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Expected retirement age and pension benefits in Austria: evidence from survey data

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Abstract

In this paper we present evidence on Austrians’ expectations about their retirement age and the size of their pension benefits. We find that young people expect to retire at an older age compared to the actual age. The answers indicate that this increase in the expected retirement age might be sufficient to counterbalance the forecasted rise in life expectancy over the next decades. Furthermore, the increase is also approximately in line with the assumptions that underlie official forecasts about the development of pension expenditures. People in Austria also expect to receive less pension benefits, i.e. they expect net replacement rates to decrease, although in this case our results are less conclusive. In general, there exists a considerable degree of uncertainty, in particular among younger people. Furthermore, we find that the main structure of the new pension account system does not seem to be well understood. This suggests that the rules of the new system could be better communicated (e.g. via individualized pension account information).

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  • Markus Knell & Esther Segalla & Andrea Weber, 2015. "Expected retirement age and pension benefits in Austria: evidence from survey data," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 35-57.
  • Handle: RePEc:onb:oenbmp:y:2015:i:3:b:3
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    File URL: https://www.oenb.at/dam/jcr:7eb2cbb7-dba2-4ada-a124-2cb3ac7116c4/mop_2015_q3_analyses_03.pdf
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    References listed on IDEAS

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    1. Jeff Dominitz, 1998. "Earnings Expectations, Revisions, And Realizations," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 374-388, August.
    2. Bottazzi, Renata & Jappelli, Tullio & Padula, Mario, 2006. "Retirement expectations, pension reforms, and their impact on private wealth accumulation," Journal of Public Economics, Elsevier, vol. 90(12), pages 2187-2212, December.
    3. Mastrobuoni, Giovanni, 2011. "The role of information for retirement behavior: Evidence based on the stepwise introduction of the Social Security Statement," Journal of Public Economics, Elsevier, vol. 95(7), pages 913-925.
    4. Andries de Grip & Didier Fouarge & Raymond Montizaan, 2013. "How Sensitive are Individual Retirement Expectations to Raising the Retirement Age?," De Economist, Springer, vol. 161(3), pages 225-251, September.
    5. Luigi Guiso & Tullio Jappelli & Mario Padula, 2013. "Pension Wealth Uncertainty," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 80(4), pages 1057-1085, December.
    6. Mastrobuoni, Giovanni, 2009. "Labor supply effects of the recent social security benefit cuts: Empirical estimates using cohort discontinuities," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1224-1233, December.
    7. Hugo Bentez-Silva & Debra S. Dwyer, 2005. "The Rationality of Retirement Expectations and the Role of New Information," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 587-592, August.
    8. M. Baldini & C. Mazzaferro & P. Onofri, 2015. "Pension expectations and reality. What do Italian workers know about their future public pension benefits?," Working Papers wp1007, Dipartimento Scienze Economiche, Universita' di Bologna.
    9. Jeff Dominitz & Charles F. Manski, 2006. "Measuring Pension-benefit Expectations Probabilistically," LABOUR, CEIS, vol. 20(2), pages 201-236, June.
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    Keywords

    pension system; retirement age; replacement rate; subjective expectations;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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