Early retirement provision for elderly displaced workers

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Papers ; No. 985

Classification and Topics

• Classification: Wirtschaft ; Social Security and Public Pensions ; Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs ; Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination ; Retirement; Retirement Policies ; Unemployment Insurance; Severance Pay; Plant Closings
• Subject: early retirement ; job displacement ; labor supply ; benefit substitution ; social security

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kruse, Herman ; Myhre, Andreas
• Event: Veröffentlichung
• (who): Statistics Norway, Research Department
• (where): Oslo
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/268061
• Last update: 10.03.2025, 11:42 AM CET