Does the Actuarial Adjustment for Pension Delay Affect Retirement and Claiming Decisions?

Devon Gorry, Kyung Min Lee and Sita Slavov

No 27508, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate the impact of more generous terms for delaying state pensions on claiming and labor supply in the United Kingdom using a 2005 policy change. First, we find that the more generous delay terms reduced the fraction of males receiving pensions at the earliest eligibility age and shortly after. While there are also post-policy changes in women’s claiming behavior, further investigation reveals that these changes do not coincide with the start of the policy and are therefore less likely to be causal effects. Second, we find post-policy increases in labor supply around the earliest pension eligibility age, followed by post-policy decreases in labor supply at older ages. While these labor supply changes cannot easily be separated from longer-term trends, they are consistent with some individuals choosing to work longer to finance pension delay, followed by some individuals retiring earlier due to the income effect from more generous pension benefits. Finally, we find that among individuals who delayed pensions for up to 5 years, about 3 percent of individuals took their gains from delay as lump sums, an option made available under the policy changes.

JEL-codes: H55 J26 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-age, nep-lma and nep-pbe
Note: AG PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published as Devon Gorry & Kyung Min Lee & Sita Nataraj Slavov, 2023. "Does the actuarial adjustment for pension delay affect retirement and claiming decisions?," Journal of Pension Economics and Finance, vol 22(4), pages 590-603.

Downloads: (external link)
http://www.nber.org/papers/w27508.pdf (application/pdf)

Related works:
Journal Article: Does the actuarial adjustment for pension delay affect retirement and claiming decisions? (2023)
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:nbr:nberwo:27508

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w27508

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().