12th February 2021 (12pm)
« Unemployment versus Early Retirement after Job Loss: An Assessment of the Belgian Pre-Pension Program »
Octave De Brouwer (ULB)
Most OECD countries provide extended and/or more generous unemployment schemes at the end of the career. These schemes are sometimes referred as “unemployment tunnels” as they allow laid off workers to bridge the gap between job loss and the old age pension. In this study, we explore the effects of extended unemployment benefits after an exogenous job loss event on workers’ labour market trajectories, mortality and spouse’ labour supply. We apply our study to the Belgian “pre-pension” program and capture the causal effect of pre-pension eligibility by exploiting the decrease in the statutory age for pre-pension access during mass layoffs. Overall, we find that displaced workers who do not enter pre-pension exhibit higher rates of labour participation but also significantly higher rates of participation into the unemployment and disability programs.
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25th February 2021 – from 12:30 until 13:30 (Microsoft Teams)
Seminar (CEREC-CAPE) : Housing market responses to the mortgage interest deduction
by Sven Damen (University of Antwerp)
Governments around the world use tax subsidies to stimulate homeownership. Whether or not these subsidies affect homeownership crucially depends on the degree of capitalization into house prices. We study the effects of a large reduction in the mortgage interest and capital deduction (MICD) in Flanders. In 2015, the Belgian regions became responsible for the MICD after having been under federal control for nearly a decade. What followed was a series of reforms in which Flanders drastically reduced the MICD while Wallonia left the subsidy unaffected for the average home buyer. Exploiting this variation in a difference-in-differences analysis we estimate the impact on prices, sales and construction permits. We find that the changes in the average tax subsidy largely capitalize both in the price of single family housing and the price of land. We find no effect of the reduction in the MICD on sales and building permits for single family housing in line with expectations for an inelastic housing market. Due to the large capitalization in house and land prices, tax subsidies may not be effective in areas with a price-inelastic housing supply.
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