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The Decline of Early Retirement Pathways in the Netherlands: An Empirical Analysis for the Health Care Sector

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Author Info

  • Euwals, Rob

    ()
    (CPB Netherlands Bureau for Economic Policy Analysis)

  • van Vuren, Annemiek

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • van Vuuren, Daniel

    ()
    (CPB Netherlands Bureau for Economic Policy Analysis)

Abstract

Early retirement schemes and disability insurance in the Netherlands have both been reformed during the past decades. The reforms have increased incentives to continue working and have decreased the substitution between early retirement and disability. This study investigates the impact of the reforms on labour market exit probabilities. We use administrative data for workers in the Dutch health care sector between 1999 and 2006. We estimate a multinomial Logit model for transitions out of the labour force. The empirical results suggest that the reforms have been effective, as the labour market participation rate of the elderly has increased. The concept of substitute pathways into retirement seems less relevant today as the results confirm that disability insurance is closed off as an early retirement exit route.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5810.

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Length: 26 pages
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5810

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Keywords: early retirement; disability insurance; labour supply;

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  1. Bound, John & Schoenbaum, Michael & Stinebrickner, Todd R. & Waidmann, Timothy, 1999. "The dynamic effects of health on the labor force transitions of older workers," Labour Economics, Elsevier, vol. 6(2), pages 179-202, June.
  2. Kerkhofs, Marcel & Lindeboom, Maarten & Theeuwes, Jules, 1999. "Retirement, financial incentives and health," Labour Economics, Elsevier, vol. 6(2), pages 203-227, June.
  3. Annemiek Vuren & Daniel Vuuren, 2007. "Financial Incentives in Disability Insurance in the Netherlands," De Economist, Springer, vol. 155(1), pages 73-98, March.
  4. Luc Behaghel & Didier Blanchet & Thierry Debrand & Muriel Roger, 2011. "Disability and social security reforms: The French case," PSE Working Papers halshs-00556722, HAL.
    • Luc Behaghel & Didier Blanchet & Thierry Debrand & Muriel Roger, 2012. "Disability and Social Security Reforms: The French Case," NBER Chapters, in: Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participatio, pages 301-326 National Bureau of Economic Research, Inc.
  5. Larsen, Mona & Pedersen, Peder J., 2005. "Pathways to Early Retirement in Denmark, 1984-2000," IZA Discussion Papers 1575, Institute for the Study of Labor (IZA).
  6. Pierre Koning & Daniel van Vuuren, 2006. "Disability insurance and unemployment insurance as substitute pathways," CPB Discussion Paper 70, CPB Netherlands Bureau for Economic Policy Analysis.
  7. Olivia S. Mitchell & John W.R. Phillips, 2000. "Retirement Responses to Early Social Security Benefit Reductions," NBER Working Papers 7963, National Bureau of Economic Research, Inc.
  8. Regina Riphahn, 1997. "Disability retirement and unemployment - substitute pathways for labour force exit? An empirical test for the case of Germany," Applied Economics, Taylor & Francis Journals, vol. 29(5), pages 551-561.
  9. Rob Euwals & Daniel J. van Vuuren & Ronald P. Wolthoff, 2006. "Early Retirement Behaviour in the Netherlands: Evidence from a Policy Reform," Tinbergen Institute Discussion Papers 06-021/3, Tinbergen Institute.
  10. CREMER, Helmuth & LOZACHMEUR, Jean-Marie & PESTIEAU, Pierre, . "Social security, retirement age and optimal income taxation," CORE Discussion Papers RP -1722, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. Rob Euwals & Marike Knoef & Daniel van Vuuren, 2007. "The trend in female labour force participation; what can be expected for the future?," CPB Discussion Paper 93, CPB Netherlands Bureau for Economic Policy Analysis.
  12. Asghar Zaidi & Edward R. Whitehouse, 2009. "Should Pension Systems Recognise "Hazardous and Arduous Work"?," OECD Social, Employment and Migration Working Papers 91, OECD Publishing.
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  14. Arjan Heyma, 2004. "A structural dynamic analysis of retirement behaviour in the Netherlands," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 739-759.
  15. Jonathan Gruber & David A. Wise, 2010. "Social Security Programs and Retirement around the World: The Relationship to Youth Employment," NBER Books, National Bureau of Economic Research, Inc, number grub08-1, May.
  16. Hugo Benítez-Silva & Richard Disney & Sergi Jiménez-Martín, 2010. "Disability, capacity for work and the business cycle: an international perspective," Economic Policy, CEPR & CES & MSH, vol. 25, pages 483-536, 07.
  17. Dan Black & Kermit Daniel & Seth Sanders, 2002. "The Impact of Economic Conditions on Participation in Disability Programs: Evidence from the Coal Boom and Bust," American Economic Review, American Economic Association, vol. 92(1), pages 27-50, March.
  18. Helmuth Cremer & Jean-Marie Lozachmeur & Pierre Pestieau, 2008. "Social Security And Retirement Decision: A Positive And Normative Approach ," Journal of Economic Surveys, Wiley Blackwell, vol. 22(2), pages 213-233, 04.
  19. David H. Autor & Mark G. Duggan, 2003. "The Rise In The Disability Rolls And The Decline In Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 157-205, February.
  20. Duggan, Mark & Singleton, Perry & Song, Jae, 2007. "Aching to retire? The rise in the full retirement age and its impact on the social security disability rolls," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1327-1350, August.
  21. Pierre Koning & Daniel van Vuuren, 2007. "Hidden Unemployment in Disability Insurance," LABOUR, CEIS, vol. 21(4-5), pages 611-636, December.
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