HOW SENSITIVE ARE RETIREMENT DECISIONS TO FINANCIAL INCENTIVES? A STATED PREFERENCE ANALYSIS
Version of Record online: 24 JAN 2013
Copyright © 2013 John Wiley & Sons, Ltd.
Journal of Applied Econometrics
Volume 29, Issue 2, pages 246–264, March 2014
How to Cite
Van Soest, A. and Vonkova, H. (2014), HOW SENSITIVE ARE RETIREMENT DECISIONS TO FINANCIAL INCENTIVES? A STATED PREFERENCE ANALYSIS. J. Appl. Econ., 29: 246–264. doi: 10.1002/jae.2313
- Issue online: 7 MAR 2014
- Version of Record online: 24 JAN 2013
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.