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Social Security and Inequality in Belgium

Author

Listed:
  • Klinges, Giulia

    (University of Liège)

  • Jousten, Alain

    (University of Liège)

  • Lefèbvre, Mathieu

    (Aix Marseille School of Economics)

Abstract

Over the years, the Belgian social security system has undergone substantial reform with a prime focus on increasing older worker labor force participation. The paper explores the effect of past reforms on inequality in old age. We distinguish two separate effects: The mechanical effect considers the change in inequality and expected benefit levels due to the reforms for a fixed retirement age distribution. The behavioral effect accounts for the endogenous change caused by changes in the incentives to work. Our results show that mechanically, reforms have led to losses in expected benefits for all but the lowest income quintile. Behavioral changes had a positive but orders of magnitude smaller effect. Overall, inequality decreased as a result of reforms.

Suggested Citation

  • Klinges, Giulia & Jousten, Alain & Lefèbvre, Mathieu, 2024. "Social Security and Inequality in Belgium," IZA Discussion Papers 16735, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16735
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    References listed on IDEAS

    as
    1. Octave De Brouwer, 2023. "The Growth of Disability Insurance in Belgium: Economic determinants and Policy Implications," ULB Institutional Repository 2013/359863, ULB -- Universite Libre de Bruxelles.
    2. De Brouwer, Octave & Tojerow, Ilan, 2023. "The Growth of Disability Insurance in Belgium: Determinants and Policy Implications," IZA Discussion Papers 16376, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

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      More about this item

      Keywords

      social security and public pensions; old-age labor supply; retirement; pension reforms; inequality;
      All these keywords.

      JEL classification:

      • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
      • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
      • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
      • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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