Do changes in pension incentives affect retirement? A longitudinal study of subjective retirement expectations

Sewin Chan; Ann Huff Stevens

doi:10.1016/S0047-2727(02)00223-2

Do changes in pension incentives affect retirement? A longitudinal study of subjective retirement expectations

Sewin Chan, Ann Huff Stevens

Research output: Contribution to journal › Article › peer-review

Abstract

This paper investigates the responsiveness of individuals' retirement decisions to forward-looking measures of pension accumulations. In contrast to previous research, we use within-person variation in retirement incentives and are able to control for unobserved heterogeneity in tastes for retirement by studying a panel of subjective retirement expectations. We confirm that individuals do respond as expected to pension incentives, even when we control for individual fixed effects. However, the magnitude of these responses differs when estimated from models based on within-person versus cross-sectional variation: the inclusion of fixed effects reduces the response by about half.

Original language	English (US)
Pages (from-to)	1307-1333
Number of pages	27
Journal	Journal of Public Economics
Volume	88
Issue number	7-8
DOIs	https://doi.org/10.1016/S0047-2727(02)00223-2
State	Published - Jul 2004

Keywords

Pension incentives
Retirement
Subjective retirement expectations

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/S0047-2727(02)00223-2

Cite this

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title = "Do changes in pension incentives affect retirement? A longitudinal study of subjective retirement expectations",

abstract = "This paper investigates the responsiveness of individuals' retirement decisions to forward-looking measures of pension accumulations. In contrast to previous research, we use within-person variation in retirement incentives and are able to control for unobserved heterogeneity in tastes for retirement by studying a panel of subjective retirement expectations. We confirm that individuals do respond as expected to pension incentives, even when we control for individual fixed effects. However, the magnitude of these responses differs when estimated from models based on within-person versus cross-sectional variation: the inclusion of fixed effects reduces the response by about half.",

keywords = "Pension incentives, Retirement, Subjective retirement expectations",

author = "Sewin Chan and Stevens, {Ann Huff}",

note = "Funding Information: The authors thank Stephen Haider, Ron Miller, Jonathan Gruber and seminar participants at Brown University, University of California, Davis, University of Connecticut, Hunter College, University of Maryland, University of Michigan, New York University, University of Toronto and Yale University for their comments and discussions, and gratefully acknowledge financial support from the National Science Foundation, grants 9905275 and 9907824. Excellent research assistance was provided by Min Qi and Matthew Johnson. A previous version of this paper was circulated under the title {\textquoteleft}Retirement incentives and expectations.{\textquoteright} ",

year = "2004",

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doi = "10.1016/S0047-2727(02)00223-2",

language = "English (US)",

volume = "88",

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journal = "Journal of Public Economics",

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AU - Stevens, Ann Huff

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PY - 2004/7

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N2 - This paper investigates the responsiveness of individuals' retirement decisions to forward-looking measures of pension accumulations. In contrast to previous research, we use within-person variation in retirement incentives and are able to control for unobserved heterogeneity in tastes for retirement by studying a panel of subjective retirement expectations. We confirm that individuals do respond as expected to pension incentives, even when we control for individual fixed effects. However, the magnitude of these responses differs when estimated from models based on within-person versus cross-sectional variation: the inclusion of fixed effects reduces the response by about half.

AB - This paper investigates the responsiveness of individuals' retirement decisions to forward-looking measures of pension accumulations. In contrast to previous research, we use within-person variation in retirement incentives and are able to control for unobserved heterogeneity in tastes for retirement by studying a panel of subjective retirement expectations. We confirm that individuals do respond as expected to pension incentives, even when we control for individual fixed effects. However, the magnitude of these responses differs when estimated from models based on within-person versus cross-sectional variation: the inclusion of fixed effects reduces the response by about half.

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KW - Subjective retirement expectations

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Do changes in pension incentives affect retirement? A longitudinal study of subjective retirement expectations

Abstract

Keywords

ASJC Scopus subject areas

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