The Effect of Increasing the Early Retirement Age on Savings Behavior Before Retirement

Stefan Etgeton, Björn Fischer-Weckemann and Han Ye

No 12744, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Facing a reduction in pension generosity, individuals can compensate the loss by working longer or saving more. This paper shows that the impact of changes in pension generosity on saving crucially depends on the possibility of prolonging future employment. Exploiting across cohort variation in expected pension wealth induced by a 3-year lift in early retirement age for women born after 1951 in Germany, we show evidence of a reduction in private savings rate and an increase in leisure consumptions in case of strong responses in future labor earnings.

Keywords: pension reform; early retirement age; savings; pension wealth (search for similar items in EconPapers)
JEL-codes: D14 J14 J26 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2019-11
New Economics Papers: this item is included in nep-age, nep-eur and nep-lab
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Published - published as 'The Effect of Increasing Retirement Age on Households' Savings and Consumption Expenditure' in: Journal of Public Economics, 2023, 221, 104845

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