Change search
ReferencesLink to record
Permanent link

Direct link
Assessing the welfare change from a pension reform
KTH, School of Architecture and the Built Environment (ABE), Transport Science, Transport and Location Analysis.ORCID iD: 0000-0001-5290-6101
2011 (English)In: International Tax and Public Finance, ISSN 0927-5940, E-ISSN 1573-6970, Vol. 18, no 6, 634-657 p.Article in journal (Refereed) Published
Abstract [en]

We study the welfare implications of a hypothetical reform of the Swedish public pension system where eligibility to pension benefits is delayed by 3 years. Using an option value model, we consider the labor supply responses to the reform and develop a compensating variation (CV) measure to analytically assess the individual welfare changes in a random utility framework. We find that a purely budgetary calculation (neglecting individual labor supply responses) overestimates the welfare loss by more than 65%. We also develop a method for testing between a binary and a multinomial option value model, where the binary one is nested in the multinomial model in a Generalized Extreme Value (GEV) model framework. The binary model cannot be rejected.

Place, publisher, year, edition, pages
2011. Vol. 18, no 6, 634-657 p.
Keyword [en]
Compensating variation measure, Option value model, Random utility, Social security reform
National Category
URN: urn:nbn:se:kth:diva-72815DOI: 10.1007/s10797-011-9178-8ISI: 000300367200002ScopusID: 2-s2.0-80855138718OAI: diva2:488316
QC 20120209Available from: 2012-02-01 Created: 2012-02-01 Last updated: 2012-03-12Bibliographically approved

Open Access in DiVA

No full text

Other links

Publisher's full textScopus

Search in DiVA

By author/editor
Karlström, Anders
By organisation
Transport and Location Analysis
In the same journal
International Tax and Public Finance

Search outside of DiVA

GoogleGoogle Scholar
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Altmetric score

Total: 10 hits
ReferencesLink to record
Permanent link

Direct link