Socioeconomic Status and the Effects of Pension Reforms on Lifetime Benefits in Denmark

We examine the impact of Danish pension reforms from 1990 to 2022 on retirement behavior and lifetime benefit inequality across socioeconomic groups. Using administrative data and an affluence-based measure of socioeconomic status, we estimate retirement responses to Social Security wealth, implicit tax rates, and earnings, while accounting for group-specific differences in life expectancy. Counterfactual simulations highlight substantial, progressive gains for lower socioeconomic groups during an early reform period, but reveal increasingly regressive outcomes in later reforms. Our results underscore that mechanical changes in pension rules drive inequality more than behavioral adjustments, indicating the need for targeted policy measures.