Micro-Modelling of Retirement in Belgium
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.
|Date of creation:||May 2001|
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- Alain Jousten & Pierre Pestieau, 2002.
"Labor Mobility, Redistribution, and Pension Reform in Europe,"
in: Social Security Pension Reform in Europe, pages 85-108
National Bureau of Economic Research, Inc.
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- James H. Stock & David A. Wise, 1988. "Pensions, The Option Value of Work, and Retirement," NBER Working Papers 2686, National Bureau of Economic Research, Inc.
- Sergio Perelman, 1981. "Evaluation patrimoniale des droits à la pension en Belgique," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 89, pages 25-52.
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