The financial implications of working longer: An Application of a Micro-Economic Model of Retirement in Belgium
AbstractIn this paper, the costs and benefits associated with postponing retirement are simulated in a standard simulation model for Belgium, using the approach of Stock and Wise (1990). Unlike earlier microsimulation-based applications of this approach, such as Gruber and Wise (1999, 2004), this model does not take a representative sample as the point of departure, but simulates the costs and benefits of postponing retirement for four fictitious employees, representing male and female white- and blue-collar workers. While confirming conclusions drawn by other authors, this model allows for the separation of specific retirement schemes, and of the effect of different fiscal regimes for those retired and working. It is shown that differences between retirement schemes show up in differences in replacement rates and by whether or not the retirement benefit is a function of career length. Furthermore, advantageous fiscal regulations for the retired have a strong impact on the implicit costs of postponing retirement.
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Bibliographic InfoArticle provided by Interational Microsimulation Association in its journal International Journal of Microsimulation.
Volume (Year): 1 (2007)
Issue (Month): 1 ()
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Web page: http://ima.natsem.canberra.edu.au/index.htm
option value; peak value; pension schemes; replacement rates;
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- Axel Borsch-Supan & Barbara Berkel, 2003. "Pension Reform in Germany: The Impact on Retirement Decisions," NBER Working Papers 9913, National Bureau of Economic Research, Inc.
- Paul Williamson, 2007. "The role of the International Journal of Microsimulation," International Journal of Microsimulation, Interational Microsimulation Association, Interational Microsimulation Association, vol. 1(1), pages 1-2.
- Jan-Maarten van Sonsbeek & firstname.lastname@example.org, 2011. "Micro simulations on the effects of ageing-related policy measures: The Social Affairs Department of the Netherlands Ageing and Pensions Model," International Journal of Microsimulation, Interational Microsimulation Association, Interational Microsimulation Association, vol. 4(1), pages 72-99.
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