Social Security and Inequality in Belgium

Giulia Klinges, Alain Jousten and Mathieu Lefebvre
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Giulia Klinges: University of Liège

No 16735, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: social security and public pensions; old-age labor supply; retirement; pension reforms; inequality (search for similar items in EconPapers)
JEL-codes: D63 H55 I38 J26 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2024-01
New Economics Papers: this item is included in nep-age, nep-eur, nep-lma, nep-pbe and nep-pub
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