Nonparametric Evidence on the Effects of Financial Incentives on Retirement Decisions
American Economic Journal: Economic Policy
vol. 8,
no. 4, November 2016
(pp. 160-82)
Abstract
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.Citation
Manoli, Day, and Andrea Weber. 2016. "Nonparametric Evidence on the Effects of Financial Incentives on Retirement Decisions." American Economic Journal: Economic Policy, 8 (4): 160-82. DOI: 10.1257/pol.20140209Additional Materials
JEL Classification
- D14 Household Saving; Personal Finance
- D15 Intertemporal Household Choice; Life Cycle Models and Saving
- H55 Social Security and Public Pensions
- J22 Time Allocation and Labor Supply
- J26 Retirement; Retirement Policies
- J65 Unemployment Insurance; Severance Pay; Plant Closings
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