Research

Working papers

• Inequality and Redistribution in the Netherlands,
  with Arjan Bruil, Celine van Essen, Wouter Leenders, Arjan Lejour and Jan Mohlmann

  • Abstract: This paper combines detailed administrative records on the universe of the Dutch population with national account aggregates to provide a thorough description of income inequality before and after taxation and income and in-kind transfers in the Netherlands, for the year 2016. When accounting for domestic and foreign retained earnings, income inequality before transfers stands out, as the last percentile of the income distribution earns 12% of the national income and the last decile 35%. The tax and transfer system largely reduces income inequality: the top 10%’s income share falls to 28%. Inequality reduction is largely driven by benefits, that are targeted at the bottom of the distribution, and much less so by the tax system, which is rather flat overall and even largely regressive at the very top of the income distribution.
  • Link to the working paper

• The Social Multiplier of Pension Reform,
  with Emre Oral Arthur Seilbold

  • Abstract: We study the influence of family members, neighbors and coworkers on retirement behavior. To estimate causal retirement spillovers between individuals, we exploit a pension reform in the Netherlands that creates exogenous variation in peers’ retirement ages, and we use administrative data on the full Dutch population. We find large spillovers in couples, primarily due to women reacting to their husband’s retirement choices. Consistent with homophily in social interactions, the influence of the average sibling, neighbor and coworker is modest, but sizable spillovers emerge between similar individuals in these groups. Additional evidence suggests both leisure complementarities and the transmission of social norms as mechanisms behind retirement spillovers. Our findings imply that pension reforms have a large social multiplier, amplifying their overall impact on retirement behavior by 40%.
  • Link to the working paper

• Hidden redistribution in lifetime earnings: the role of differential mortality,
  with Aurel Mélard and Maxime Tô

  • Abstract: Differences in life expectancy between gender and income groups are large and generate significant implicit redistribution in lifetime earnings through pension systems. We use administrative data on the universe of private sector wage earners in France to quantify these effects. We establish two main results. In terms of between gender redistribution, we find that differential mortality – life expectancy at 55 is 5.7 years higher among women than among men – reduces lifetime income inequality between men and women: absent this differential in life expectancy, the pension gap between men and women would be 72% higher, in a lifetime perspective. Second, within gender, high income earners benefit from hidden lifetime redistribution due to higher life expectancy. We find a life expectancy gradient of 7.2 years between the extremes of the distribution among men, 1.8 years among women. Among men, this hidden redistribution more than offsets the overall progressivity of the pension system.
  • Link to the working paper

• The Effect of Adverse Life-Events on Income Trajectories,
  with Julie Tréguier, Maxime Tô, Wiljan van der Berge and Willem van der Wal

  • Abstract: This paper studies and compares the effect of different adverse life events – job loss, disability and health shocks, divorce and spousal death – on individuals’ income trajectories. We use an harmonized design across events in terms of methodology and data: matching difference-in-difference with exhaustive Dutch administrative registers. We assess the effect of adverse events on different margins. We compare their effect on primary and disposable household income in order to measure the public insurance to the shocks provided by the tax and transfer system. Both between different events and within different groups for a given event, we find that the importance of government insurance increases with the severity of the shock on primary income. However, we find that certain groups of the population are relatively less protected against adverse life events, such as young people facing a large health shock or secondary earners facing a divorce.
  • Link to the working paper