Open Access Original article

The future of retirement and the pension system: How the public’s expectations vary over time and across socio-economic groups

Luc Bissonnette1 and Arthur van Soest2*

Author Affiliations

1 Netspar and CIRPÉE, Université Laval, Pavillon J.-A.-DeSève, Québec, QC, Canada, G1V OA6

2 Netspar, Tilburg University, Warandelaan 2, Tilburg, 5037 AB,\ The Netherlands

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IZA Journal of European Labor Studies 2012, 1:2  doi:10.1186/2193-9012-1-2

Published: 9 October 2012

Abstract

We analyze expectations of the Dutch population ages 25 and older concerning future generosity of state and occupational pensions, the main pillars of the Dutch pension system. We use rotating panel data with monthly observations from 2006 until 2012 on individuals’ subjective expectations concerning changes between now and ten or twenty years from now in the purchasing power of occupational pensions and of old age social security benefits, the eligibility age for old age social security benefits, and the average retirement age ten or twenty years from now. We find significant variation in expectations across socio-economic groups, with more pessimistic expectations amongst higher educated and higher income groups. We also find that expectations have gradually become more pessimistic since the onset of the economic and financial crisis, in line with the plans for reforms that will reduce pension generosity.

Keywords:
Subjective probabilities; Old age social security; Occupational pensions; D84; H55; J26