Earnings Distribution and Labour Supply after a Retirement Earnings Test Reform

25 Pages Posted: 13 Apr 2013

See all articles by Erik Hernæs

Erik Hernæs

University of Oslo - Ragnar Frisch Centre for Economic Research

Zhiyang Jia

Statistics Norway

Date Written: June 2013

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 prereform earnings, we find little evidence that individual characteristics such as working histories influence the responsiveness to the reform.

JEL Classification: J14, H55

Suggested Citation

Hernæs, Erik and Jia, Zhiyang, Earnings Distribution and Labour Supply after a Retirement Earnings Test Reform (June 2013). Oxford Bulletin of Economics and Statistics, Vol. 75, Issue 3, pp. 410-434, 2013. Available at SSRN: https://ssrn.com/abstract=2250253 or http://dx.doi.org/10.1111/j.1468-0084.2012.00695.x

Erik Hernæs (Contact Author)

University of Oslo - Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0317 Oslo
Norway

Zhiyang Jia

Statistics Norway ( email )

N-0033 Oslo
Norway

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