The Delayed Retirement Credit (Doorwerkbonus) and Labor Supply in the Netherlands

Alice Zulkarnain, Graduate Center, City University of New York (CUNY) and CUNY Institute for Demographic Research (CIDR)

The Netherlands is one of many countries facing an aging population. Concerns have grown over the sustainability of their public pay-as-you-go social system and low rates of labor force participation among older workers, resulting in reforms. In 2009, the Netherlands introduced the “Doorwerkbonus”, a form of Delayed Retirement Credit (DRC). The policy offers a fiscal discount on taxable income over each year in which retirement is delayed to encourage work among persons aged 62 and older. This paper evaluates the effect of the “Doorwerkbonus” (Dutch DRC) on the labor supply of older Dutch persons using a Difference-In-Differences approach. Preliminary analyses suggest a reduction in retirement rates.