Working Paper: NBER ID: w31552
Authors: Annelore Fraikin; Alain Jousten; Mathieu Lefebvre
Abstract: In Belgium, a series of social security reforms have been implemented over the years with the overarching goal of increasing the labor force participation through better work incentives. Using individual-level administrative data, the paper studies the impact of those incentive-based reforms on observed changes in older workers’ employment patterns. We investigate how social security incentives and particularly their changes over time can explain the retirement decision. We calculate indicators of benefit entitlement and derive retirement incentive measures. Using micro-estimation techniques, we find that more generous retirement provision contribute to earlier retirement. Counterfactual reform simulations show strongly incentivizing effects at lower ages and more mixed results at higher ages – particularly for men.
Keywords: social security; labor force participation; retirement incentives; Belgium
JEL Codes: I30; J14; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| generosity of benefits (D64) | timing of retirement (J26) |
| social security reforms (H55) | retirement decisions of older workers (J26) |
| more generous retirement provisions (H55) | earlier retirement (J26) |
| social security incentives (H55) | labor force participation (J22) |