Expected Longevity - A Study of the Norwegian Pension System

Abstract

The growing concern about the increasing age wave caused the Norwegian government to change their pension system in 2011, into a more flexible pension system. One of the reasons for this is the increase in expected longevity for every birth cohort. This paper examines how the claiming behaviour is affected by individuals’ expected longevity after the implementation of the new pension system in Norway. The results reveal that having a higher expected longevity causes individuals to delay their pension claiming. However, we find no evidence that individuals will act on the knowledge about their own expected longevity in choosing when to claim pensions. Moreover, we find evidence that different socioeconomic and demographic variables cause individuals to act differently in choosing when to claim pensions. Lastly, we find that labour market participation, among those aged 62, has improved after the new pension system was introduced, creating a more mature labour force.