Exit routes to retirement; the role of social security and self-employment

Time: Tuesday May 15th, 13.00-14.00 hours
Location: CPB-office, Van Stolkweg 14, The Hague

Presentation: Jim Been (Leiden University)

Discussant: Stefan Hochguertel (VU)

Language: English

Registration:  Please register by sending an email to seminars@cpb.nl.

Abstract subject: As in most developed countries, the labor force participation in the Netherlands has been subject to aging and these effects continue to rise for the upcoming decennia. To keep government finances sustainable, social security reforms have been introduced to make exit routes through early retirement, unemployment, and disability less available or attractive. This may, at least partly, explain the popularity and growing self-employment rates among older workers. This paper explores labor market dynamics of elderly workers in the Netherlands. We examine the mobility between self-employment, wage employment, early retirement, and other non-employment using a dynamic multinomial logit model with unobserved heterogeneity. This allows us to measure the extent to which self-employment is a substitute for exit routes through disability and unemployment (that have become less attractive), the role of social security reforms, the kind of transitions that people make before retirement, and state dependence.

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