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Reference Points for Retirement Behavior: Evidence from German Pension Discontinuities.
- Source :
- American Economic Review; Apr2021, Vol. 111 Issue 4, p1126-1165, 40p
- Publication Year :
- 2021
-
Abstract
- This paper studies the large concentration of retirement behavior around statutory retirement ages, a puzzling stylized fact. To investigate this fact, I estimate bunching responses to 644 pension benefit discontinuities, using administrative data on the universe of German retirees. Financial incentives alone cannot explain retirement patterns, but there is a large direct effect of statutory retirement ages. I argue that the framing of statutory ages as reference points for retirement provides a plausible explanation. Simulations based on a model with reference dependence highlight that shifting statutory ages via pension reforms is an effective policy to influence retirement behavior. (JEL D91, H55, J26, J32) [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00028282
- Volume :
- 111
- Issue :
- 4
- Database :
- Complementary Index
- Journal :
- American Economic Review
- Publication Type :
- Academic Journal
- Accession number :
- 149555019
- Full Text :
- https://doi.org/10.1257/aer.20191136