Tax incentives to promote active ageing: The introduction of the doorwerkbonus in the Netherlands

Concerns about sustainability of the Dutch pension system have led policy makers during the last years to rethink the role of older workers by introducing a number of reforms designed to increase employment rates and to extend working life. In 2009, simultaneously with the implementation of other reforms, the Dutch government introduced a work-continuation bonus seeking to delay the retirement of older workers. The so-called doorwerkbonus was applicable to individuals who continued working after the age of 62 and involved a discount on taxable income. The objective of this thesis is therefore to carry out an ex-post evaluation of this reform, more specifically, to examine to which extent the expected retirement age of older workers has been affected by the introduction of the doorwerkbonus.Using data from LISS panel for the years 2008-2012 and applying a difference-in-differences approach, the study has provided significant evidence to confirm that the reform led to an increase of the expected retirement age of older workers relative to their younger peers. On average, after the reform, older workers expect to retire approximately one year and seven month later than younger workers. Despite the impact of the reform becomes smaller when the model is controlled for unobserved factors, the main conclusions of the study remain unaffected.