This paper presents new evidence on the effects of retirement benefits on labor force participation decisions. The analysis is based on a mandated rule for employer-provided retirement benefits in Austria that creates discontinuities in the incentives for workers to delay retirement. The paper presents graphical evidence on labor supply responses and develops a conceptual framework that accounts for the dynamic incentive structure and for adjustment frictions. Using bunching methods, a semi-elasticity of participation is estimated, which ranges from 0.1 to 0.3 and is highest for incentives targeted at a delay in retirement by 6 to 9 months.
Manoli, Day, and Andrea Weber.
"Nonparametric Evidence on the Effects of Financial Incentives on Retirement Decisions."
American Economic Journal: Economic Policy,
Household Saving; Personal Finance
Intertemporal Household Choice; Life Cycle Models and Saving
Social Security and Public Pensions
Time Allocation and Labor Supply
Retirement; Retirement Policies
Unemployment Insurance; Severance Pay; Plant Closings