EconPapers    
Economics at your fingertips  
 

Redistribution of Individual Pension Wealth to Survivor Pensions: Evidence from a Stated Preferences Analysis

Andries de Grip (), Didier Fouarge () and Raymond Montizaan ()

No 12625, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Pension schemes in the Netherlands allow workers to redistribute their own pension wealth to increase the survivor pension of their partner. However, due to lacking communication and knowledge of survivor pensions among workers, and also due to the lack of transparent products and choice architecture, redistribution remains limited. This paper uses a stated preferences experiment that is explicitly designed for workers with a partner in the age group of 55 to 65 years to elicit their pension redistribution preferences. We find that, on average, the preferred pension wealth redistribution amounts to 50%. 35% of all individuals have such a preference. 33% of all individuals would prefer less redistribution, and 32% percent prefers to redistribute more pension income to the partner upon one's death. We further show that total family income during working life does not affect the redistribution to survivor pensions. However, the distribution of the contribution to total family income before retirement across partners, as well as the survival likelihood of the partner and the number of years the partner is expected to survive, have a significant causal impact on the preferred pension redistribution decision. The preference for redistribution to survivor pensions also depends significantly on personal characteristics, preferences and social attitude. Males have a significantly stronger preference for redistribution compared to females. Moreover, forward-looking, more risk averse and more altruistic individuals have a stronger preference to redistribute part of their pension wealth to a survivor pension. Finally, in particular when employees have the perception that their partner is more forward looking, they are willing to invest more in a survivor pension.

Keywords: stated preferences experiment; redistribution of pension wealth; survivors pension; economic preferences (search for similar items in EconPapers)
JEL-codes: J14 J26 D31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-dcm, nep-eur and nep-exp
Date: 2019-09
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Forthcoming in: Journal of Economic Behavior & Organization

Downloads: (external link)
http://ftp.iza.org/dp12625.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp12625

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().

 
Page updated 2019-12-05
Handle: RePEc:iza:izadps:dp12625