Projecting behavioral responses to the next generation of retirement policies
By: Alan L. Gustman, Thomas Steinmeier.
Contributors: Gustman, Alan L.; Steinmeier, Thomas.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 12958; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 12958.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "This paper examines retirement and related behavioral responses to policies that on average are actuarially neutral.  Many conventional models predict that actuarially neutral policies will not affect retirement behavior.  In contrast, our model allows those with high time preference rates to find that the promise of an actuarially fair increase in future rewards does not balance the loss from foregone current benefits.  Using data from the Health and Retirement Study, we find that from age 62 through full retirement age, the earnings test reduces full-time work by married men by about four percentage points, or by about ten percent of married men at full-time work.  Abolishing the requirements on many jobs that an individual work full-time or not at all, what we term a minimum hours constraint on employment, would induce more than twice as many people to enter partial retirement as would leave full-time work, so that total full-time equivalent (FTE) employment would increase, although by a modest amount.  If all benefits from personal accounts could be taken as a lump sum, the fraction not retired at age 62 would fall by about 5 percentage points compared to a system where there is mandatory annuitization of benefits"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 4/27/2007.

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