The Influence of Time Preferences on Retirement Timing

Schreiber, Philipp; Weber, Martin

doi:10.2139/ssrn.2778578

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Retirement Behavior1

Recruitment and Methodology1

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2016

2019

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Cited by 3 publications

(2 citation statements)

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“…Our findings regarding retirement outcomes contrast to some extent with evidence from Schreiber and Weber (2016). They conducted an online survey with roughly 3,000 German newspaper readers, and found that a measure of present bias is associated with earlier retirement ages, and a greater discrepancy between planned and actual retirement age in the direction of retiring earlier than expected.…”

Section: Retirement Behaviorcontrasting

confidence: 99%

Time Discounting and Economic Decision-Making Among the Elderly

2016

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Section: Retirement Behaviorcontrasting

confidence: 99%

Time Discounting and Economic Decision-Making Among the Elderly

2016

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“…Between subjects, they were either asked for a reservation price regarding early retirement in a WTA or in a WTP setting. Additionally, they respond to a set of questions on time preferences, which are analyzed in Schreiber and Weber (2016).…”

Section: Recruitment and Methodologymentioning

confidence: 99%

Framing and retirement age: The gap between willingness-to-accept and willingness-to-pay

2017

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In a large online experiment, we relate the retirement timing decision to the disparity between the willingness-to-accept (WTA) and the willingness-to-pay (WTP). In the WTP treatment, participants indicate the maximum amount of monthly benefits they are willing to give up in order to retire early. In the WTA treatment, the minimum increase of monthly payments in order to delay retirement is elicited. Our results reveal that the framing of the decision problem strongly influences participants' reservation price for early retirement. The willingnessto-accept for early retirement is more than twice as high as the corresponding willingness-to-pay.Using actual values from the German social security system as market prices, we demonstrate that the presentation in a WTA frame can induce early retirement. In this frame, the implicit probability of retiring early increases by 30 percentage points. We further show that the disparity between WTA and WTP is correlated with loss aversion. Repeating the analysis with data from a representative household survey (German SAVE panel), we find similar results.

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