samlet årgang - Økonomisk Institut - Københavns Universitet

174
NATIONALØKONOMISK TIDSSKRIFT 2005. NR. 2
administrative purposes. The dataset contains a representative two percent sample of
individuals and their spouses for 1980-1998. In this paper, the focus is on 60-66year-olds
who were in the labour market when aged 59. Therefore, information about
people born in the period from 1921 to 1938 is applied, resulting in a sample in which
individuals in the oldest cohort were 59 years old in 1980, while individuals in the
youngest cohort were 60 years old in 1998. This selection implies that a representative
sample of 60-66-year-olds who were in the labour market when aged 59 is available
for the period 1987-1998. This sample includes 10,922 individuals.
To analyse the effect of the change in the VERP policy in 1992, a natural experiment
is possible. The people in the VERP sample group are entitled to VERP, while people
eligible for PEP constitute the control group. Entitlement to VERP is determined on the
basis of information about receipt of Voluntary Early Retirement Pension benefits
and retrospective information about membership of an unemployment insurance fund.
More precisely, individuals are considered as entitled to VERP if they received
Voluntary Early Retirement Pension benefits during the sample period or had been a
member of an unemployment insurance fund for at least 10 years until age 60 or, if
left-truncated, every year from 1980 until age 60. In counting the number of membership
years, the condition of continuous membership on and after 1992 is taken into
account. Two VERP sample groups are constructed. A broader group (VERP1) consists
of individuals who fulfil the conditions just mentioned, while a smaller group
(VERP2) consists of a subsample of individuals from VERP1 who have been publicly
employed for at least 10 years until age 60 or, if left-truncated, every year from
1980 until age 60. VERP1 makes up 78 percent of the selected sample, while VERP2
accounts for 26 percent. In the residual group, eligibility for PEP is determined on the
basis of information about receipt of a public employment pension and retrospective
information about public employment. 15 If individuals have received a public employment
pension during the sample period 16 or had been publicly employed according
to the same criteria as individuals in the VERP2 group, they are included in the PEP
group (PEP). PEP accounts for 12 percent of the selected sample. For number of
observations in each of the three groups for each of the years in the sample period, see
Table A.1 in the Appendix.
The idea behind constructing two VERP sample groups is to be able to control the
robustness of the results to selections made to increase comparability between the
VERP sample and the control group. However, two control groups are not constructed
15. In this way, data on public servants is captured. However, some public employees not entitled to VERP
are also included, because the available data do not enable a more precise selection of individuals to this
group.
16. Unfortunately, information about receipt of public employment pensions is only available for the years
1997 and 1998.