Losses in the great recession: Dutch households under fire

  • Matthijs Triep Matthijs Triep

This thesis attempts to quantify relative lifetime consumption expenditure losses of five Dutch household cohorts of different birth years in the Great Recession. Using a calibrated partial equilibrium model, where households are subjected to age-specific labour income shocks and general asset (wealth) shocks, recession scenarios and a normal economy benchmark are simulated and compared. As our five birth cohorts (selection is based on their age in the pre-recession year 2007) feature different expected wage paths, wealth balances and remaining life spans, distinct dynamics drive their economic performance. Our results show the oldest cohort, 65+ in 2007, to be robustly off the worst in a temporary recession of ten years, while the youngest cohort, younger than 35, comes in second. Intermediate cohorts suffer the least losses in various scenarios. For a permanent recession we find the youngest cohort to have the largest relative consumption losses. The oldest households in this case are harmed the least.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.


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