Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2015:8: Health, Work Capacity and Retirement in Sweden

Per Johansson (), Lisa Laun () and Marten Palme ()
Additional contact information
Per Johansson: Uppsala University, Postal: Department of Statistics, Uppsala University, Box 513, 751 20 Uppsala, Sweden
Lisa Laun: Institute for Evaluation of Labor Market and Education Policy (IFAU), Postal: Kyrkogårdsgatan 6, 753 12 Uppsala, Sweden
Marten Palme: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden

Abstract: Following an era of a development towards earlier retirement, there has been a reversed trend to later exit from the labor market in Sweden since the late 1990s. We investigate whether or not there are potentials, with respect to health and work capacity of the population, for extending this trend further. We use two different methods. First, the Milligan and Wise (2012) method, which calculates how much people would participate in the labor force at a constant mortality rate. Second, the Cutler et al. (2012) method, which asks how much people would participate in the labor force if they would work as much as the age group 50-54 at a particular level of health. We also provide evidence on the development of self-assessed health and health inequality in the Swedish population.

Keywords: SHARE; Health inequality

JEL-codes: I10; J26

37 pages, November 15, 2015

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