Reports 2014/19

Labour force participation among older persons after the Norwegian pension reform

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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. Analysis based on data from 2012 shows that the share of the population in employment increased more among those aged 62-64 than those below the age of 62. This report examines whether the share of 62 year-olds in employment in 2013 shows a further growth compared to those who were 62 in 2012. We also examine whether persons aged 63 and older in 2013 show a further growth in employment or if they follow the trend from previous years.

For several years, the shares of the population in employment have had a certain growth for all ages from 60 and over. However, the development from 2011 to 2013 shows stronger growth for those aged 62 and 63 than for the 60-61 year-olds. The aim of the new pension reform was for older employees to remain in the workforce. The development since the introduction of the reform in 2011 indicates that this goal has been achieved, for both women and men. The growth has been particularly strong for employed persons in the private sector with only a compulsory education.

Average contracted working hours per employee aged 62-66 increased marginally between 2010 and 2013. Employees aged 67-70 had a clear increase in average contracted working hours in the same period.

This report includes a chapter discussing whether the public sector pension scheme reduces the number of employees leaving the public sector to work in the private sector. Changing jobs within the central and municipal government does not affect pension rights, as opposed to changing jobs between the public sector and private sector. From other analyses on changing jobs, we know that the share of persons changing jobs decreases by age. This also applies to job changes between sectors. The analysis shows that the decline in job changes is stronger from central and municipal government to the private sector than the decline in job changes within the central and municipal government. This supports our assumption that the lack of coordination between pension schemes in the public and private sectors contributes to reduced mobility in the job market. Clearly, there are also other factors that need to be analysed in order to clarify the effect of pension schemes when people change jobs.

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