How Sensitive Are Individual Retirement Expectations to Raising the Retirement Age?

Andries de Grip, Didier Fouarge and Raymond Montizaan

No 7269, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper investigates the causal effects of the announcement of an increase in the statutory pension age on employee retirement expectations. In June 2010, the Dutch government signed a new pension agreement with the employer and employee organizations that entailed an increase in the statutory pension age from 65 currently to 66 in 2020 for all inhabitants born after 1954. Given the expected increase in average life expectancy, it was also decided that in 2025 the pension age would be further increased to 67 for those born after 1959. This new pension agreement received huge media coverage. Using representative matched administrative and survey data of public sector employees, we find that the proposed policy reform increased the expected retirement age by 3.6 months for employees born between 1954 and 1959 and by 10.8 months for those born after 1959. This increase is reflected in a clear shift in the retirement peak from age 65 to ages 66 and 67 for the respective treated cohorts. Men respond less strongly to the policy reform than women, but within couples we find no evidence that the retirement expectations of one spouse are affected by an increase in the statutory pension age of the other. Furthermore, we show that treatment effects are largely driven by highly educated individuals but are lower for employees whose job involves physically demanding tasks or managerial and supervisory tasks.

Keywords: pension system reform; labor supply; retirement; cross-spouse effects (search for similar items in EconPapers)
JEL-codes: J14 J26 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013-03
New Economics Papers: this item is included in nep-age, nep-dem, nep-eur, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

Published - published in: De Economist, 2013, 161, 225–251

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Related works:
Journal Article: How Sensitive are Individual Retirement Expectations to Raising the Retirement Age? (2013)
Working Paper: How sensitive are individual retirement expectations to raising the retirement age (2013)
Working Paper: How sensitive are individual retirement expectations to raising the retirement age? (2013)
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