Abstract
AbstractIn December 2005, the Belgian government adopted the law on the Intergenerational Solidarity Pact (ISP) aimed at increasing the employment rate of older workers. The main policies of the ISP consist of 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 raising 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 macro-econometric 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.JEL classification:J21, J26, H53, E32
Highlights
The challenge brought by an aging population on the welfare system of many countries in the world is a well-known fact
6 Conclusion The primary aim of this paper is to evaluate the overall impact of the active aging policies introduced by the Intergenerational Solidarity Pact (ISP) in December 2005 on the employment rate of workers aged 50–59 in Belgium
The observed values of the employment rate are compared to their predicted values based on a macro-econometric model estimated over a period of time preceding the implementation of the ISP
Summary
The challenge brought by an aging population on the welfare system of many countries in the world is a well-known fact. In this respect, Belgium is exposed because of policies introduced between the 70’s and the 90’s fostering early exit from the labor market. According to OECD statistics for 2005, in Belgium, the employment rate of men and women aged 55 to 59 years old was, respectively, 55.4 % and 31.8 %, while they were 67.2 % and 48.6 %, on average, in the EU15. In 2012, the situation has improved with an employment rate of 63.9 % and 48.4 % for elderly men and women in Belgium compared to 73.2 % and 59.4 %, on average, in the EU15 countries. The main policies consist in a reduction in employers’ social security contributions, several reforms intending to discourage access to early retirement, an easier access to working
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