Don’t Raise the Retirement Age! An Experiment on Opposition to Pension Reforms and East-West Differences in Germany

Abstract:     
For policy reforms to increase a society's welfare, reliable information on people's preferences and expectations is crucial. Representative opinion polls, often involving simplifed questions about the complex topics under debate, are an important source of information for both policy-makers and the public. Do people's answers to these poll questions reliably reject their preferences and expectations, or does fundamental, undiscriminating opposition to reforms distort them? We address this question in the context of a recent German pension reform which raised the statutory retirement age by two years to age 67. By introducing an experiment into a representative household survey, we are able to disentangle expectations of work ability at retirement and fundamental opposition. Our results show that expected work ability declines substantially with increasing target age (63, 65, or 67 years). Answers from West German respondents re°ect their current life situation as well as individual health and other risk factors. However, a fundamental opposition to reforms of the welfare state appears to strongly affect responses from East German households.

Number of Pages in PDF File: 44

Keywords: retirement, health, work ability, survey experiment, public opinion poll, PAYG pension system, East Germany

JEL Classification: J1, H3, H55, D84

working papers series