Advanced Search
MyIDEAS: Login to save this article or follow this journal

The importance of financial incentives on retirement choices: New evidence for Italy

Contents:

Author Info

  • Belloni, Michele
  • Alessie, Rob

Abstract

This study exploits a new dataset to quantify the effect of financial incentives on retirement choices. This dataset contains--for the first time for Italy--information on seniority. The effects of marginal incentives and social security wealth (SSW) on retirement go in the expected direction; when employees become eligible for pension benefits, the change in financial incentives they experience is so great that their retirement probability increases by 30 percentage points. We also find that the procedure used in previous Italian studies to impute seniority leads to a considerable overestimation of that variable and of SSW. We show that, due to these measurement errors, the estimate of the SSW coefficient takes the wrong sign. A comparison of retirement studies across countries (see Gruber and Wise [Gruber, J., and Wise, D., (2004). Social Security Programs and Retirement Around the World: Micro-Estimation, NBER. The University of Chicago Press, Chicago and London.]) provides prima facie evidence that a lack of good quality data often leads to wrongly signed estimates of the SSW coefficient.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6VFD-4VNH3TH-1/2/099a872e9c1a2fc649c51710dd08d418
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 16 (2009)
Issue (Month): 5 (October)
Pages: 578-588

as in new window
Handle: RePEc:eee:labeco:v:16:y:2009:i:5:p:578-588

Contact details of provider:
Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Retirement Social security wealth Seniority Unobserved heterogeneity;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Chan, Sewin & Stevens, Ann Huff, 2004. "Do changes in pension incentives affect retirement? A longitudinal study of subjective retirement expectations," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1307-1333, July.
  2. Deaton, A.S. & Paxson, C.H., 1992. "Saving, Growth, and Aging in Taiwan," Papers 161, Princeton, Woodrow Wilson School - Development Studies.
  3. Didier Blanchet & Louis-Paul Pele, 1999. "Social Security and Retirement in France," NBER Chapters, in: Social Security and Retirement around the World, pages 101-133 National Bureau of Economic Research, Inc.
  4. Bottazzi, Renata & Jappelli, Tullio & Padula, Mario, 2006. "Retirement expectations, pension reforms, and their impact on private wealth accumulation," CFS Working Paper Series 2006/10, Center for Financial Studies (CFS).
  5. Agar Brugiavini & Franco Peracchi, 2008. "Fiscal Implications of Pension Reforms in Italy," Working Papers 2008_30, Department of Economics, University of Venice "Ca' Foscari".
  6. Börsch-Supan, Axel & Schnabel, Reinhold, 1997. "Social security and retirement in germany," Sonderforschungsbereich 504 Publications 97-20, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  7. Peter Diamond & Jonathan Gruber, 1999. "Social Security and Retirement in the United States," NBER Chapters, in: Social Security and Retirement around the World, pages 437-473 National Bureau of Economic Research, Inc.
  8. Klaas de Vos & Arie Kapteyn, 2004. "Incentives and Exit Routes to Retirement in the Netherlands," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 461-498 National Bureau of Economic Research, Inc.
  9. Randall K. Filer & Marjorie Honig, 2005. "Endogenous Pensions and Retirement Behavior," Economics Working Paper Archive at Hunter College 410, Hunter College Department of Economics.
  10. James H. Stock & David A. Wise, 1988. "Pensions, The Option Value of Work, and Retirement," NBER Working Papers 2686, National Bureau of Economic Research, Inc.
  11. Bloemen, Hans, 2008. "Private Wealth and Job Exit at Older Age: A Random Effects Model," IZA Discussion Papers 3386, Institute for the Study of Labor (IZA).
  12. Raffaele Miniaci, 1998. "Microeconometric Analysis of the Retirement Decision: Italy," OECD Economics Department Working Papers 205, OECD Publishing.
  13. Agar Brugiavini & Franco Peracchi, 2003. "Social Security Wealth and Retirement Decisions in Italy," LABOUR, CEIS, vol. 17(SpecialIs), pages 79-114, 08.
  14. Agar Brugiavini, 1999. "Social Security and Retirement in Italy," NBER Chapters, in: Social Security and Retirement around the World, pages 181-237 National Bureau of Economic Research, Inc.
  15. Courtney Coile & Jonathan Gruber, 2000. "Social Security Incentives for Retirement," NBER Working Papers 7651, National Bureau of Economic Research, Inc.
  16. Agar Brugiavini & Franco Peracchi, 2004. "Micro-Modeling of Retirement Behavior in Italy," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 345-398 National Bureau of Economic Research, Inc.
  17. Spataro, Luca, 2005. "Social security incentives and retirement decisions in Italy: An empirical insight," Research in Economics, Elsevier, vol. 59(3), pages 223-256, September.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Alexander M. Danzer, 2010. "Retirement Responses to a Generous Pension Reform: Evidence from a Natural Experiment in Eastern Europe," ESCIRRU Working Papers 23, DIW Berlin, German Institute for Economic Research.
  2. Michele Belloni & Rob Alessie, 2013. "Retirement Choices in Italy: What an Option Value Model Tells Us," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(4), pages 499-527, 08.
  3. repec:dgr:uvatin:2010102 is not listed on IDEAS
  4. Peri, Giovanni & Romiti, Agnese & Rossi, Mariacristina, 2013. "Immigrants, Household Production and Women's Retirement," IZA Discussion Papers 7549, Institute for the Study of Labor (IZA).
  5. Michele Belloni & Rob Alessie & Adriaan Kalwij & Chiara Marinacci, 2012. "Lifetime income and old age mortality risk in Italy over two decades," CeRP Working Papers 129, Center for Research on Pensions and Welfare Policies, Turin (Italy).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:labeco:v:16:y:2009:i:5:p:578-588. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.