Seminar: Labour market decisions of the Self-employed in the Netherlands at the Statutory Retirement Age

We investigate retirement decisions of the self-employed in the Netherlands usingadministrative data. We focus on the time period around which individuals reach the statutory retirement age (SRA, 65 years in most cases). After the statutory retirement age, each Dutch resident receives the Old Age State Pension annuity (AOW), providing an income at the subsistence level. Both the timing and the magnitude of this state pension are well known in advance. According to a rational behavior, receiving AOW should therefore have no impact on labour supply choices. While employees often face the demand side restriction of mandatory retirement, this does not apply to the selfemployed. We investigate whether retirement and earnings of the self-employed change at the SRA and whether any such change varies with, e.g., the level of financial wealth. We find a peak in retirement at the time at the SRA. The evidence suggests that the benchmark of retiring at 65 is acting as a driver, due to anchoring or a social norm.