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Can the Dutch meet their own retirement expenditure goals?

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  • de Bresser, Jochem
  • Knoef, Marike

Abstract

Population aging and the poor performance of financial markets during recent years put the sustainability of pension arrangements in many Western countries under pressure. In order to investigate whether the Dutch will be able to cope with possible cutbacks in the generosity of pensions, we analyze their preparedness for retirement in 2008, at the eve of the prolonged slump. In contrast to previous efforts to measure preparedness for retirement, we disentangle the roles of variation in needs and accumulated resources by comparing annuitized wealth from administrative data with self-reports of minimal and preferred expenditures during retirement. In order to draw conclusions that are representative for the Dutch population we estimate a multivariate sample selection model and simulate pension annuities and consumption needs. The model takes into account that some people thought more about retirement than others and that some people found it more difficult than others to answer questions about retirement needs. We find that in the aggregate the Dutch can expect to retire quite comfortably, exceeding their expenditure floors and affording their preferred level of spending. However, both needs and resources vary widely across the sample and about a fifth cannot afford their minimal expenditures even if they would draw down housing wealth.

Suggested Citation

  • de Bresser, Jochem & Knoef, Marike, 2015. "Can the Dutch meet their own retirement expenditure goals?," Labour Economics, Elsevier, vol. 34(C), pages 100-117.
  • Handle: RePEc:eee:labeco:v:34:y:2015:i:c:p:100-117
    DOI: 10.1016/j.labeco.2015.03.014
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    Cited by:

    1. Thomas F. Crossley & Jochem Bresser & Liam Delaney & Joachim Winter, 2017. "Can Survey Participation Alter Household Saving Behaviour?," Economic Journal, Royal Economic Society, vol. 127(606), pages 2332-2357, November.
    2. Milena Dinkova & Adriaan Kalwij & Rob Alessie, 2021. "Know More, Spend More? The Impact of Financial Literacy on Household Consumption," De Economist, Springer, vol. 169(4), pages 469-498, November.
    3. Van Ooijen, Raun & de Bresser, Jochem & Knoef, Marike, 2018. "Health and Household Expenditures," Other publications TiSEM 0912a7f0-22f5-4f25-acbc-e, Tilburg University, School of Economics and Management.
    4. Luuk Metselaar & Peter Zwaneveld & Casper Ewijk, 2022. "Reforming Occupational Pensions in the Netherlands: Contract and Intergenerational Aspects," De Economist, Springer, vol. 170(1), pages 7-36, February.
    5. Beusch, Elisabeth & Van Soest, Arthur, 2020. "A dynamic multinomial model of self-employment in the Netherlands," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 59, pages 5-32.
    6. de Bresser, Jochem & Knoef, Marike & van Ooijen, Raun, 2022. "Preferences for in-kind and in-cash home care insurance," Journal of Health Economics, Elsevier, vol. 84(C).
    7. Bonekamp, Johan & van Soest, Arthur, 2022. "Evidence of behavioural life-cycle features in spending patterns after retirement," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    8. de Bresser, Jochem & Knoef, Marike & van Ooijen, Raun, 2021. "Preferences for In-Kind and In-Cash Home Care Insurance," Discussion Paper 2021-033, Tilburg University, Center for Economic Research.
    9. de Bresser, Jochem & Knoef, Marike & van Ooijen, Raun, 2021. "Preferences for In-Kind and In-Cash Home Care Insurance," Other publications TiSEM fca83bd4-09cc-4072-81c6-0, Tilburg University, School of Economics and Management.
    10. Bart Dees & Theo Nijman & Arthur Soest, 2023. "Stated Product Choices of Heterogeneous Agents are Largely Consistent with Standard Models," De Economist, Springer, vol. 171(3), pages 267-302, September.
    11. de Bresser, Jochem & Knoef, Marike, 2019. "Heterogeneous Default Effects on Retirement Saving : Sledgehammers or Precision Instruments," Other publications TiSEM c889dcee-39b2-4817-99fc-7, Tilburg University, School of Economics and Management.
    12. Potters, Jan & Riedl, A. & Smeets, Paul, 2016. "Towards a Practical and Scientifically Sound Tool for Measuring Time and Risk Preferences in Pension Savings Decisions," Other publications TiSEM db8f7fd6-cd3c-44a5-a0ec-6, Tilburg University, School of Economics and Management.
    13. de Bresser, Jochem & Knoef, Marike & Kools, Lieke, 2021. "Cutting one’s coat according to one’s cloth – How did the great recession affect retirement resources and expenditure goals?," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 126-166.
    14. de Bresser, Jochem & Kools, Lieke & Knoef, Marike, 2019. "Cutting one’s coat according to one’s cloth : How did the Great Recession affect retirement resources and expenditure goals?," Other publications TiSEM 9415a8f7-182f-4675-893e-c, Tilburg University, School of Economics and Management.
    15. Elisabeth Beusch & Arthur Soest, 2020. "Labour Market Trajectories of the Self-employed in the Netherlands," De Economist, Springer, vol. 168(1), pages 109-146, March.
    16. Rob Bauer & Inka Eberhardt & Paul Smeets, 2022. "A Fistful of Dollars: Financial Incentives, Peer Information, and Retirement Savings," Review of Financial Studies, Society for Financial Studies, vol. 35(6), pages 2981-3020.

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    More about this item

    Keywords

    Retirement; Pensions; Savings; Aging;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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