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The Social Multiplier of Pension Reform

Author

Listed:
  • Emre Oral
  • Simon Rabaté
  • Arthur Seibold

Abstract

We study the influence of family members, neighbors and coworkers on retirement behavior. To estimate causal retirement spillovers between individuals, we exploit a pension reform in the Netherlands that creates exogenous variation in peers’ retirement ages, and we use administrative data on the full Dutch population. We find large spillovers in couples, primarily due to women reacting to their husband’s retirement choices. Consistent with homophily in social interactions, the influence of the average sibling, neighbor and coworker is modest, but sizable spillovers emerge between similar individuals in these groups. Additional evidence suggests both leisure complementarities and the transmission of social norms as mechanisms behind retirement spillovers. Our findings imply that pension reforms have a large social multiplier, amplifying their overall impact on retirement behavior by 40%.

Suggested Citation

  • Emre Oral & Simon Rabaté & Arthur Seibold, 2024. "The Social Multiplier of Pension Reform," CESifo Working Paper Series 10999, CESifo.
    • Handle: RePEc:ces:ceswps:_10999
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp10999.pdf
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    References listed on IDEAS

    as
    1. Rafael Lalive & Arvind Magesan & Stefan Staubli, 2023. "How Social Security Reform Affects Retirement and Pension Claiming," American Economic Journal: Economic Policy, American Economic Association, vol. 15(3), pages 115-150, August.
    2. Dolls, Mathias & Krolage, Carla, 2023. "‘Earned, not given’? The effect of lowering the full retirement age on retirement decisions," Journal of Public Economics, Elsevier, vol. 223(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    retirement; pension reform; social networks; spillover; peer effects;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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