Seminar: 'Life-cycle wage profiles and pension accumulation; estimating a panel data sample selection model with part-time employment'

Time: 13.00-14.00 hours
Location: CPB-office, Van Stolkweg 14, The Hague

Presentation: Jim Been (UL)

Discussant: Anja Deelen (CPB)

Language: English

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

Abstract subject
This paper estimates life-cycle wage profiles using panel data sample selection models with special attention given to selection into full-time and part-time employment (including gradual retirement). We extend the work of Rochina-Barrachina (1999), who proposed a new estimator for panel data selection models where both the selection and the regression equation contain individual effects allowed to be correlated with the observable variables. Instead of only correcting for systematic differences between those who work and those who do not work, we also take into account unobserved differences between those who work part-time and full-time in a panel data sample selection model. This provides useful information because part-time employment is common among women and gradual retirement is widely used. The model is estimated using a large administrative dataset based on Dutch tax records. Our results suggest the existence of self-selection into work over the life-cycle that would have been unnoted in models without a correction for selection into the number of hours worked. For men we find a small positive selection into work until the age of 60 and negative selection into work after the age of 60 (those with relative advantageous unobserved characteristics leave the labor market early). For women we also find positive selection into work, which is more important than for men, especially between the ages of 30-35 where women give birth and raise young children. Finally, we apply the estimation results to project future wages and accumulated pension entitlements of a representative sample of Dutch households. With these simulations we are able to gain insights in the effects of (proposed) reforms with regard to the fiscal treatment of pension accumulation in the Netherlands.

Seminars
CPB organises seminars for researchers. During these seminars, always held on Tuesday from 1.00 pm. to 2.00 pm., academic papers are presented and discussed. Read here how to subscribe (or unsubscribe) to our alert service (CPB Calendar).

Policy seminars
CPB also organises Policy seminars for policy makers, researchers and other stakeholders. These Policy seminars focus on policy implications. Policy seminars are held on Thursday from 1.00 pm. to 2.00 pm. Read here how to subscribe (or unsubscribe) to our alert service (CPB Calendar).