The Importance of Financial Incentives on Retirement Choices
AbstractThis study exploits a new dataset in order to quantify the effect of financial incentives on retirement choices. This dataset contains for the first time in Italy information on seniority. In accordance with the general finding in Gruber and Wise (2004), we find that financial incentives have an effect on retirement. The effect goes in the expected direction; when employees become eligible for pension benefits the change in financial incentives they experience is so high that their retirement probability increases in a sizable way. We also find that the procedure to impute seniority used in previous studies leads to a sizable measurement error. Due to this measurement error, the key parameters of the model are inconsistently estimated. Our sensitivity analysis suggests that the lack of appropriate information on seniority is an important reason for the unclear evidence so far obtained in retirement studies for Italy.
Download InfoIf 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.
Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 08-052/3.
Date of creation: 22 May 2008
Date of revision:
Contact details of provider:
Web page: http://www.tinbergen.nl
retirement; social security wealth; seniority; unobserved heterogeneity;
Find related papers by JEL classification:
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
This paper has been announced in the following NEP Reports:
- NEP-AGE-2008-06-21 (Economics of Ageing)
- NEP-ALL-2008-06-21 (All new papers)
- NEP-EEC-2008-06-21 (European Economics)
- NEP-LAB-2008-06-21 (Labour Economics)
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.:
- Randall K. Filer & Marjorie Honig, 2005.
"Endogenous Pensions and Retirement Behavior,"
Hunter College Department of Economics Working Papers
410, Hunter College: Department of Economics.
- Courtney Coile & Jonathan Gruber, 2000.
"Social Security Incentives for Retirement,"
NBER Working Papers
7651, National Bureau of Economic Research, Inc.
- Stock, J.H. & Wise, D.A., 1988.
"Pensions, The Option Value Of Work, And Retirement,"
e-88-28, Hoover Institution, Stanford University.
- Stock, James H & Wise, David A, 1990. "Pensions, the Option Value of Work, and Retirement," Econometrica, Econometric Society, vol. 58(5), pages 1151-80, September.
- 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.
- Agar Brugiavini, 1999.
"Social Security and Retirement in Italy,"
in: Social Security and Retirement around the World, pages 181-237
National Bureau of Economic Research, Inc.
- Axel Borsch-Supan & Reinhold Schnabel, 1997.
"Social Security and Retirement in Germany,"
NBER Working Papers
6153, National Bureau of Economic Research, Inc.
- 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.
- 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).
- Hans Bloemen, 2008. "Private Wealth and Job Exit at Older Age: a Random Effects Model," Tinbergen Institute Discussion Papers 08-025/3, Tinbergen Institute.
- Raffaele Miniaci, 1998. "Microeconometric Analysis of the Retirement Decision: Italy," OECD Economics Department Working Papers 205, OECD Publishing.
- Agar Brugiavini & Franco Peracchi, 2003. "Social Security Wealth and Retirement Decisions in Italy," LABOUR, CEIS, vol. 17(SpecialIs), pages 79-114, 08.
- Courtney Coile & Jonathan Gruber, 2000. "Social Security and Retirement," NBER Working Papers 7830, National Bureau of Economic Research, Inc.
- Didier Blanchet & Louis-Paul Pele, 1997.
"Social Security and Retirement in France,"
NBER Working Papers
6214, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (webmaster-tinbergen).
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.