Nonparametric Evidence on the Effects of Financial Incentives on Retirement Decisions
AbstractThis paper presents new empirical evidence on the effects of retirement benefits on labor force participation decisions. We use administrative data on the census of private sector employees in Austria and variation from mandated discontinuous changes in retirement benefits from the Austrian pension system. We present graphical evidence documenting labor supply responses to the policy discontinuities. Next, we develop nonparametric procedures to estimate labor supply elasticities based on the graphical evidence and mandated financial incentives. We estimate elasticities of 0.12 for men and 0.38 for women. These relatively low elasticities highlight that many retirement decisions are likely to be affected by factors beyond only financial incentives from retirement benefits.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17320.
Date of creation: Aug 2011
Date of revision:
Note: AG LS PE
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Find related papers by JEL classification:
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-08-29 (Economics of Ageing)
- NEP-ALL-2011-08-29 (All new papers)
- NEP-EUR-2011-08-29 (Microeconomic European Issues)
- NEP-LAB-2011-08-29 (Labour Economics)
- NEP-LMA-2011-08-29 (Labor Markets - Supply, Demand, & Wages)
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- Michael Devereux & Li Liu & Simon Loretz, 2012. "The Elasticity of Corporate Taxable Income: New Evidence from UK Tax Records," Working Papers 1223, Oxford University Centre for Business Taxation.
- Tibor Hanappi, 2012. "Retirement Behaviour in Austria: Incentive Effects on Old-Age Labor Supply," NRN working papers 2012-13, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
- Håkan Selin, 2012.
"What Happens to the Husband's Retirement Decision when the Wife's Retirement Incentives Change?,"
CESifo Working Paper Series
3772, CESifo Group Munich.
- Selin, Håkan, 2011. "What happens to the husband’s retirement decision when the wife’s retirement incentives change?," Working Paper Series, Center for Fiscal Studies 2011:8, Uppsala University, Department of Economics.
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