11
We use three measures of labor market status at 55-59 years of age. All measures
make use of data from LOUISE (or SYS), administrated by Statistics Sweden. The first
and primary measurement is prevalence of occupational pensions between the ages 55
to 59.
15
The two alternative measures used in sensitivity analyses are i) prevalence of
labor market earnings larger than one price base amount (PBA),
16
and ii) gainful
employment in November each year as registered in administrative registers (RAMS,
Statistics Sweden), following the definition used by the International Labour
Organization (ILO). The ILO definition means that all who performed gainful work for
at least one hour per week are considered employed.
Income is measured in several ways.
Disposable income
is net-of-tax income from
work, capital, and social security income (in Sweden many of these benefits are subject
to income tax), combined with social benefits and transfers. Due to the age restriction
on our population (i.e., 16–65 during 1987–1999 and 16–74 during 2000–2010), there is
a gap in data on disposable income for cohorts 1931-1934.
17
We impute the missing
data by making a linear approximation between the last observation before year 2000
and year 2000, when we start observing the disposable income again (at least, until the
person exits the population via death or emigration).
Labor income
is measured as
income from work and entrepreneurship before income tax.
provides some descriptive statistics for our analysis population. From this
table we can see that on average, military employees have higher labor incomes at age
54 and that the income distribution of the military is more compressed than that of the
other government employees. On the other hand, disposable income at age 59 is
relatively similar across groups. As mentioned above, large shares of civil servants have
income above the income cap in the public pension system. We find that for military
personal born 1931-1932 and 1938-1939 respectively, 23 percent and 55 percent had
labor incomes above the cap at age 54. For other civil servants, the corresponding shares
are 18 percent and 33 percent respectively. The fraction of occupational pension
15
There are data limitations with regard to pensions, since these data started in 1990. This means that we do not have
complete information on pensions before age 59 (58) for the oldest cohort born 1931 (1932). However, since it is
very unlikely that individuals with take-up of pensions stopped receiving their pensions in a subsequent year (except
due to death), we can safely impute individual pension take-up using the information given in 1990. We do this
imputation in ages 55-58 for cohorts 1931 and for ages 55-57 for cohort 1932. This imputation does not affect our
measure of labor market status based on the take-up of occupational pension in the age span 55-59 but improves our
knowledge regarding the exact age when take-up started before age 60.
16
In 2013 the PBA was 44,500 SEK (5,170 Euro).
17
For the 1931 cohort the disposable income at ages 66-69 are not observed, and for those born 1932, the disposable
income at the ages 66-68 are not observed.
