Consequences of reduced basic pension for foreign-born individuals

In connection with Sweden’s entry into the EEA (and later the EU), the eligibility rules for the basic pension for immigrants were changed. Previously, full entitlement to the basic pension was granted after 10 years of residence. After the reform, entitlement was instead calculated as the ratio between the number of years of residence in Sweden before age 65 and 40. Certain birth cohorts and refugees were exempt from the reform.

We examine how this policy change affected income, retirement behaviour, emigration, health, and mortality among older immigrants. We also study whether the reform influenced the behaviour of other family members, such as partners and adult children. We compare groups affected by the reform with groups that were exempt, using a differences-in-differences approach.

The study contributes to a growing literature examining the effects of restricting access to various types of social benefits for immigrants.