CEU Electronic Theses and Dissertations, 2012
| Author | Lazhevska, Nadiia Volodymyrivna |
|---|---|
| Title | Do financial incentives affect retirement decisions? Evidence from European countries |
| Summary | This paper investigates the effects of financial incentives on retirement decisions across eleven European countries using data from the Survey of Health, Ageing and Retirement in Europe (SHARE). I estimate a structural model of retirement using simplified version of the option value to postpone retirement approach. I argue about self-selection problem and apply Heckman two-step method to correct for it. The main result is that financial incentives have a large effect on probability of transition into retirement. Respondents of the survey are more responsive to increases in expected pension wealth than to decreases in expected level of earnings. Also, they are more responsive to changes in expected pension benefits compared to increases in legal retirement age. Finally, the effects from financial incentives found to be larger for potential early retirees. My results suggest that financial incentives are effective to use when trying to overcome the early retirement problem in European countries. |
| Supervisor | Kézdi, Gábor |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2012/lazhevska_nadiia.pdf |
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