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.

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.

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.

In this paper, we examine the impact of the COVID-19 pandemic on the well-being of entrepreneurs. We surveyed a representative sample of Swedish entrepreneurs and wage employees at different stages of the COVID-19 pandemic. The survey data, combined with register data, show that the COVID-19 outbreak has a negative effect on the well-being of entrepreneurs in terms of increased perceived stress. However, this negative effect is weaker for entrepreneurs who feel younger than their chronological age and entrepreneurs who are geographically distant from the epicenter of the crisis. 

Purpose: How did investors in the Swedish Premium Pension System (PPS) react to the stock market shock ignited by the COVID-19 pandemic?

Design/methodology/approach: The authors use fund-level data from the Swedish Pensions Agency on investment choices in the PPS. For each fund, the authors use monthly information on the number of investors and holdings' market value up to November 2020. The authors also use information on the total number of portfolio changes per day. For analyzing whether PPS investors reacted to the pandemic with claiming their pension, the authors use monthly data on the number of investors of a certain age group who initiate their public pension payment.

Findings: Trades more than doubled, and shifted capital from equity funds to low risk interest funds. In economic terms, however, trading stayed at low levels–less than two percent of investors traded in March 2020 and there was no effect on pension withdrawals. The increased trading during the market tumult was disproportionately concentrated among investors in the top of the pension capital distribution.

Research limitations/implications: With fund-level data, the authors cannot investigate what in particular made retirement investors stay calm in the midst of a severe market decline. Either, those investors have a long-term investment horizon as they save for their pension or particular features of the system's choice architecture induce inertia and discourage from trading. The sub-group analyses are more consistent with the explanation that PPS-induced inertia is responsible for the relatively small increase in trading activity, but future research could exploit individual level data to explore this in more detail.

Practical implications: The often-criticized PPS choice architecture provided positive side effects in times of a severe market shock by shielding retail investors from committing trading mistakes when trying to outsmart the market.

Originality/value: The study complements previous evidence on the effects of COVID-19 on investor activity. The small response of PPS investors to COVID-19 is in line with earlier US findings on 401(k) accounts during the 2007 financial crisis (Tang et al., 2012) and industry reports about the COVID-19 period (see, e.g. Mitchell, 2020). The authors find no effects at all on public pension withdrawals in Sweden, while evidence from US 401(k) plans indicates a small share of workers taking COVID-related early withdrawals.

Employer cofinancing in disability insurance (DI) systems aims to reduce the inflow to DI by making employers internalise their DI costs. We evaluate a cofinancing system for the local government sector in Sweden inspired by the literature on yardstick competition. In the system, local governments are responsible for the DI of their employees, while being compensated by the central government for their expected DI payments. The arrangement essentially eliminates the large fiscal externalities associated with DI. Also, the arrangement can be implemented within current administrative setups, and the design credibly ensures that no extra costs are imposed on the local government sector in the aggregate. Drawing on Swedish employer-employee matched data, we show that the net transfers implied by the scheme are quite large as a share of DI payments, but sufficiently small as a share of tax payments to not be onerous, and that they only marginally increase regional inequality.

We study the effects of two exogenous modifications in the Swedish pension system application form nudging individuals towards a fixed-term payout. Meanwhile, the set of available options and the default option—life annuity—were unchanged during the period under study. We examine the effects on individuals’ payout decisions and the spillover effects on labour supply and other pensions using a difference-in-difference framework and detailed administrative data on actual payout decisions and a wide range of individual-level outcomes. Each modification increased the demand for the nudged payout by around 30 percentage points. The first modification also induced individuals to work less.