Endogenous Pensions and Retirement Behavior

Randall Filer and Marjorie Honig

No 1547, CESifo Working Paper Series from CESifo

Abstract: This paper suggests that pension characteristics are simultaneously determined along with workers’ retirement ages. Both the age of pension eligibility and actual retirement age are determined by the productivity and marginal disutility of work, factors that are influenced by worker and job characteristics. This approach differs from previous studies of retirement that treat pensions as exogenous, implying that prior empirical work may have overestimated the responsiveness of retirement age to changes in pension structure, a possibility with obvious policy implications for efforts to raise the age of retirement. We find that, in the conventional single-equation framework, delaying the age of pension eligibility would significantly delay retirement. When treated in a recursive simultaneous system, however, age of pension eligibility retains no explanatory power.

Keywords: social security; early retirement; job characteristics; pension eligibility (search for similar items in EconPapers)
JEL-codes: H31 H55 J26 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: Endogenous Pensions and Retirement Behavior (2005)
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