The Impact of Social Security on Pension Claiming and Retirement: Active vs. Passive Decisions

71 Pages Posted: 29 Jul 2020

See all articles by Rafael Lalive

Rafael Lalive

University of Lausanne - Department of Economics (DEEP); IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Arvind Magesan

University of Calgary

Stefan Staubli

University of Calgary

Multiple version iconThere are 3 versions of this paper

Abstract

We exploit a unique Swiss reform to identify the importance of passivity, claiming social security benefits at the Full Retirement Age (FRA). Sharp discontinuities generated by the reform reveal that raising the FRA while imposing small early claiming penalties significantly delays pension claiming and retirement, but imposing large penalties and holding the FRA fixed does not. The nature of the reform allows us to identify that between 47 and 69% of individuals are passive, while imposing additional structure point identifies the fraction at 67%. An original survey of Swiss pensioners reveals that reference-dependent preferences is the main source of passivity.

Keywords: full retirement age, social security, regression discontinuity design, reference dependence

JEL Classification: H55, J21, J26

Suggested Citation

Lalive, Rafael and Magesan, Arvind and Staubli, Stefan, The Impact of Social Security on Pension Claiming and Retirement: Active vs. Passive Decisions. Available at SSRN: https://ssrn.com/abstract=3660284 or http://dx.doi.org/10.2139/ssrn.3660284

Rafael Lalive (Contact Author)

University of Lausanne - Department of Economics (DEEP) ( email )

BFSH1
Lausanne, 1015
Switzerland

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Arvind Magesan

University of Calgary ( email )

2500 University DR NW
Calgary, AB
Canada

Stefan Staubli

University of Calgary ( email )

University Drive
Calgary, Alberta T2N 1N4
Canada

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
10
Abstract Views
145
PlumX Metrics