To defer or not defer? State Pension in a Lifecycle Model
The 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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- Alan L. Gustman & Thomas L. Steinmeier, 2002. "Retirement and the Stock Market Bubble," NBER Working Papers 9404, National Bureau of Economic Research, Inc.
- 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.
- 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.
- 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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