Labour Market Responses of survival pensioners: estimating a labour supply model and predicting the effect of the reform

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Labour Market Responses of survival pensioners: estimating a labour supply model and predicting the effect of the reform

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André Decoster
Kristian Orsini
Gut Van Camp

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Abstract

In this paper we use a sample of administrative data coming from the `Dataware-house labour market and social protection' and the microsimulation model MIMOSIS to assess the labour supply effects of a reform of the rules for cumulating labour income with survival pension as proposed in the Generations Pact. In a first step we estimate a standard discrete choice labour supply model for several sub groups. Subsequently we model the proposed reform in the tax and benefit rules and we predict the change in desired labour supply of the targeted group. The reform has a significant positive effect on the labour supply of widows, but the effects are quite weak amongst the survivor pensioner with very low benefit, i.e. the group that was originally thought to benefit the most from the reform.

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Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces0703.

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Date of creation: Mar 2007
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Handle: RePEc:ete:ceswps:ces0703

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Find related papers by JEL classification:
C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

This paper has been announced in the following NEP Reports:

NEP-AGE-2008-04-12 (Economics of Ageing)
NEP-ALL-2008-04-12 (All new papers)
NEP-DCM-2008-04-12 (Discrete Choice Models)

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