Early Retirement Behaviour in the Netherlands: Evidence From a Policy Reform

Summary In the early 1990s the Dutch labour unions and employer organisations agreed to transform the generous and actuarially unfair early retirement (ER) schemes into less generous and actuarially fair schemes that reward individuals for postponing retirement. The starting dates of these new ER pr...

Full description

Saved in:
Bibliographic Details
Published in:De Economist (Netherlands) 2010-09, Vol.158 (3), p.209-236
Main Authors: Euwals, Rob, van Vuuren, Daniel, Wolthoff, Ronald
Format: Article
Language:English
Subjects:
Age
C41
Civil service
D91
duration analysis
Early retirement
Economic Policy
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Incentives
Income
intertemporal choice
J26
Labor force
Labor law
Labor supply
Labor unions
Microeconomics
Netherlands
Older people
Public Finance
Reforms
Retirement
Social policy
Studies
Tax rates
Workers
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Summary In the early 1990s the Dutch labour unions and employer organisations agreed to transform the generous and actuarially unfair early retirement (ER) schemes into less generous and actuarially fair schemes that reward individuals for postponing retirement. The starting dates of these new ER programs varied by industry sector. In this study, we exploit this variation in starting dates to estimate the causal impact of the policy reform on early retirement behaviour. We use a large administrative dataset, the Dutch Income Panel 1989–2000, to estimate hazard rate models for the retirement age. We conclude that the policy reform has indeed induced workers to postpone retirement. Both the wealth effect (lower ER wealth) and the substitution effect (lower implicit taxes on retirement postponement) are significant, the latter being more substantial.
ISSN:0013-063X
1572-9982
DOI:10.1007/s10645-010-9139-0