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Did the Intergenerational Solidarity Pact Increase the Employment Rate of Older Workers in Belgium? A Macro-Econometric Evaluation

Author

Listed:
  • Dejemeppe, Muriel

    (Université catholique de Louvain)

  • Smith, Catherine

    (Catholic University Louvain)

  • Van der Linden, Bruno

    (IRES, Université catholique de Louvain)

Abstract

In December 2005, the Belgian government adopted the law on the Intergenerational Solidarity Pact (ISP) aiming at increasing the employment rate of older workers. The main policies of the ISP consist in a pension bonus, reductions in employers' social security contributions and measures discouraging early retirement while encouraging working time reductions at the end of the career. We aim at evaluating the overall effectiveness of the ISP in rising the employment rate of older workers. To that purpose, we compare the actual evolution of the employment rate after the implementation of the policies to its predicted (counterfactual) evolution based on the estimation of a macroeconometric model in a period prior to the ISP. The results suggest a slight positive impact of the ISP on the employment rate of older workers but to the detriment of the younger workers. However, there is a lack of statistical power to draw firm conclusions on the overall effect of the ISP.

Suggested Citation

  • Dejemeppe, Muriel & Smith, Catherine & Van der Linden, Bruno, 2015. "Did the Intergenerational Solidarity Pact Increase the Employment Rate of Older Workers in Belgium? A Macro-Econometric Evaluation," IZA Discussion Papers 9115, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9115
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    Cited by:

    1. Michaël Boissonneault & Jaap Oude Mulders & Konrad Turek & Yves Carriere, 2020. "A systematic review of causes of recent increases in ages of labor market exit in OECD countries," PLOS ONE, Public Library of Science, vol. 15(4), pages 1-15, April.
    2. Alain Jousten & Mathieu Lefebvre, 2018. "Older Men’s Labor Force Participation in Belgium," NBER Chapters, in: Social Security Programs and Retirement around the World: Working Longer, pages 33-50, National Bureau of Economic Research, Inc.
    3. Andrea ALBANESE & Bart COCKX, 2015. "Permanent Wage Cost Subsidies for Older Workers. An Effective Tool for Increasing Working Time and Postponing Early Retirement?," LIDAM Discussion Papers IRES 2015006, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    4. Bruno Van der Linden & Vincent Bodart & Muriel Dejemeppe, 2018. "The labor market in Belgium, 2000–2016," IZA World of Labor, Institute of Labor Economics (IZA), pages 428-428, March.

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    More about this item

    Keywords

    aging; evaluation of labor market policies; macro-econometrics;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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