Non-financial Determinants of Retirement: A Literature Review

Retirement is often concentrated at specific ages—in particular the ‘normal retirement age’ and an ‘early retirement age’. Financial incentives cannot fully explain this. Moreover, the participation effect of a higher normal retirement age importantly exceeds the encompassing income effect. Based on...

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Bibliographic Details
Published in:De Economist (Netherlands) 2014-06, Vol.162 (2), p.167-191
Main Authors: van Erp, Frank, Vermeer, Niels, van Vuuren, Daniel
Format: Article
Language:English
Subjects:
Age
Analysis
Bounded rationality
Decision making
Early retirement
Economic Policy
Economic theory
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Expenditures
Government spending
Labor supply
Literacy
Literature reviews
Microeconomics
Monetary incentives
Pension funds
Pension plans
Pension schemes
Public Finance
Rationality
Retired persons
Retirement
Retirement age
Retirement pensions
Retirement planning
Social conditions & trends
Social norms
Sociology
Studies
Tax reform
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Summary:Retirement is often concentrated at specific ages—in particular the ‘normal retirement age’ and an ‘early retirement age’. Financial incentives cannot fully explain this. Moreover, the participation effect of a higher normal retirement age importantly exceeds the encompassing income effect. Based on a literature survey, we conclude that social norms, default options, and reference-dependent utility are likely explanations for the individual propensity to retire at specific retirement ages. Further empirical research on non-financial determinants of retirement is needed to fully understand individual retirement behavior.
ISSN:0013-063X
1572-9982
DOI:10.1007/s10645-014-9229-5