Veranstaltungen des DIW Berlin/
Events of DIW Berlin

10. Februar 2016

Cluster-Seminar Öffentliche Finanzen und Lebenslagen Full or partial retirement? Effects of the pension incentives and increasing retirement age in the Netherlands and the United States

The share of the older workers in the labor force has increased due to population aging and pension reforms in many countries. However, rules of the public and private pension schemes and restrictions from the employers still require large populations of older workers with possibly heterogeneous work preferences to retire fully at a given age. We study the preferences of older people for a rich set of retirement trajectories characterized by early or delayed full retirement as well as partial retirement at various ages in the Netherlands and the United States. Two in five prefer partial retirement over early or delayed abrupt full retirement. This suggests that partial retirement can substantially increase the utility derived from work in old age. Furthermore, we study the effects of the pension incentives and increasing retirement age on the preferences to delay retirement fully or partially as means of reducing public expenditure. Individuals want to use partial retirement to extend their work lives if deferring pension rights are made actuarially attractive or if pension accruals are made less generous. On the other hand, as the retirement age increases, individuals want to retire early or work part-time instead of full-time. The comparison of the results between the Netherlands and the United States shows that while people in the Netherlands are responsive to a substitution effect of higher pensions, people in the United States are responsive to an income effect of higher pensions.

  • Tunga Kantarci (Tilburg University, The Netherlands)

  • Zeit
    12:30 - 13:30
    DIW Berlin (Eleanor-Dulles-Raum) DIW Berlin im Quartier 110 Raum 5.2.010 Mohrenstraße 58 10117 Berlin
    im DIW Berlin
    Tel.: +49 30 89789 264