What Triggers Early Retirement? Results from Swiss Pension Funds
AbstractEarly retirement is predominantly considered as the result of incentives set by social security and the tax system. But people seem to retire early even in the absence of such distortions, as the Swiss example demonstrates. We look for determinants of early retirement, in particular the role of lifetime income and family status, using individual data from a selection of Swiss pension funds. Our findings suggest that affordability is a key determinant in retirement decisions: more affluent men and – to a much smaller extent – women tend to leave the work force earlier. The fact that early retirement has become much more prevalent in the last 15 years is another indicator for the importance of affordability as Switzerland’s funded pension system has matured over that period leading to higher effective replacement rates. We also find sizeable differences in retirement behaviour across marital status. These may be explained by a constrained rational choice based on differential mortality and the desire of couples to coordinate their entry into retirement.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4394.
Date of creation: May 2004
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- Monika Bütler & Olivia Huguenin & Federica Teppa, 2004. "What Triggers Early Retirement. Results from Swiss Pension Funds," CeRP Working Papers 35, Center for Research on Pensions and Welfare Policies, Turin (Italy).
- Monika Bütler & Olivia Huguenin & Federica Teppa, 2005. "What Triggers Early Retirement? Results from Swiss Pension Funds," DNB Working Papers 041, Netherlands Central Bank, Research Department.
- Monika BÜTLER & Olivia HUGUENIN & Federica TEPPA, 2004. "What Triggers Early Retirement ? Results from Swiss Pension Funds," Cahiers de Recherches Economiques du DÃ©partement d'EconomÃ©trie et d'Economie politique (DEEP) 04.04, Université de Lausanne, Faculté des HEC, DEEP.
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
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