Retirement Decisions

• Autorzy: Anna Ruzik-Sierdzińska

Warianty tytułu

Decyzje o przejściu na emeryturę

• Języki publikacji: EN

Abstrakty

EN

The presented discussion of behavioural mechanisms for choosing the age to retire at shows what measures encourage a later exit from the labour market and can prove effective in the face of demographic change within population structures. First of all, it is effective to raise the standard eligibility age for benefits, 19 as the statutory retirement age is often an important benchmark for decisions on labour supply in old age. Secondly, it seems that social norms concerning the exit age are also important for a significant part of the population. Luc Behaghel and David Blau 20 underline the importance of norms, especially for individuals with less capacity to process complex information on the rules governing old-age pension schemes. Both described phenomena explain why people in many countries tend to retire at a certain age, even though this is not the best decision in their individual circumstances, e.g., when their health condition and labour market situation allow them to work longer and at the same time would ensure a higher pension in the future. As a result of hyperbolic discounting, individuals prefer lower and immediate pensions to higher ones that they will receive only in the future. However, this mechanism does not explain the observed maximum exit rates exactly at the minimum retirement age itself. The effects of hyperbolic discounting are being widely studied by economists dealing with behavioural approaches to consumption and saving. However, when analysing the retirement age, this does not seem to be the main explanation for the relationships observed in the data. The results of behavioural economics research also stress the framing effect, i.e., the impact of the appropriate presentation of different retirement options. The term "early retirement" has positive connotations, which may encourage more people to choose such an option, 21 while terms describing different retirement options in another way may cause people to stop working several years later. Perhaps the term "early retirement" should be replaced by "lower pension," while instead of using the terms: "delayed" or "postponed" retirement, it is better to speak of "higher pension." To sum up, behavioural economics is quite a new branch of economics, but it often offers more realistic assumptions for the reasons of human behaviour than those adopted in neoclassical models. In spite of the criticism of some the generalisations that have emerged in connection with the results of experiments carried out by behaviourists, it seems worth considering also the use of behavioural economics research methods to deepen analyses of retirement decisions. (original abstract)

Celem artykułu jest przeanalizowanie, jak różne zjawiska badane przez ekonomię behawioralną mogą tłumaczyć podaż pracy osób w wieku okołoemerytalnym. Założenie o hiperbolicznym dyskontowaniu obecnych i przyszłych dochodów może wyjaśniać dość szybkie przechodzenie niektórych osób na emeryturę, zaś normy społeczne dotyczące aktywności zawodowej w starszym wieku różnicują między krajami efektywny wiek odejścia z rynku pracy. Z punktu widzenia polityki zachęcającej ludzi do coraz późniejszego kończenia aktywności zawodowej istotny jest wpływ efektu sformułowania (ang. framig effect) na decyzje emerytalne. (abstrakt oryginalny)

Słowa kluczowe

EN

Pensions; Retirement age; Social norms

PL

Emerytury; Wiek emerytalny; Normy społeczne

• Czasopismo: Ubezpieczenia Społeczne. Teoria i praktyka
• Rocznik: 2019
• Numer: nr 3 (142)
• Strony: 67--78

Twórcy

autor

Anna Ruzik-Sierdzińska

• Warsaw School of Economics, Poland

Bibliografia

• Barr N., Diamond P., Reforming pensions: Principles, analytical errors and policy directions, "International Social Security Review" 2009, No. 62 (2).
• Behaghel L., Blau D., Framing social security reform: Behavioral responses to changes in the full retirement age, Michigan 2010.
• Bidewell J., Griffin B., Hesketh B., Timing of retirement: Including a delay discounting perspective in retirement models, "Journal of Vocational Behavior" 2006, No. 68.
• Bissonnette L., Soest A. van, Retirement expectations, preferences, and decisions, Panel Paper 18, Tilburg 2010.
• Blöndal S., Scarpetta S., The Retirement Decisions in OECD Countries, Paris 1999.
• Boskin M.J., Hurd M.D., The Effect of Social Security on Early Retirement, "Journal of Public Economics" 1978, Vol. 10.
• Buchholtz S., Gąska J., Góra M., Pension strategies of workers in a country getting old before getting rich, 2018.
• Erp F. van, Vermeer N., Vuuren D. van, Non-financial determinants of retirement, The Hague 2013.
• Feldstein M., Social Security, Induced Retirement and Aggregate Capital Accumulation, "Journal of Political Economy" 1974, No. 5.
• Fetherstonhaugh D., Ross L., Framing Effects and Income Flow Preferences in Decisions about Social Security [in:] Behavioral Dimensions of Retirement Economics, ed. H.J. Aaron, Washington DC 1999.
• Frederick S., Loewenstein F., O'Donoghue T., Time discounting and time preference: a critical review, "Journal of Economic Literature" 2002, No. 40.
• Gruber J., Wise D.A., Social Security Programs and Retirement around the World: The Relationship to Youth Employment, Chicago 2010.
• Kahneman D., Knetsch J., Thaler R., The endowment effect, loss aversion, and the status quo bias, "Journal of Economic Perspectives" 1991, No. 5 (1).
• Kahneman D., Tversky A., Prospect theory: An analysis of decision under risk, "Econometrica" 1979, No. 47.
• Knoll M.A.Z., Behavioral and Psychological Aspects of the Retirement Decision, "Social Security Bulletin" 2011, No. 71/4.
• Krauth B., Social interactions in small groups, "Canadian Journal of Economics" 2006, No. 39 (2).
• Kula G., Decyzja o przejściu na emeryturę - przegląd literatury, "Ekonomista" 2007, No. 2.
• Lindbeck A., Nyberg S., Weibull J., Social norms and economic incentives in the welfare state, "Quarterly Journal of Economics" 1999, No. 114 (1).
• Madrian B.C., Shea D.F., The Power Of Suggestion: Inertia In 401(k) Participation And Savings Behavior, "Quarterly Journal of Economics" 2001, Vol. 116.
• Organisation for Economic Co-operation and Development, Effective age of labour market exit [in:] Pensions at a Glance 2017: OECD and G20 Indicators, Paris 2017
• Ruzik-Sierdzińska A., An Attempt to Identify Factors Influencing Retirement Decisions in Poland, "Acta Universitatis Lodziensis. Folia Oeconomica" 2018, No. 4 (336).
• Social Security and Retirement Around the World, ed. J. Gruber, D.A. Wise, Chicago 1999.
• Social Security Programs and Retirement Around the World: Micro Estimation, ed. J. Gruber, D.A. Wise, 2002.
• Solek A., Ekonomia behawioralna a ekonomia neoklasyczna, "Zeszyty Naukowe" 2010, No. 8.
• Thaler R.H., Benartzi S., Save More TomorrowTM: Using Behavioral Economics to Increase Employee Saving, "Journal of Political Economy" 2004, No. 112 (S1).
• Thaler R.H., Sunstein C., Nudge: Improving decisions about health, wealth, and happiness, New Haven 2008.
• Vernon S., Beyond Defaults: Using Behavioral Economics to Improve Retirement Outcomes, "Benefits Magazine" 2019, Vol. 56, No. 3

Identyfikatory

DOI

10.32088/0000_11