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Earnings Distribution and Labour Supply after a Retirement Earnings Test Reform *
Author(s) -
HernæS Erik,
Jia Zhiyang
Publication year - 2013
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/j.1468-0084.2012.00695.x
Subject(s) - earnings , norwegian , economics , margin (machine learning) , distribution (mathematics) , inequality , labour economics , demographic economics , earnings response coefficient , test (biology) , accounting , linguistics , philosophy , mathematics , machine learning , computer science , biology , mathematical analysis , paleontology
Norwegian administrative data are used to evaluate the impact of a doubling of the threshold in the retirement earnings test. We find almost no impact on the extensive margin, but a positive effect on the intensive margin. This positive effect is uneven over the earnings distribution, and concentrated on workers around the threshold, increasing with exposure to the reform and leading to a decrease in earnings inequality. Individuals who remain active until retirement age respond more to the reform. Conditional on prereform earnings, we find little evidence that individual characteristics such as working histories influence the responsiveness to the reform.