Why Forcing People to Save for Retirement may Backfire

Monika Bütler (), Olivia Huguenin and Federica Teppa

No 1458, CESifo Working Paper Series from CESifo

Abstract: If individuals are unable or unwilling to borrow, a higher than desired second pillar pension capital may induce people to retire earlier than they would have in the absence of such a scheme. Individuals thus leave the workforce as soon as the retirement income is deemed sufficient and the pension plan avails withdrawal of benefits. We provide evidence using individual data from a selection of Swiss pension funds, allowing us to perfectly control for pension scheme details. Our findings suggest that affordability is a key determinant in the retirement decisions. The higher the accumulated pension capital, the earlier individuals tend to leave the workforce.

Keywords: occupational pension; retirement decision; duration models (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (10)

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Working Paper: Why Forcing People to Save for Retirement May Backfire (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1458

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