The Impact of a Phased Retirement Program: A Case Study

33 Pages Posted: 21 Jul 2009

See all articles by Marta Lachowska

Marta Lachowska

W.E. Upjohn Institute for Employment Research; Stockholm University - Department of Economics

Annika E. Sundén

Stockholm University - Swedish Institute for Social Research (SOFI)

Eskil Wadensjo

Stockholm University - Swedish Institute for Social Research (SOFI); IZA Institute of Labor Economics; Stockholm University Linnaeus Center for Integration Studies (SULCIS)

Abstract

Phased retirement has been discussed as a means for increasing labour supply for people of older active age. The idea is that instead of leaving a full-time job early for full-time retirement, an employee should reduce the working time either in the same job or by changing jobs, and stay on in the labour market. In this paper we analyze the factors that influence the decision to take up a part-time pension and continue working at the same work place at reduced hours. We do this by using a unique data set from one employer in the governmental sector in Sweden, Stockholm University. The pension scheme is a special part-time pension scheme introduced for state employees in 2003. Employees 61 years and older can apply for a part-time pension up to the age of 65. The employers decide if they will accept or reject the application. They may also encourage employees to apply or discourage them from doing so. We have a data set covering all employees of the age groups who are eligible and a rich data set with information on the employees and also on the units (departments) who in practice decide if an application should be accepted or not. We find that both the effects on pension wealth of taking a part-time pension, and the economic situation of the department are important for the propensity for becoming a part-time pensioner. Also individual characteristics such as gender, age, earnings and occupation are important.

Keywords: part-time work, part-time pension, older workers, labour supply

JEL Classification: H55, J22, J26, J14

Suggested Citation

Lachowska, Marta and Sundén, Annika E. and Wadensjo, Eskil, The Impact of a Phased Retirement Program: A Case Study. IZA Discussion Paper No. 4284, Available at SSRN: https://ssrn.com/abstract=1434618

Marta Lachowska (Contact Author)

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States

HOME PAGE: http://www.upjohn.org/AboutUs/Staff/Lachowska

Stockholm University - Department of Economics ( email )

Stockholm University
Stockholm, 10691
Sweden

HOME PAGE: http://www2.sofi.su.se/~mla/

Annika E. Sundén

Stockholm University - Swedish Institute for Social Research (SOFI) ( email )

Kyrkgatan 43B
SE-106 91 Stockholm
Sweden

Eskil Wadensjo

Stockholm University - Swedish Institute for Social Research (SOFI) ( email )

Universitetsvägen 10F
SE-106 91 Stockholm
Sweden

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Stockholm University Linnaeus Center for Integration Studies (SULCIS) ( email )

SE-106 91 Stockholm
Stockholm
Sweden

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