The Planned Retirement Age of Self-Employed and Employees

Self-employed are becoming an essential part of the Dutch labour market. Nowadays, one out of ten workers is self-employed and the expectation is that this ratio will increase. Many self-employed do not accumulate supplementary pensions, while they prefer to have a happy old age like employees. The share of self-employed in the Dutch labour force has increased faster than the average in the European Union in the last decade. As a result, consequences for the labour market, taxes, and social security systems in the Netherlands may be greater than in
other European countries.
This research addresses the question to what extent the planned retirement age of self-employed and employees is affected by working conditions. Data from 2015 of the Study on Transitions in Employment, Ability and Motivation of Dutch Research Institute TNO is used to present an understanding in the relationship between working conditions and the planned retirement age. The research group consists of 562 self-employed without employees and 7,754 employees, from 45 to 70 years old. First, the question that is addressed is whether the planned retirement age of self-employed and employees differ. Second, the question that is addressed is whether these differences are due to the working conditions of self-employed and employees. Three regression analyses are conducted: a multiple regression analysis for employees, a multiple regression analysis for self-employed, and a multiple regression analysis with interaction terms. Furthermore, an Oaxaca decomposition is established to explain whether the differences in the average planned retirement age of self-employed and employees are due to differences in the mean values of the working conditions, or due to differences in the effects of the working conditions.
The main conclusion of this research is that working conditions to a certain extent are associated with the planned retirement age of self-employed and employees. The research shows that there are actual differences in the planned retirement age of self-employed and
employees. Also, the working conditions partly differ between self-employed and employees.
Especially financial support shows a statistically significant difference in the effect on the planned retirement age of self-employed and employees. The negative effect of a good salary on the planned retirement age of self-employed is greater than the negative effect of a good
salary on the planned retirement age of employees. The better their financial support, the earlier self-employed plan to retire. This research is an important addition to previous studies and shows the importance of research on self-employment. The research contributes to the
debate of the adequacy of the retirement accumulation of self-employed and a future-proof pension system for self-employed and employees.