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Pension reforms, liquidity constraints and labour supply responses*

Published online by Cambridge University Press:  18 March 2010

UGO COLOMBINO ,
ERIK HERNÆS ,
MARILENA LOCATELLI  and
STEINAR STRØM
UGO COLOMBINO
Affiliation:
Department of Economics Cognetti De Martiis, via Po 53, Turin, Italy (e-mail: ugo.colombino@unito.it)
ERIK HERNÆS
Affiliation:
The Ragnar Frisch Centre for Economic Research, Gaustadalleen 21, 0349Oslo, Norway (e-mail: erik.hernas@frisch.uio.no)
MARILENA LOCATELLI*
Affiliation:
The Ragnar Frisch Centre for Economic Research and the Department of Economics Cognetti De Martiis, via Po 53, Turin, Italy
STEINAR STRØM*
Affiliation:
The Ragnar Frisch Centre for Economic Research and the Department of Economics Cognetti De Martiis, via Po 53, Turin, Italy
*
(e-mail: marilena.locatelli@unito.it)
(e-mail: steinar.strom@econ.uio.no)
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Abstract

Labour supply responses among older people are estimated on 1996 cross-section register data covering all Norwegians aged 55–68, with an inter-temporal structural model of retirement decisions. Simulations illustrate the impact of introducing flexible pension take-up with actuarial adjustment. With the option of perfect consumption smoothing via the credit market, the reform which comes into effect in Norway from 2011 will reduce the share of retired persons in the age bracket 60–67 (in the base year 15–16%) by around 3 percentage points. With no consumption smoothing, the reduction will be 0.75 percentage points.

Keywords

D10H55J26Retirementinter-temporal interpretationpolicy simulations
Type
Articles
Information
Journal of Pension Economics & Finance , Volume 10 , Issue 1 , January 2011 , pp. 53 - 74
Copyright
Copyright © Cambridge University Press 2010

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Footnotes

*

This article is part of a Strategic programme on retirement, funded by the Norwegian Ministry of Labour and Social Inclusion. Financial support is gratefully acknowledged. The data sets used were received from Statistics Norway, with permission from the Norwegian Data Inspectorate.

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