The effects of financial incentives and disincentives on teachers' retirement decisions: Evidence from the 2003 French pension reform

Denis Fougere and Pierre Gouëdard ()
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Pierre Gouëdard: OCDE - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po

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Abstract: Using a sample of 12,463 high-school teachers, we evaluate the impact of the 2003 reform of the French national pension scheme. Considering the progressive implementation of the reform, we cannot use a reduced-form approach. Consequently, we estimate an option value modelà la Stock and Wise (Econometrica, 1990). Structural estimates suggest that teachers are slightly risk averse, that their quarterly discount factor is close to unity and that their preference for leisure is comparable to the one found by Stock and Wise (1990). Simulations imply that teachers respond significantly to monetary incentives offered to those who continue working after the legal retirement age. Our partial effectiveness analysis shows that the reform has progressively increased the average retirement age up to 61. This shift in the retirement age distribution should have resulted in year 2010 in a 6.37% decrease of public spendings associated with high-school teachers' pensions (except income taxes and other types of expenses, such as those relating to health, social security and widowhood).

Keywords: option value model; pension reform; structural evaluation (search for similar items in EconPapers)
Date: 2021-10
New Economics Papers: this item is included in nep-age
Note: View the original document on HAL open archive server: https://hal.science/hal-03465859
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Working Paper: The effects of financial incentives and disincentives on teachers' retirement decisions: Evidence from the 2003 French pension reform (2021)
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