We explore the importance and nature of elderly couples' labor market interlinkages, and how such linkages shape the response to welfare reforms. To this end, we develop a life-cycle model featuring dual-earner households with heterogeneous age gaps, non-separable leisure preferences, and endogenous retirement. To inform key preference parameters, our calibration exploits quasi-experimental evidence of spousal retirement spillovers from a pension reform in Norway. We show that the experimental evidence is highly informative about the degree of non-separability of leisure and that a substantial level of complementarity is required to match the data. Using our calibrated model, we find that the commonly observed tendency of couples to retire together, despite considerable age-gap heterogeneity, can be entirely explained by leisure complementarities. Moreover, comparing to a model with leisure separability reveals that one-third of the long-run labor supply effect of the pension reform is attributed to complementarity. This illustrates the importance of accounting for interdependent decisions when evaluating policy reforms.
This paper examines the effects of providing early retirement (ER) benefits to displaced workers with limited labor market opportunities at old age. An age-cutoff in eligibility for ER benefits in Norway, which we exploit using a regression discontinuity design, facilitates our study. We utilize detailed Norwegian matched employer–employee data containing information on bankruptcies occurring between 2001–2010 to identify job displacements, along with data on individual income, wealth, pensions, and social security benefits to examine behavioral effects of ER provision and the associated implications for welfare and policy. While we are unable to detect any distortionary effect on labor supply, we detect that those who lose ER eligibility substitute 69 percent of their lost benefits through uptake of other social security benefits, with 51 percentage points attributed to disability insurance and 13 percentage points to unemployment insurance. Applying the Baily–Chetty formula for optimal social security, we show that ER provision is a suboptimal policy.
In this paper, we examine the substitution between pension wealth and household saving. To identify the effect of reductions in social security pension wealth on household saving, we utilize variations in changes in social security pension wealth induced by Norway's 2011 reform across different cohorts, time periods, and sectors. Our study focuses on the saving behaviors of individuals between the ages of 57 and 61, and we find that the annual saving rate increased by around 1.4 percentage points after the reform. When considering the overall life-cycle changes in household saving, this corresponds to a crowd-out effect of about 50 percent of the total loss in pension wealth.
In this paper, I examine leisure complementarities in the joint retirement decisions of couples by quantifying the effect of the 2011 Norwegian pension reform. The reform abolished an earnings test on early retirement benefits for private-sector workers, but not for public-sector workers. I analyze population-wide registry data on labor market participation, and I consider couples where the focal partner works in the public sector with a spouse employed either in the private sector (treatment group) or the public sector (control group). I find that spousal spillovers account for over 40 percent of the aggregate employment effect for women. They claim fewer early retirement benefits, and both men and women pay additional labor income taxes. In total, government budgets improved by approximately $46 million as a result of the spousal spillover effect between 2012 and 2015.
Dynamic Age Limits in a NDC Pension System
Herman Kruse, Statistics Norway, 2025
Long term projections of pension adequacy in a selection of countries
Gijs Dekkers, Elin Halvorsen, Herman Kruse, Nataša Kump, Marek Suchomel and Karel Van den Bosch, European Commission: Directorate-General for Employment, Social Affairs and Inclusion, Publications Office of the European Union, 2024
https://data.europa.eu/doi/10.2767/463317
Welfare Effects of Pension Reforms
Zhiyang Jia, Herman Kruse and Trond C. Vigtel, Statistics Norway Discussion Papers no. 1025, 2 July 2025
Hvordan definere «minstepensjonist» i ny folketrygd?
Elin Halvorsen, Herman Kruse and Andreas Myhre, SSB Rapporter 2025/27
Herman Kruse, SSB Rapporter 2025/2
Pensjonssystemet - hvor skal vi?
Økonomiske analyser 1/2024
Sannsynlighet for tidliguttak av alderspensjon i MOSART
Dennis Fredriksen, Elin Halvorsen and Herman Kruse, SSB Rapporter 2024/10
Dennis Fredriksen, Elin Halvorsen, Herman Kruse and Andreas Myhre, SSB Rapporter 2023/41
Dynamisk justering av aldersgrensene i folketrygden
Dennis Fredriksen, Herman Kruse and Nils M. Stølen, SSB Rapporter 2022/22
NOU 2022: 7 (sekretariatsmedlem)