Early Retirement and Employment of the Young in the Netherlands

Arie Kapteyn, Klaas de Vos and Adriaan Kalwij

in Social Security Programs and Retirement around the World

Published by University of Chicago Press

Published in print October 2007 | ISBN: 9780226310176
Published online February 2013 | e-ISBN: 9780226310008 | DOI:
Early Retirement and Employment of the Young in the Netherlands

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This chapter addresses the question of whether early retirement of the elderly from the labor force created jobs for the young. It starts by providing a brief history of the main benefit schemes related to retirement: early retirement, disability, social security, and occupational pensions. It then provides graphical evidence on the relationship between employment and unemployment of the young and labor force participation of the old. Next, it presents regressions explaining the labor market status of the young as a function of employment of the elderly. This is followed by a study of the time series properties of these variables and a few indicators of retirement incentives. The results suggest complementarity between labor force participation of the elderly and employment of the younger age groups. Thus, if anything, attempts to reduce unemployment via strong incentives for retirement most likely have aggravated the problem rather than alleviating it.

Keywords: labor force participation; elderly workers; young workers; pensions; social security; disability; unemployment

Chapter.  5322 words.  Illustrated.

Subjects: Public Economics

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