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Saving and Retirement Decisions with Pension Risk

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  • Andreas Wagener

Abstract

We analyze the impact of increased pension uncertainties on saving and retirement decisions, both in isolated and in joint decision problems. In the absence of other risks, saving is increased and retirement is delayed when social security pensions get more risky. If saving and retirement decisions are risky themselves, risk-vulnerable individuals will save less upon a higher pension risk; the effect on retirement is ambiguous. If saving and retirement decisions are made jointly, higher pension risks may cause a decline in precautionary saving or an earlier withdrawal from the labor force, but never both at the sametime.

Suggested Citation

  • Andreas Wagener, 2007. "Saving and Retirement Decisions with Pension Risk," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(1), pages 107-132, March.
    • Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200703)63:1_107:sardwp_2.0.tx_2-b
    DOI: 10.1628/001522107X186746
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    References listed on IDEAS

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    More about this item

    Keywords

    retirement; saving; social security risk; decisions under uncertainty;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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