Reports 2017/05

Labour force participation among older persons after the Norwegian pension reform. 2016

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A key goal of the Norwegian pension reform of 2011 was for older employees to remain in the workforce. One element of the reform was the opportunity to combine work and pension from the age of 62, without a reduction in pension.

In the years preceding the reform, the share of the population aged 60 and over who were in employment had already seen a degree of growth. However, the development since 2011 shows stronger growth for those aged 62-66 than for 60-61 year-olds. 62-63 year-olds had strong growth in the initial years of the reform, while 64-66 year-olds have shown strong growth in the following years after the reform. The growth has been particularly strong for employees in the private sector without a higher education. Data for 2016 indicates that the effect of the pension reform has come to an end. Only for those 66 years old the employment rate increased somewhat the last year.

The downturn in oil-related business the last couple of years, has given a clear decrease in the share of 61 year-olds who were still working the next year. Other industries in private sector did also experience a downward trend in the share of 61 year-olds who were still working the next year. The share of employees still working the next year has been more stable in public sector.

The new pension reform of 2011 made it easier for those 62 years and older to combine work and receiving payment from general old age pension. In addition the same changes were made in the supplementary pensions system in the private sector (private AFP) to encourage older employees to remain in the workforce. The share of employees combining work and pension showed strong growth after 2010. In the 2nd quarter of 2010, 9 per cent of employees aged 62-66 were combining work with pension, while in the 2nd quarter of 2016, almost half of this age group was combining work and pension. The share of employees who combine work and pension is higher in the private sector than in the public sector due to the change in private AFP. Many more men than women combine work and pension. This is because women have accumulated fewer pension rights and because there are fewer women than men with access to private AFP.

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