The effect of announced statutory retirement age change on retirement plans of starters on the Dutch labour market

The Netherlands has to cope with the financial burden of an aging population. Due to the economic downturn, reforms to the current old age social security system are more pressed than ever before. Although an increase in the eligibility age for a state pension has been high on the policy agenda for years, until recently no incumbent government proposed concrete plans to raise the eligibility age.

In this paper, we consider the effect of the 2009 plans of the Dutch government to increase the statutory retirement age to 67 (from 65) on the preferred retirement age of starters on the Dutch labour market. To study this effect, we analyze the impact of newspaper publicity regarding the upcoming pension reforms on the preferred retirement age. Furthermore, we analyze how planned retirement ages correlate with various demographic and socio-economic indicators. Our results indicate that the planned retirement age made a substantial jump after the intended increase of the eligibility age for a state pension was announced. Nevertheless, we find that media content on the eligibility age has no effect on the preferred retirement age. Other variables, such as labour market characteristics, are better predictors of retirement plans.