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Pension Rules and Labour Market Mobility

Author

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  • Lammers, Marloes

    (Vrije Universiteit Amsterdam)

  • Bloemen, Hans

    (Vrije Universiteit Amsterdam)

  • Hochguertel, Stefan

    (Vrije Universiteit Amsterdam)

Abstract

This paper makes use of a natural experiment to examine effects of potential capital losses and general attractiveness of pension schemes on employees' propensity to change jobs. On January 1st 2004, the two largest pension funds in the Netherlands, for civil servants and for the health care sector, changed their pension scheme from a final salary to an average salary. This industry-level change excludes the possibility that a negative correlation between having a job with an attractive pension scheme and the number of labour market transitions is driven by self-selection of workers into jobs with an attractive pension arrangement. Using individual data covering the entire Dutch population, we estimate discrete choice models for job-to-job transitions. The results show that the number of job transitions of civil servants significantly increased at the onset of the new pension rules. The changing pension rules affected the propensity to change jobs for individuals working in the health care sector only to a smaller extent.

Suggested Citation

  • Lammers, Marloes & Bloemen, Hans & Hochguertel, Stefan, 2017. "Pension Rules and Labour Market Mobility," IZA Discussion Papers 10840, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10840
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    References listed on IDEAS

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    1. Andrietti, Vincenzo & Hildebrand, Vincent, 2004. "Evaluating pension portability reforms. the tax reform act of 1986 as a natural experiment," UC3M Working papers. Economics we045220, Universidad Carlos III de Madrid. Departamento de Economía.
    2. Steven G. Allen & Robert L. Clark & Ann A. McDermed, 1993. "Pensions, Bonding, and Lifetime Jobs," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 463-481.
    3. van den Berg, Gerard J, 1992. "A Structural Dynamic Analysis of Job Turnover and the Costs Associated with Moving to Another Job," Economic Journal, Royal Economic Society, vol. 102(414), pages 1116-1133, September.
    4. Ashok Thomas & Luca Spataro, 2016. "The Effects Of Pension Funds On Markets Performance: A Review," Journal of Economic Surveys, Wiley Blackwell, vol. 30(1), pages 1-33, February.
    5. Ponds, Eduard H. M. & Riel, Bart Van, 2009. "Sharing risk: the Netherlands' new approach to pensions," Journal of Pension Economics and Finance, Cambridge University Press, vol. 8(1), pages 91-105, January.
    6. Royalty, Anne Beeson, 1998. "Job-to-Job and Job-to-Nonemployment Turnover by Gender and Education Level," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 392-443, April.
    7. Steven G. Allen & Robert L. Clark, 1987. "Pensions and Firm Performance," NBER Working Papers 2266, National Bureau of Economic Research, Inc.
    8. Andrietti, Vincenzo, 2004. "Pension choices and job mobility in the UK," UC3M Working papers. Economics we043713, Universidad Carlos III de Madrid. Departamento de Economía.
    9. Ponds, Eduard & Steenbeek, O.W., 2016. "The Netherlands," Other publications TiSEM 5e51439c-3808-4aeb-adad-0, Tilburg University, School of Economics and Management.
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    Cited by:

    1. Broeders, Dirk & de Haan, Leo, 2020. "Benchmark selection and performance," Journal of Pension Economics and Finance, Cambridge University Press, vol. 19(4), pages 511-531, October.

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    More about this item

    Keywords

    discrete choice models; policy evaluation; labour market flexibility; pension systems;
    All these keywords.

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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