Micro-Modelling of Retirement in Belgium

43 Pages Posted: 17 May 2001

See all articles by Arnaud Dellis

Arnaud Dellis

Universite du Quebec a Montreal

Alain Jousten

University of Liege; IZA Institute of Labor Economics; Netspar; International Monetary Fund (IMF)

Sergio Perelman

University of Liège - Department of Economics

Date Written: May 2001

Abstract

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.

Keywords: Ageing, Belgium, retirement, social security

JEL Classification: H55, J26

Suggested Citation

Dellis, Arnaud and Jousten, Alain and Perelman, Sergio, Micro-Modelling of Retirement in Belgium (May 2001). Available at SSRN: https://ssrn.com/abstract=270308

Arnaud Dellis (Contact Author)

Universite du Quebec a Montreal ( email )

315 St. Catherine Street East
Montreal, Quebec H2X 3X2
Canada

HOME PAGE: http://sites.google.com/site/arnauddellis/

Alain Jousten

University of Liege ( email )

Place des Orateurs 3
Batiment B31
4000 Liege
Belgium
+32 4 366 3198 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

Sergio Perelman

University of Liège - Department of Economics ( email )

7 Boulevard du Rectorat
Batiment B31
4000 Liege
Belgium
+32 4 156 3098 (Phone)
+32 4 156 2958 (Fax)

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