Working paper

This paper studies the effect on the labor supply decisions of senior workers of reducing the eligibility age of retirement combined with actuarial neutrality, based on one particular group of private sector workers.

In the 2011 Norwegian pension reform they had a fixed pension access age of 67 replaced by a flexible access age from 62 with constant present value of benefits. In a non-linear difference-in-difference approach, exploiting the absence of earnings tests, the authors find no effect on labor force participation. Aggregate earnings fell, mostly driven by high earners reducing their earnings. The results indicated that a reduced access age, holding the overall value of the pension constant, can facilitate such a transition to full retirement.

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