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Financial Incentives in the Austrian PAYG-Pension System: Micro-Estimation

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Author Info

  • Roman Rabb

    ()
    (ICSG - Irish Centre for Social Gerontology, Department of Economics, National University of Ireland Galway)

Abstract

The scope of this paper is to investigate the impact of financial incentives on the retirement decision of private sector workers in Austria. How do financial incentives embedded in the Austrian pension system impact individual retirement behavior? We are using a unique data set of individual social insurance spells. Micro-estimating the impact of financial incentives on the probability of retirement shows that the behavioral response to financial incentives in Austria is relatively large in international comparison. Also, there are striking behavioral differences between men and women. Using the estimates to simulate the response to reform shows that actual retirement ages could be most successfully brought up by a 6 percentage point deduction in pension benefits per year of early retirement.

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Bibliographic Info

Paper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper0902.

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Length: 36 pages
Date of creation: 01 Feb 2009
Date of revision:
Handle: RePEc:ays:ispwps:paper0902

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Related research

Keywords: Models with Panel Data; Discrete Regression and Qualitative Choice Models; Social Security and Public Pensions; Time Allocation and Labor Supply; Retirement; Retirement Policies.;

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References

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  1. Axel Börsch-Supan & Reinhold Schnabel & Simone Kohnz & Giovanni Mastrobuoni, 2004. "Micro-Modeling of Retirement Decisions in Germany," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 285-344 National Bureau of Economic Research, Inc.
  2. Ronan Mahieu & Didier Blanchet, 2004. "Estimating Models of Retirement Behavior on French Data," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 235-284 National Bureau of Economic Research, Inc.
  3. Falkinger, Josef & Winter-Ebmer, Rudolf & Zweimüller, Josef, 1994. "Retirement of Spouses and Social Security Reform," CEPR Discussion Papers 855, C.E.P.R. Discussion Papers.
  4. Courtney Coile & Jonathan Gruber, 2004. "The Effect of Social Security on Retirement in the United States," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 691-730 National Bureau of Economic Research, Inc.
  5. Gary S. Fields & Olivia S. Mitchell, 1984. "Retirement, Pensions, and Social Security," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262060914, December.
  6. Samwick, Andrew A., 1998. "New evidence on pensions, social security, and the timing of retirement," Journal of Public Economics, Elsevier, vol. 70(2), pages 207-236, November.
  7. Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 905-26, Sept./Oct.
  8. Palme, Mårten & Svensson, Ingemar, 2001. "Income Security Programs and Retirement in Sweden," Working Paper Series in Economics and Finance 422, Stockholm School of Economics.
  9. Jonathan Gruber & David A. Wise, 2002. "Social Security Programs and Retirement Around the World: Micro Estimation," NBER Working Papers 9407, National Bureau of Economic Research, Inc.
  10. Helmut Hofer & Reinhard Koman, 2006. "Social security and retirement incentives in Austria," Empirica, Springer, vol. 33(5), pages 285-313, December.
  11. Courtney Coile & Jonathan Gruber, 2000. "Social Security and Retirement," NBER Working Papers 7830, National Bureau of Economic Research, Inc.
  12. 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.
  13. Markus Knell & Walpurga Köhler-Töglhofer & Doris Prammer, 2006. "The Austrian Pension System – How Recent Reforms Have Changed Fiscal Sustainability and Pension Benefits," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 69–93.
  14. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1, May.
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Cited by:
  1. Eichhorst, Werner & Gerard, Maarten & Kendzia, Michael J. & Mayrhuber, Christine & Nielsen, Conny & Rünstler, Gerhard & Url, Thomas, 2011. "Report No. 42: Pension Systems in the EU – Contingent Liabilities and Assets in the Public and Private Sector," IZA Research Reports 42, Institute for the Study of Labor (IZA).

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