What You Don?t Know Can?t Help You: Pension Knowledge and Retirement Decision Making

Ann Stevens and Sewin Chan
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Sewin Chan: Department of Economics, University of California Davis

No 20, Working Papers from University of California, Davis, Department of Economics

Abstract: This paper provides an answer to an important empirical puzzle in the retirementliterature: while most people know little about their own pension plans, retirement behavior isstrongly affected by pension incentives. We combine administrative and self-reported pensiondata to measure the retirement response to actual and perceived financial incentives. Whilevirtually all recent empirical work has relied on administrative- or employer-reported data, wedocument an important role for self-reported pension data in determining retirement behavior.Well-informed individuals are five times more responsive to pension incentives than the average.In contrast, ill-informed individuals respond to their own misperceptions of the incentives ratherthan being unresponsive to any measured incentives.

Keywords: pension plans; retirement behavior (search for similar items in EconPapers)
JEL-codes: H55 J26 (search for similar items in EconPapers)
Pages: 37
Date: 2005-09-30
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: What You Don't Know Can't Help You: Pension Knowledge and Retirement Decision-Making (2008)
Working Paper: What You Don't Know Can't Help You: Pension Knowledge and Retirement Decision Making (2003)
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