‘Relabelling’ of Individual Early Retirement Pension in Finland: application and behavioural responses using Finnish register data

Ricky Kanabar, Satu Nivalainen , Noora Järnefelt

Research output: Contribution to journalArticlepeer-review

Abstract

Using rich Finnish population level registers, we examine the impact of fusing a flexible early retirement pathway with a more stringent pathway, without changing eligibility conditions, so-called ‘relabelling’, on individual application behaviour. Our findings show that among affected cohorts the likelihood of applying for (successfully claiming) disability-related early retirement declined by 1.8 (1.5) percentage points equivalent to a relative drop of approximately 37 % (39 %) following the reform. Individuals with below tertiary level education and stronger lifetime labour market attachment exhibit a stronger behavioural response to the reform. We find tentative evidence of individual's bringing forward the age at which they substitute to a competing early retirement pathway designed to keep individuals in the labour market albeit on a part time basis. Our findings highlight the importance of targeted awareness building aimed at particular socioeconomic groups such as those with low levels of education when policymakers seek to consolidate early retirement programmes with differing pre-reform eligibility criteria.

Original languageEnglish
Pages (from-to)20-38
Number of pages19
JournalJournal of Economic Behavior and Organization
Volume224
Early online date3 Jun 2024
DOIs
Publication statusE-pub ahead of print - 3 Jun 2024

Data Availability Statement

The data that has been used is confidential.

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