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Individual Heterogeneity and Pension Choices: How to Communicate an Effective Message?

Giovanni Gallo (), Costanza Torricelli () and Arthur van Soest ()

Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) from Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi"

Abstract: We use the Elaboration Likelihood Model (ELM) to explain how communication influences pension choices in a heterogeneous population. We exploit the 2007 Italian reform that allowed transferring future severance pay contributions into a pension fund and was accompanied by an information campaign with a clear message. According to ELM, individuals follow either a “central route” or a “peripheral route” depending on their motivation and ability to process, and eventually change or retain their initial attitude. Based on data from the Bank of Italy Survey on Household Income and Wealth, we find that not only financial literacy plays a relevant role in the employees’ elaboration process, but also the individual’s comprehension of the specific choice object, the personal relevance of the decision, cognitive skills, and contextual elements (e.g. unions, employer pressure). These considerations have policy implications for the effectiveness of information messages in the pension domain.

Keywords: pension choices; Elaboration Likelihood Model; cognitive skills; contextual elements; financial literacy (search for similar items in EconPapers)
JEL-codes: A12 C25 D03 D14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age and nep-fle
Date: 2017-04
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Related works:
Working Paper: Individual Heterogeneity and Pension Choices: How to Communicate an Effective Message? (2017) Downloads
Working Paper: Individual heterogeneity and pension choices: How to communicate an effective message? (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:mod:wcefin:0062

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