Scandinavian Working Papers in Economics
Memorandum,
Oslo University, Department of Economics
No 01/2012: Earning Distribution and Labour Supply after a Retirement Earnings Test Reform
Erik Hernæs () and Zhiyang Jia ()
Additional contact information
Erik Hernæs: Frisch Centre for Economic Research, Postal: Gaustadalleen 21 , N-0349 Oslo, Norway
Zhiyang Jia: Statistics Norway,, Postal: Box 8131 Dep , N-0033 Oslo, Norway
Abstract: Norwegian administrative data are used to evaluate the impact of a doubling of the threshold in the retirement earnings test. We find almost no impact on the extensive margin, but a positive effect on the intensive margin. This positive effect is uneven over the earnings distribution, and concentrated on workers around the threshold, increasing with exposure to the reform and leading to a decrease in earnings inequality. Individuals who remain active until retirement age respond more to the reform. Conditional on pre-reform earnings, we find little evidence that individual characteristics such as working histories influence the responsiveness to the reform
Keywords: retirement earnings test; benefit entitlement; labour supply behaviour; heterogeneity
44 pages, February 7, 2012
Full text files
Memo-01-2012.pdf
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