To defer or not defer? State Pension in a Lifecycle Model
AbstractThe UK state pension (which depends only on age) includes an option to defer take up which yields either a subsequent lump sum or higher weekly pension. We analyse the joint decisions on pension deferral and intertemporal labour supply/participation in a life cycle setting. We show that deferral is purely a financial decision, but the impact of deferral on work decisions depends on preferences, wage rates, non-labour income and initial wealth. To exactly characterise this we use a quasilinear utility function, and provide calibrated simulations. We also discuss the choice between a lump sum or increased weekly pension
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Bibliographic InfoPaper provided by Department of Economics, University of York in its series Discussion Papers with number 13/26.
Date of creation: Sep 2013
Date of revision:
Contact details of provider:
Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
Phone: (0)1904 323776
Fax: (0)1904 323759
Web page: http://www.york.ac.uk/economics/
More information through EDIRC
Retirement; Labour Supply; Ageing; UK State Pension;
Find related papers by JEL classification:
- J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
- J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
- 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-2013-09-24 (Economics of Ageing)
- NEP-ALL-2013-09-24 (All new papers)
- NEP-DEM-2013-09-24 (Demographic Economics)
- NEP-LAB-2013-09-24 (Labour Economics)
- NEP-LMA-2013-09-24 (Labor Markets - Supply, Demand, & Wages)
- NEP-UPT-2013-09-24 (Utility Models & Prospect Theory)
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.:
- Alan L. Gustman & Thomas L. Steinmeier, 2002. "Retirement and the Stock Market Bubble," NBER Working Papers 9404, National Bureau of Economic Research, Inc.
- Orazio Attanasio & Hamish Low & Virginia Sanchez-Marcos, 2008.
"Explaining Changes in Female Labor Supply in a Life-Cycle Model,"
American Economic Review,
American Economic Association, vol. 98(4), pages 1517-52, September.
- Attanasio, O. & Low, H. & Sanchez-Marcos, V., 2004. "Explaining Changes in Female Labour Supply in a Life-cycle Model," Cambridge Working Papers in Economics 0451, Faculty of Economics, University of Cambridge.
- Virginia Sanchez-Marcos & Orazio Attanasio & Hamish Low, 2004. "Explaining Changes in Female Labour Supply in a Life-Cycle Model," 2004 Meeting Papers 492, Society for Economic Dynamics.
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