Do changes in pension incentives affect retirement? A longitudinal study of subjective retirement expectations

This paper investigates the responsiveness of individuals’ retirement decisions to forward-looking measures of pension accumulations. In contrast to previous research, we use within-person variation in retirement incentives and are able to control for unobserved heterogeneity in tastes for retiremen...

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Veröffentlicht in:Journal of public economics 2004-07, Vol.88 (7), p.1307-1333
Hauptverfasser: Chan, Sewin, Stevens, Ann Huff
Format: Artikel
Sprache:eng
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Zusammenfassung:This paper investigates the responsiveness of individuals’ retirement decisions to forward-looking measures of pension accumulations. In contrast to previous research, we use within-person variation in retirement incentives and are able to control for unobserved heterogeneity in tastes for retirement by studying a panel of subjective retirement expectations. We confirm that individuals do respond as expected to pension incentives, even when we control for individual fixed effects. However, the magnitude of these responses differs when estimated from models based on within-person versus cross-sectional variation: the inclusion of fixed effects reduces the response by about half.
ISSN:0047-2727
1879-2316
DOI:10.1016/S0047-2727(02)00223-2