Journal of Applied Econometrics · 2013 · 56 citations · 17 references
Public AffairsEconomicsBehavioral EconomicsBehavioral FinanceFinancial EconomicsOld-age Income SecurityPension FundsPension InsurancePension PolicyRetirement PolicyRisk AversionReplacement Income RateRetirementRetirement BehaviorRetirement Income Replacement RatesRetirement Saving DecisionsUnobserved HeterogeneityUnobserved Individual EffectsUtility Function Estimation
The study examines how financial incentives influence retirement decisions using stated preference data. The authors used a Dutch survey with hypothetical retirement scenarios and estimated a stylized utility model where discounted within‑period utilities depend on employment status, income, and vary with observed and unobserved characteristics. Simulations reveal that pension income and substitution effects across retirement ages are substantial and exceed those found in studies based on actual retirement data in the Netherlands. © 2013 John Wiley & Sons, Ltd.
SUMMARY We study the effects of financial incentives on retirement decisions using stated preference data. Dutch survey respondents were given hypothetical retirement scenarios describing age(s) of (partial and full) retirement and replacement rate(s). A stylized model is estimated in which utility is the discounted sum of within‐period utilities that depend on employment status and income. Parameters of the utility function vary with observed and unobserved characteristics. Simulations show that the income and substitution effects of pensions as a function of the retirement age are substantial and larger than according to studies using data on actual retirement decisions in the Netherlands. Copyright © 2013 John Wiley & Sons, Ltd.
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Jordan J. Louviere, David A. Hensher, Joffre Swait́ · Cambridge University Press eBooks · 2000 · 484 citations