WORKSHOP AGIR HELSINKI JUNE 12-13, 2003 AGIR WP3: Determinants of retirement J. MESTDAGH – M. LAMBRECHT Federal Planning Bureau Economic Analysis & Forecasts

Data requirement ETLA Time use survey data (presentation) APW wages & pension levels Social security contributions (presentation) Income taxes Consumption taxes Wages household personnel (presentation)

Time use Survey Time Use Survey NIS individuals in 4275 households By filling in diaries per 10 minutes 271 categories of activities By gender, age group, employment status, attained level of education, family situation and context

Time use survey: drawbacks Only averages available, not on individual level Cross-sectional survey, not longitudinal

Categories of activities 5 main categories of activities -Household work -Paid work -Leisure time -Basic needs -Travel time

Time use of men Hours spent on activity per week by working (FT) and retired men

Share in total time - men Working menRetired men

Time use of women Hours spent on activity per week by working (FT) and retired women

Share in total time - women Working womenRetired women

Conclusion Comparing time use of full time workers and retirees (both men and women) shows that retired people spend more time on - household work - leisure time - basic needs than active people do Attention: no longitudinal study!

FT working men and women Hours per week spent on activity

Retired men and women Hours per week spent on activity

Conclusions Comparing time use of men and women (both active people and retirees) shows that women spend more time on - household work - basic needs than men do. But gap for household work is smaller when retired

Theories of time use -Dual burden of work -Specialization of work -Continuity of life time patterns

Dual burden of work  not likely, at all ages difference between gender in total burden (paid + household) of work small

Specialization between gender Possible : leisure more or less equal, men more paid work, women more household work

Continuity of life time patterns No: significant difference in time use between active and retired people (cross-sectional)

Social security contributions Employee contributions: % for all employees Employer contributions % for blue collar workers (includes annual vacation) % for white collar workers

Social Security contributions 3 categories of household personnel a)Less than 4 hrs a day or 24 hrs a week : no contributions due ( 96% of all personnel) b)More than 24 hrs a week and considered blue-collar worker: contributions due c)More than 24 hrs a week and considered white-collar worker: contributions due

Wages household personnel No reliable data on wages household personnel since most household personnel doesn’t have to pay SS contributions and are thus not included in statistics Alternative : minimum wages (source : Ministry of Labour and Employment)

Wages household personnel Only considering situation in which no SS contributions have to be paid (96% of cases) (in euro): Wage cost employer Gross wage Income taxes3.18 (45%)2.92 (40%) Net wage