The Politics of Pension Reform: An Empirical Analysis of Pension Reform Intensity in 23 OECD countries, Henning Finseraas PhD student NOVA & NTNU

Introduction Can we observe systematic partisan and political institutional effects on pension reform intensity in OECD countries? Dependent variable: Reform intensity score developed by Brandt et al. (2005) attempt to quantify the degree of policy change in OECD countries for the period. Measure of retrenchment?

The Politics of Pension Reform Partisan effect? Leftist parties defend status quo? No room for partisan effects? Less costly for Left parties to propose change? Power dispersion effect? Power dispersion implies more veto players, thus less reform? Power dispersion implies less accountability, thus more reform? Corporatism effect?

Data and method Dependent variable: reform intensity in the area of early retirement, invalidity and old- age pension schemes: The score increases with the size of cuts in the implicit tax on continuing work. The score increases with changes in invalidity schemes that follow OECDs recommendations. OLS regression, visualized in plots.

Empirical results Effective retirement age and employment rates - measured at the beginning of the period - are very good predictors of reform intensity. Projected spending levels and population composition less effective predictors. Countries with a high percentage of left seats in parliament tend to have higher reform scores. Countries with a high level of power dispersion typically have low reform scores, while scores are more spread among countries were power is more concentrated. Even weaker relationships between measures of corporatism and reform scores.

Conclusion/Questions Difficult to observe systematic effects apart from the importance of initial conditions. Why? There are no systematic partisan or political institutional effects on pension reform? All important actors accept that reform has to take place? The data is not good enough?