Lifetime income redistribution by the old-age state pension in The Netherlands

This paper looks at how the Dutch General Old-Age Pensions Act impacts the distribution of equivalent lifetime income, using a dynamic cross-sectional microsimulation model. Considering both vertical and horizontal redistributional effects, the paper shows that lifetime redistribution is considerably smaller than the redistribution measured on the basis of a period approach. The horizontal lifetime redistribution is more important than the vertical one, but this effect is rather limited, in particular due to the increasing premium percentages in combination with the regressive nature of the contribution levying.