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Effects of Future Pension Benefits on Pre-retirement Labor Supply: Evidence from Chile

Oscar Becerra ()

Documentos CEDE from Universidad de los Andes - CEDE

Abstract: In this paper, I estimate the effect of future pension benefits on pre-retirement labor supply for a representative sample of Chilean workers. Using non-linear patterns in pension benefit formulas and a reform that changed non-contributory pensions, I estimate the effect of pension accrual and expected pension wealth on labor force and contributory-sector participation, labor earnings, and hours worked. I find that the effect is related to the impact of pension accrual on the probability to contribute to the pension system. The effect is heterogeneous, and is concentrated among middle-age workers, low-skilled workers, workers with no savings, and workers with higher financial literacy.

Keywords: Labor supply; pension benefits; financial literacy. (search for similar items in EconPapers)
JEL-codes: H21 J26 J32 (search for similar items in EconPapers)
Pages: 37
Date: 2018-11-07
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