The present Paper studies the retirement incentives for elderly people in Belgium. We model the incentive structure built into the various public early retirement and retirement systems. First, we compute indicators of benefit entitlement such as the social security wealth. Then, we use three different incentive measures based on the notion of social security wealth. In a third step, we perform an empirical estimation of micro-econometric probit and option value models. From our exceptionally rich and broad database, we are able to compute a rather accurate measure of all individuals’ pension wealth, as well as of the implicit tax rates the elderly workers face in case of delayed retirement. We find strong evidence of social security-based financial incentives inducing most workers to retire at the earliest possible stage. Finally, we use the derived parameter estimates from the probit models to simulate the responses to various policy changes.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
2795.
Arnaud Dellis & Raphaël Desmet & Alain Jousten & Sergio Perelman, 2004.
"Micro-Modeling of Retirement in Belgium,"
NBER Chapters,
in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 41-98
National Bureau of Economic Research, Inc.
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Find related papers by JEL classification: H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
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