Working Paper: NBER ID: w30938
Authors: Franca Glenzer; Pierre-Carl Michaud; Stefan Staubli
Abstract: In many retirement income systems, people forgo a higher stream of public pension income by claiming early. We provide both survey-experimental and quasi-experimental evidence that the timing of public pension claiming is relatively inelastic to changes in financial incentives. Using the survey experiment, we evaluate the effect of two different educational interventions and different ways of framing the decision on the present value of participants' expected pension payments. While all three types of interventions induce delays, these interventions have heterogeneous financial consequences. Educating participants leads to claiming ages with higher pension wealth. In contrast, framing and financial incentives do not improve, and even worsen, financial outcomes. Understanding the impact of various policy tools on expected pension wealth is essential for designing policies to delay claiming.
Keywords: public pension; claiming behavior; financial incentives; educational interventions; survey experiment
JEL Codes: G53; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| educational interventions (I24) | claiming decisions (D91) |
| first educational treatment (I21) | optimistic respondents claim early (P27) |
| first educational treatment (I21) | pessimistic respondents delay claiming (J26) |
| second educational treatment (I23) | claiming behavior (D91) |
| framing decision around normal retirement age (J26) | delays in claiming (J65) |
| framing decision in terms of losses versus gains (D91) | claiming timing (C41) |
| framing decision as monthly versus annual payments (G59) | claiming timing (C41) |
| 10% increase in pension accrual (H55) | probability of claiming today (C11) |
| financial incentives (M52) | elasticity of claiming decisions (D91) |