Reference Points for Retirement Behavior: Evidence From German Pension Discontinuities

Arthur Seibold ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: This paper studies the large concentration of retirement behavior around statutory retirement ages, a puzzling stylized fact. To investigate this fact, I estimate bunching responses to 644 pension benefit discontinuities, using administrative data on the universe of German retirees. Financial incentives alone cannot explain retirement patterns, but there is a large direct effect of statutory retirement ages. I argue that the framing of statutory ages as reference points for retirement provides a plausible explanation. Simulations based on a model with reference dependence highlight that shifting statutory ages via pension reforms is an effective policy to influence retirement behavior.

Keywords: Pensions; retirement; reference dependence (search for similar items in EconPapers)
JEL-codes: D91 H55 J26 (search for similar items in EconPapers)
Pages: 94
Date: 2020-10
New Economics Papers: this item is included in nep-age and nep-eur
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2020_226

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