This paper is part of the Frisch Centre project ‘1307 Strategic research programme on pensions’ financed by the Ministry of Labour and Social Inclusion. Data from Statistics Norway have been essential for the project. We thank John Piggott, Oddbjørn Raaum, Knut Røed, Steinar Strøm and two anonymous referees for valuable comments to earlier versions. The usual disclaimer applies.
Earnings Distribution and Labour Supply after a Retirement Earnings Test Reform*
Article first published online: 20 FEB 2012
© Blackwell Publishing Ltd and the Department of Economics, University of Oxford, 2012
Oxford Bulletin of Economics and Statistics
Volume 75, Issue 3, pages 410–434, June 2013
How to Cite
HernæS, E. and Jia, Z. (2013), Earnings Distribution and Labour Supply after a Retirement Earnings Test Reform. Oxford Bulletin of Economics and Statistics, 75: 410–434. doi: 10.1111/j.1468-0084.2012.00695.x
- Issue published online: 12 APR 2013
- Article first published online: 20 FEB 2012
- Final Manuscript Received: January 2012
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 prereform earnings, we find little evidence that individual characteristics such as working histories influence the responsiveness to the reform.