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Incentives, Health, and Retirement: Evidence From a Finnish Pension Reform

Year: 2024
Type: article
Study design: Observational Study
Abstract: This paper examines, using exogenous variation generated by a Finnish pension reform implemented in 2005, the interplay between health and financial incentives to postpone retirement. Based on detailed administrative data on individual health and retirement behavior, we focus on whether individual reactions to incentives vary according to health status and analyze whether individuals with ill health are also able to take advantage of the potential monetary benefits of delayed retirement created by the reform. We find that on average, individuals react to the financial incentives created by the reform as expected. This result holds for most of the health-related subgroups we analyze. However, those with a long period of sickness absence are less likely to respond to changes in the financial incentives to postpone retirement.
DOI: 10.1002/hec.4917
Authors: Joonas Ollonqvist, Kaisa Kotakorpi, Mikko Laaksonen, Pekka Martikainen, Jukka Pirttilä, Lasse Tarkiainen
Institutions: Finnish Institute for Health and Welfare, Tampere University, Finnish Centre for Pensions, University of Helsinki, Max Planck Institute for Demographic Research, VATT Institute for Economic Research
Language: English
Subfield: Demography
Open Access status: hybrid
Estimated APC paid: $3,860
Funders: Helsingin Yliopisto, Yrjö Jahnssonin Säätiö, European Commission, Jane ja Aatos Erkon Säätiö, Max-Planck-Gesellschaft, Turun Yliopisto, Strategic Research Council
Awards: G1159421748, G1317472089, G434337789, G58785024, G6142563283, G763117059
OpenAlex ID: W4405764272
FWCI: 2.573
Cites: 29
Cited by: 3
Related to: 10