This study examines how a first-time malignant cancer diagnosis, acting as an informational shock to perceived longevity, affects the demand for life annuities. Using a quasi-experimental design and exploiting Swedish administrative data, we show that receiving a cancer diagnosis close to retirement reduces annuitization rates by 5.5%. The diagnosis lowers the money’s worth ratio of a life annuity by 33%, representing a substantial financial loss. Combined with the modest behavioral response, this yields a low demand elasticity of 0.17 with respect to the perceived annuity value. Evidence from a complementary laboratory experiment indicates that this limited adjustment is driven by the influence of a default option that reduces responsiveness to private health information and may disadvantage individuals in poor health.

This study contributes to the growing body of research on the relationship between founders' age and new venture performance, addressing existing gaps regarding founders approaching or surpassing retirement age. By analyzing comprehensive Swedish administrative data covering all newly incorporated firms and their founders, we first document an inverse U-shaped relationship between founders' age at founding and firm survival, as well as between founders' aging and employment growth. However, our findings reveal significant disruptions in these patterns between ages 60 and 70. Specifically, the relationship between founders' age at founding and firm survival temporarily improves at the conventional retirement age of 65, transitioning into a more nuanced, bimodal M-shaped pattern. In contrast, the relationship between founders' aging and employment growth plateaus around age 65. Using abductive analysis and a regression discontinuity design, we show that the increased firm survival observed after age 65 is influenced by a different selection of entrepreneurs, as individuals with enhanced financial security from pension access, along with previous industry experience and high levels of education, are more likely to start businesses at this stage.

This paper examines the role of cognitive ability in protecting individuals from financial fraud. We analyze fraud that targets retirement savings in the Swedish public pension system, where several fund companies were expelled for misconduct. Some of these firms then faced criminal investigations that led to prison sentences. Investors in these fraudulent funds experienced both direct losses from the failure to recover misappropriated funds and indirect losses due to poor fund performance and high fees. Using administrative data on fund selections in the Swedish pension system, linked with cognitive ability test scores from military enlistment, we find a nearly linear, strongly negative relationship between cognitive ability and the likelihood of investing in these fraudulent firms. Verbal skills, in particular, play a critical role in protecting savers from fraud, and we ensure that our results are not confounded by a general propensity of low-ability individuals to end up in poorer-performing funds.

We assess the impact of a Swedish regulatory change, which required businesses with any business-to-consumer transactions, whether by cash or card, to use a certified electronic cash register (ECR), on reported revenue. To do this, we use administrative data on the monthly reported revenue of all affected firms and a staggered difference-in-differences approach. Our findings indicate that there was an immediate increase of about 2.7–4.3% in reported revenue following the implementation of a certified ECR. However, the effect was temporary and diminished to zero after just a few months, which indicates that firms found innovative methods to underreport their revenue.

We study a reform that raised the earliest eligibility age for public pensions from 61 to 62. Using rich Swedish administrative data and a difference-in-differences design that compares adjacent age groups differentially affected by the new threshold, we assess the reform’s effects on pension claiming, labor supply, social insurance benefit receipt, and disposable income. Prior to the reform, around 10% of individuals claimed their public pension at age 61. The reform mechanically reduced this share to zero, but also induced delayed claiming beyond the new threshold, including postponed occupational and private pension claims. Employment increased by up to 1.3 percentage points, and sickness and unemployment benefit receipt rose by 0.6–0.9 and 0.1–0.2 percentage points, respectively. These responses were concentrated among low-income individuals who were already working. For this group, increased work offset the delayed pension access and left disposable income largely unchanged. In contrast, non-working low-income individuals and the self-employed experienced a substantial short-term decline in disposable income, ranging from 7 to 10%. Our findings point to liquidity constraints and behavioral responses as key mechanisms in eligibility age reforms within a flexible, actuarially neutral pension system where work and pension claiming are decoupled. Overall, the reform had a modest yet positive net fiscal impact.

This study examines the long-term association between income and life expectancy in Sweden between 1960 and 2021. The study is based on register data that include all Swedish permanent residents aged 40 y and older. The results show that the gap in life expectancy between the top and bottom income percentiles widened substantially: For men, it increased from 3.5 y in the 1960s to 10.9 y by the 2010s, and for women, from 3.8 y in the 1970s to 8.6 y by the 2010s. Despite a reduction in income inequality and an expansion of social spending from the 1960s to the 1990s, health inequality continuously increased over the period under study. The changes of the relation between real income and life expectancy, the so-called Preston curve, reveal a much faster improvement in life expectancy in the upper half of the income distribution than suggested by the cross-sectional relation between income and life expectancy. Analysis of causes of death identified circulatory diseases as the main contributor to improved longevity, while cancer contributed more to the increased gap in life expectancy for women and equally for men. Finally, analysis of the change in the income gradient in avoidable causes of death showed the strongest contribution of preventable causes, both for men and women.

This study examines the simultaneous impact of risk type and risk preferences on annuity demand. Through a quasi-experimental design that leverages individuals’ reactions to their first malignant cancer diagnosis around retirement, we show that a 30% reduction in the present value of life annuities from decreased life expectancy results in just a 5% decline in annuitization rates. We further demonstrate that risk-averse individuals drive this effect, whereas the risk-tolerant remain unchanged in their demand. Our findings suggest that risk-averse individuals view life annuities as a means to ensure against longevity risk.

I de flesta tjänstepensionsavtal finns möjligheten att ta ut tjänstepensionen under en begränsad tidsperiod, till exempel 5 eller 10 år, i stället för livsvarigt. I den här rapporten studerar vi hur förändringar i förväntad livslängd påverkar valet av utbetalningstid. Vi jämför andelen livsvariga utbetalningar bland individer som drabbades av en elakartad cancertumör strax före pensionsåldern med motsvarande andel bland personer som fick samma diagnos strax efter pensionsåldern. Den senare gruppen hade därför inte möjlighet att beakta cancern när de valde utbetalningstid. Resultaten visar att andelen livsvariga utbetalningar är 5 procent lägre bland dem som diagnostiserades med cancer före pensionsuttaget. Effekten är tydlig, men samtidigt förhållandevis begränsad. I rapporten diskuterar vi också vilken roll riskpreferenser har för valet av utbetalningstid och hur dessa modererar den uppmätta effekten. 

We improve upon the Pissarides-Weber method for estimating tax evasion among the self-employed by utilizing unique register-based consumption measures from the Swedish and Finnish mandatory registers for pleasure boats. This allows for more detailed and statistically powered analyses than survey-based applications. Our results indicate overall levels of hidden incomes that are in line with previous studies. However, the functional form analysis shows that the estimated sizes of underreporting in absolute monetary amounts are almost constant over reported income levels, whereas previous studies have assumed that the underreporting is proportional to income. The results from the preference analysis—in which we compare households that will become self-employed in the near future with households that will remain wage earners—are mixed; the two types of households have insignificant (Finland) or economically small (Sweden) preference differences. However, when we use engine power as a price proxy, the preference differences are larger in both countries.