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Trading Pay for Pensions: Evidence from a Discrete Choice Experiment in the United Kingdom

Author

Listed:
  • Deschacht, Nick

    (KU Leuven)

  • Guillemyn, Inés

    (University of Antwerp)

  • Vujic, Suncica

    (University of Antwerp)

Abstract

This study estimates individuals’ willingness to pay for pension benefits using a discrete choice experiment with fictitious job advertisements conducted among workers in the United Kingdom (UK). The results indicate that workers are willing to trade off current pay for additional pension benefits, with the marginal worker willing to forgo 0.3% of their current wage for a one percentage point increase in pension benefits. Willingness to pay varies significantly across individuals, increasing with proximity to retirement age, higher income levels, financial planning and financial literacy.

Suggested Citation

  • Deschacht, Nick & Guillemyn, Inés & Vujic, Suncica, 2025. "Trading Pay for Pensions: Evidence from a Discrete Choice Experiment in the United Kingdom," IZA Discussion Papers 18164, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp18164
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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