Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/47320
Authors: 
Iskhakov, Fedor
Year of Publication: 
2008
Series/Report no.: 
Memorandum // Department of Economics, University of Oslo 2008,14
Abstract: 
This paper simulates a set of proposed policies from the Norwegian pension reform within a structural dynamic model of health and retirement estimated on the Norwegian labour market data. The paper focuses on the two main elements of the reform, namely the new pension entitlement accrual rules linking benefits more closely to earnings and the new pension benefit drawing rules designed to eliminate the incentives distortions with respect to the time of retirement. The effects of these proposals are investigated in terms of labour market outcomes, social welfare and income distribution. It is shown that while the proposed pension reform succeeds in urging the older workers to postpone their retirement and induces an increase in total social welfare, individuals in good health who retire early experience a negative change in their discounted utility. In addition, an increase in social welfare is accompanied with an increase in income inequality.
Subjects: 
Pension reform
incentive neutral retirement
pension entitlement accrual rules
labour market outcomes
social welfare
income inequality
structural dynamic model
health
retirement
JEL: 
H55
J26
C61
Document Type: 
Working Paper

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