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A Delayed Retirement Policy and Male Labor Supply: Evidence from the Entire Dutch Population

This paper studies the labor supply effects of a national delayed retirement policy introduced in 2009 in the Netherlands. The policy offers a reduction in taxes on labor income over each year in which retirement is delayed after the age of 62. I estimate the average effect of the policy on male labor supply as well as its responsiveness to the size of the incentive. Comparing differentially affected birth cohorts suggests that labor force participation increased by about 3.8 to 5.5 percentage points in the three years after introduction for cohorts that were eligible before the normal retirement age. I also find that a higher bonus induces a greater increase in participation and in the number of hours supplied by those working.