Relabeling, retirement and regret

Retirement Consumption and Pension Design

“…Finally, future research could incorporate behavioral frictions into the analysis of the optimal steepness of pension profiles. The types of behavioral frictions that seem the most likely to matter for the evaluation of steeper retirement incentives are those affecting retirement decisions directly (e.g., Gruber, Kanninen and Ravaska [2022], Seibold [2021], Reck and Seibold [2021]). Notes: The figure documents consumption dynamics around retirement.…”

“…Doing so allows us to estimate the direction and magnitude of the consumption smoothing effects of reforms like those incentivizing later retirement. As in other theory on social insurance (Baily [1978], Chetty [2006]), the optimal policy would trade off these consumption smoothing costs against the fiscal benefits of incentivizing later retirement, which have been the focus of comparatively more research (e.g., Staubli and Zweimüler [2013]; Manoli and Weber [2016]; Laun [2017]; Manoli and Weber [2018]; Gruber, Kanninen and Ravaska [2022]; Seibold [2021]; Lalive, Magesan and Staubli [2022]; Haller [2022]), and, potentially, behavioral internality effects [Mullainathan, Schwartzstein and Congdon, 2012;Spinnewijn, 2015;Reck and Seibold, 2021].…”

“…Complementary to our work is Haller [2022], who takes a similar sufficient-statistics approach to optimal pension design but focuses on the fiscal externality side of the trade-off. His work relates to a large empirical literature studying incentives and retirement behavior (e.g., Staubli and Zweimüler [2013]; Weber [2016, 2018]; Gruber, Kanninen and Ravaska [2022]; Seibold [2021]; Lalive, Mage-san and Staubli [2022]) and exploits Austrian pension reforms in the benefit generosity and early entitlement age to compare the corresponding average fiscal externalities. In contrast, our main empirical contribution is to estimate the consumption smoothing effects of pension reforms.…”

“…Another common feature of recent reforms is to increase the minimum age at which one can claim public pension benefits, which typically incentivizes workers who would otherwise retire early to work longer. A final feature of recent reforms that has ambiguous effects on incentives to work, but may nevertheless induce later retirement, concerns changes to statutory retirement ages like the "Normal Retirement Age" (seeSeibold [2021];Gruber, Kanninen and Ravaska [2022]). For further details, seeOECD [2015OECD [ , 2017OECD [ , 2019.…”

Financial Regret at Older Ages and Longevity Awareness

“…Twelve life domains were elicited (following Roese & Summerville, 2005): education, romance, career, family, parenting, leisure, spirituality, finances, community, health, friends, and self-improvement. In a related study, Gruber et al (2022) found that many who had retired prior to a Finnish pension reform raising the retirement age returned to work afterwards. 4 E.g., Zhou-Richter et al 2010;Brown et al 2012;Finkelstein & McGarry, 2006;and Brown & Finkelstein, 2008.…”