How Sensitive Are Retirement Decisions to Financial Incentives: A Stated Preference Analysis

Voňková, Hana () and Arthur van Soest ()
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Voňková, Hana: Tilburg University

No 4505, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: We study effects of financial incentives on the retirement age using stated preference data. Dutch survey respondents were given hypothetical retirement scenarios describing age(s) of (partial and full) retirement and replacement rate(s). A structural model is estimated in which utility is the discounted sum of within period utilities that depend on employment status and income. Parameters of the utility function vary with observed and unobserved characteristics. Simulations show that the income and substitution effects of pensions as a function of the retirement age are substantial and larger than according to studies using data on actual retirement decisions.

Keywords: pensions; flexible retirement; gradual retirement; stated choices (search for similar items in EconPapers)
JEL-codes: J22 J26 C81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-dcm and nep-lab
Date: 2009-10
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