BICEPS/SSE Riga Research Seminar: Partial Retirement and Labor Supply: Quasi-experimental Evidence from Sweden

We are happy to invite you to a BICEPS/SSE Riga research seminar, which will take place on Wednesday, February 5, at 11:30 at SSE Riga, room 611.

We are delighted to welcome Alireza Khoshghadam as the speaker. Alireza is a PhD candidate in Economics at Jönköping International Business School (Sweden), with an M.Sc. in Economic Analysis from Universitat Autònoma de Barcelona. His research interests lie in the fields of labor economics, aging, retirement, and the effects of technological advancements on firm behaviors.

Title: Partial Retirement and Labor Supply: Quasi-experimental Evidence from Sweden 

Time: Wednesday, February 5, 11:30

Venue: SSE Riga, room 611

Abstract

The declining share of the working-age population (20-64) has led many countries to introduce social security reforms to extend the working lives of older employees. While reforms such as raising the early retirement age, are effective, they are often perceived as forced. Partial retirement schemes, which allow individuals to work part-time while receiving a significant portion of their previous wages, offer a more flexible alternative. However, the impact of these schemes on overall labor supply remains ambiguous. On one hand, partial retirement may increase labor supply by encouraging part-time work over early retirement; on the other, it may reduce labor supply if full-time workers choose to shift to part-time work. This paper investigates these effects by studying the introduction of a partial retirement scheme for central government employees aged 61-65 in Sweden. The findings show a 6.5% drop in the average earnings, suggesting that generous partial retirement terms, which replace a substantial share of prior income, incentivize a shift from full-time to part-time work, thereby reducing the overall labor supply.