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The decline of substitute pathways into retirement: Empirical evidence from the Dutch health care sector

Authors

  • Rob Euwals,

    Corresponding author
    1. CPB, The Hague, Netherlands;
      Rob Euwals, CPB — Netherlands Bureau for Economic Policy Analysis, P.O. Box 80510, 2508GM The Hague, Netherlands; Email: r.w.euwals@cpb.nl.
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  • Annemiek van Vuren,

    Corresponding author
    1. SNS Asset Management, Utrecht, Netherlands
      Annemiek van Vuren, SNS Asset Management, P.O. Box 8444, 3503RK Utrecht, Netherlands; Email: annemiekvanvuren@ziggo.nl.
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  • Daniel van Vuuren

    Corresponding author
    1. CPB, The Hague, Netherlands;
      Daniel van Vuuren, CPB — Netherlands Bureau for Economic Policy Analysis, P.O. Box 80510, 2508GM The Hague, Netherlands; Email: d.j.van.vuuren@cpb.nl.
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  • Rob Euwals is associated also with Netspar and IZA. Daniel van Vuuren is associated also with Netspar. The authors thank Rob Alessie, Marloes Lammers, Arthur van Soest, Elisabetta Trevisan, and participants at seminars at CPB and Netspar for comments. Stichting Instituut GAK is acknowledged for the provision of financial support, while PGGM/PFZW and Statistics Netherlands are acknowledged for the provision of data.

Rob Euwals, CPB — Netherlands Bureau for Economic Policy Analysis, P.O. Box 80510, 2508GM The Hague, Netherlands; Email: r.w.euwals@cpb.nl.

Annemiek van Vuren, SNS Asset Management, P.O. Box 8444, 3503RK Utrecht, Netherlands; Email: annemiekvanvuren@ziggo.nl.

Daniel van Vuuren, CPB — Netherlands Bureau for Economic Policy Analysis, P.O. Box 80510, 2508GM The Hague, Netherlands; Email: d.j.van.vuuren@cpb.nl.

Abstract

Early retirement schemes and disability insurance in the Netherlands have undergone several reforms in recent decades. The reforms have increased incentives for older workers to continue working and have decreased the roles of “substitute pathways” into retirement. This article gives an overview of the reforms and, using administrative data for workers in the health care sector, tests a number of hypotheses about the labour market participation of older workers. The results offer two main findings: i) that the Dutch reforms have indeed been effective, as the labour force participation rate of older workers has increased; and ii) the concept of “substitute pathways” has become less relevant as the use of disability insurance has been closed off as an exit route to early retirement. Nevertheless, caution is required before generalizing the implications of these Dutch findings to other OECD countries.

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