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What Triggers Early Retirement ? Results from Swiss Pension Funds

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  • Monika BÜTLER
  • Olivia HUGUENIN
  • Federica TEPPA

Abstract

Early 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 affuent 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.

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Bibliographic Info

Paper provided by Université de Lausanne, Faculté des HEC, DEEP in its series Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) with number 04.04.

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Length: 33 pages
Date of creation: Apr 2004
Date of revision:
Handle: RePEc:lau:crdeep:04.04

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Postal: Université de Lausanne, Faculté des HEC, DEEP, Internef, CH-1015 Lausanne
Phone: ++41 21 692.33.64
Fax: ++41 21 692.33.05
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Web page: http://www.hec.unil.ch/deep/publications/cahiers/series
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Keywords: occupational pension; retirement decision; duration models;

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References

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Citations

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Cited by:
  1. Monika Riedel & Helmut Hofer, 2013. "Determinants of the Transition from Work into Retirement," NRN working papers 2013-10, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  2. Daniel Hallberg & Matias Eklöf, 2010. "Do buy-outs of older workers matter?: Estimating retirement behavior with special early retirement offers," International Journal of Manpower, Emerald Group Publishing, vol. 31(3), pages 337-359, July.
  3. Monika Bütler, 2010. "The Role of the Annuity’s Value on the Decision (Not) to Annuitize: Evidence from a Large Policy Change," University of St. Gallen Department of Economics working paper series 2010, Department of Economics, University of St. Gallen 2010-05, Department of Economics, University of St. Gallen.
  4. Justina A.V. Fischer & Alfonso Sousa-Poza, 2006. "The Institutional Determinants of Early Retirement in Europe," University of St. Gallen Department of Economics working paper series 2006, Department of Economics, University of St. Gallen 2006-08, Department of Economics, University of St. Gallen.
  5. Estelle James & Alejandra Cox Edwards, 2005. "Do Individual Accounts Postpone Retirement: Evidence from Chile," Working Papers, University of Michigan, Michigan Retirement Research Center wp098, University of Michigan, Michigan Retirement Research Center.
  6. Piekkola, Hannu & Deschryvere, Matthias, 2004. "Retirement Decisions and Option Values: Their Application Regarding Finland," Discussion Papers, The Research Institute of the Finnish Economy 951, The Research Institute of the Finnish Economy.
  7. Dorn, David & Sousa-Poza, Alfonso, 2007. "'Voluntary' and 'Involuntary' Early Retirement: An International Analysis," IZA Discussion Papers 2714, Institute for the Study of Labor (IZA).
  8. Christian Keuschnigg & Mirela Keuschnigg & Christian Jaag, 2009. "Aging and the Financing of Social Security in Switzerland," University of St. Gallen Department of Economics working paper series 2009, Department of Economics, University of St. Gallen 2009-26, Department of Economics, University of St. Gallen.
  9. Marjan, MAES, 2008. "Financial and redistributive impact of reforming the old-age pension system in Belgium," Discussion Papers (ECON - Département des Sciences Economiques), Université catholique de Louvain, Département des Sciences Economiques 2008040, Université catholique de Louvain, Département des Sciences Economiques.

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