Labour market exit routes in high- and low-educated older workers before and after social insurance and retirement policy reforms in Sweden

Abstract

Abstract Few previous studies have investigated how socioeconomic differences in labour market exit have changed after restrictions in social insurance policies. The aim of this register-based study is to investigate how early labour market exit pathways among older men and women with different levels of education changed after major restrictive social insurance and retirement policy reforms in Sweden. Cohort 1 (pre-reform) consisted of individuals who were 60 or 61 years old in 2005 (N = 186,145) and Cohort 2 (post-reform) consisted of individuals who were 60 or 61 years old in 2012 (N = 176,216). Educational differences in four labour market exit pathways were investigated using Cox proportional hazards regression; the exit pathways were disability pension, early old-age pension with and without income respectively, and no income for two consecutive years. As expected, exits through disability pension were rarer in Cohort 2. Lower education was also more strongly associated with disability pension in Cohort 2. Parallel to this, lower education showed a stronger association with both early old-age pension types in Cohort 2. Additionally, a tendency towards a relatively higher likelihood of earning no income was seen among the less educated. Increases in inequalities tended to be greater for women. Our results indicate that educational inequalities in labour market exit have grown significantly after restrictions in social insurance and changes in retirement policies, which can have negative financial repercussions for those already in a vulnerable position. These results indicate that careful analyses of effects on disparities are needed before making major changes in welfare systems.