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Pension Rules and Labour Market Mobility

Author

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  • Marloes Lammers

    (SEO Economic Research, Netherlands)

  • Hans (H.G.) Bloemen

    (Vrije Universiteit Amsterdam, The Netherlands; IZA, Germany; Netspar, The Netherlands; Tinbergen Institute, The Netherlands)

  • Stefan (S.) Hochguertel

    (Vrije Universiteit, The Netherlands; Netspar, The Netherlands)

Abstract

This paper makes use of a natural experiment to examine effects of potential capital losses and general attractiveness of pension schemes on employees' propensity to change jobs. On January 1st 2004, the two largest pension funds in the Netherlands, for civil servants and for the health care sector, changed their pension scheme from a final salary to an average salary. This industry-leve change excludes the possibility that a negative correlation between having a job with an attractive pension scheme and the number of labour market transitions is driven by self-selection of workers into jobs with an attractive pension arrangement. Using individual data covering the entire Dutch population, we estimate discrete choice models for job-to-job transitions. The results show that the number of job transitions of civil servants significantly increased at the onset of the new pension rules. The changing pension rules affected the propensity to change jobs for individuals working in the health care sector only to a smaller extent.

Suggested Citation

  • Marloes Lammers & Hans (H.G.) Bloemen & Stefan (S.) Hochguertel, 2017. "Pension Rules and Labour Market Mobility," Tinbergen Institute Discussion Papers 17-060/V, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20170060
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    References listed on IDEAS

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    1. Andrietti, Vincenzo & Hildebrand, Vincent, 2004. "Evaluating pension portability reforms. the tax reform act of 1986 as a natural experiment," UC3M Working papers. Economics we045220, Universidad Carlos III de Madrid. Departamento de Economía.
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    5. Ponds, Eduard H. M. & Riel, Bart Van, 2009. "Sharing risk: the Netherlands' new approach to pensions," Journal of Pension Economics and Finance, Cambridge University Press, vol. 8(1), pages 91-105, January.
    6. Royalty, Anne Beeson, 1998. "Job-to-Job and Job-to-Nonemployment Turnover by Gender and Education Level," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 392-443, April.
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    Cited by:

    1. Broeders, Dirk & de Haan, Leo, 2020. "Benchmark selection and performance," Journal of Pension Economics and Finance, Cambridge University Press, vol. 19(4), pages 511-531, October.

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    More about this item

    Keywords

    Discrete Choice Models; Policy Evaluation; Labour market Flexibility; Pension Systems;
    All these keywords.

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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