cut-off results in the loss of eligibility for early retirement benefits between ages 62-67 years in Norway. We find that re-employment rates are indistinguishable between workers who just retain eligibility for early retirement benefits and those who just do not. Meanwhile, those who lose eligibility offset 69% of their lost benefits through take-up of other social security benefits, where 51 percentage points comes from disability insurance and 13 percentage points from unemployment insurance. Our findings are particularly policy relevant as tightening of age-limits for old-age pensions is on the agenda in several OECD countries, while current economic hardship throughout the region may lead to increased job displacement for elderly workers.
Subjects: 
early retirement
job displacement
labor supply
benefit substitution
social security
JEL: 
H55
I38
J14
J26
J65
Document Type: 
Working Paper

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