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

70 Pages Posted: 4 Aug 2020 Last revised: 16 Jun 2024

See all articles by Rafael Lalive

Rafael Lalive

University of Lausanne - Department of Economics; 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

Date Written: July 2020

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.

Suggested Citation

Lalive, Rafael and Magesan, Arvind Nathan and Staubli, Stefan, The Impact of Social Security on Pension Claiming and Retirement: Active vs. Passive Decisions (July 2020). NBER Working Paper No. w27616, Available at SSRN: https://ssrn.com/abstract=3665887

Rafael Lalive (Contact Author)

University of Lausanne - Department of Economics ( email )

Batiment Internef
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 Nathan Magesan

University of Calgary ( email )

University Drive
Calgary, Alberta T2N 1N4
Canada

Stefan Staubli

University of Calgary ( email )

University Drive
Calgary, Alberta T2N 1N4
Canada

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