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Non-financial determinants of retirement

Author

Listed:
  • Frank van Erp

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • Niels Vermeer
  • Daniel van Vuuren

Abstract

This paper first confronts the observed aggregate retirement pattern in the Netherlands with predictions of traditional economic models of retirement. The retirement peaks observed in the data cannot entirely be reconciled with models putting financial incentives central to individual decision-making. After surveying different explanations from psychology and sociology, the paper concludes that social norms, default options, and reference-dependent utility are likely explanations for the observed individual propensity to retire at standard retirement ages. Most empirical evidence on these factors is, however, not related to the retirement age, so that a great deal of research remains to be done.

Suggested Citation

  • Frank van Erp & Niels Vermeer & Daniel van Vuuren, 2013. "Non-financial determinants of retirement," CPB Discussion Paper 243, CPB Netherlands Bureau for Economic Policy Analysis.
  • Handle: RePEc:cpb:discus:243
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    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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