The Aftermath of Pension Reform on the Retirement Transition – A Longitudinal Analysis of Swedish Income Register 1970-2010

This paper examines the impact of the 1994 pension reform in Sweden on the old worker’s transition into retirement measured by the rate of increase in leisure over age 60-65. The analysis is based on the longitudinal data constructed by linking individuals from Swedish Income Register 1970-2010 and Population and Housing Census. The empirical model is derived from neoclassical lifecycle model, and stresses on the effects of asset income and expectation of future wage and pension benefits on the retirement transition. In addition, the gender and educational differences are examined.