How sensitive are retirement decisions to financial incentives?

A stated preference analysis

A.H.O. van Soest, H. Vonkova

Research output: Contribution to journalArticleScientificpeer-review

Abstract

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.
Original languageEnglish
Pages (from-to)246-264
JournalJournal of Applied Econometrics
Volume29
Issue number2
DOIs
Publication statusPublished - Mar 2014

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retirement
incentive
income
retirement age
pension
substitution
Netherlands
scenario
simulation
Preference analysis
Retirement
Financial incentives
Stated preference

Cite this

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How sensitive are retirement decisions to financial incentives? A stated preference analysis. / van Soest, A.H.O.; Vonkova, H.

In: Journal of Applied Econometrics, Vol. 29, No. 2, 03.2014, p. 246-264.

Research output: Contribution to journalArticleScientificpeer-review

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