Longevity Perceptions and Saving Decisions During the COVID-19 Outbreak: An Experimental Investigation

12 Pages Posted: 14 Jan 2021 Last revised: 21 Jan 2021

See all articles by Abigail Hurwitz

Abigail Hurwitz

Hebrew University, Jerusalem Israel

Olivia S. Mitchell

University of Pennsylvania - The Wharton School; University of Pennsylvania - The Wharton School, Pension Research Council; National Bureau of Economic Research (NBER)

Orly Sade

Hebrew University of Jerusalem - Department of Finance

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Date Written: January 12, 2021

Abstract

We experimentally study individuals’ perceptions about and advice to others regarding retirement savings and annuitization during the pandemic. Many people recommend that others save more for retirement, but those most affected by the pandemic tell others to save and annuitize less. We investigate two possible channels for this result and show that the pandemic does not substantially alter optimism regarding survival probabilities. Hence, we conclude that economic factors are driving our results. Consequently, some financial ramifications of the COVID-19 outbreak are yet to be revealed, as the pandemic is having longer-term effects on peoples’ willingness to save and annuitize.

Keywords: retirement expectations, annuity, longevity, life expectancy, framing, behavioral economics, household finance

JEL Classification: G5, G4, J26

Suggested Citation

Hurwitz, Abigail and Mitchell, Olivia S. and Sade, Orly, Longevity Perceptions and Saving Decisions During the COVID-19 Outbreak: An Experimental Investigation (January 12, 2021). Wharton Pension Research Council Working Paper No. 2021-01, Available at SSRN: https://ssrn.com/abstract=3766499 or http://dx.doi.org/10.2139/ssrn.3766499

Abigail Hurwitz

Hebrew University, Jerusalem Israel ( email )

Mount Scopus
Jerusalem, 91905
Israel

Olivia S. Mitchell (Contact Author)

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

University of Pennsylvania - The Wharton School, Pension Research Council ( email )

3302 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Orly Sade

Hebrew University of Jerusalem - Department of Finance ( email )

Mount Scopus
Jerusalem, 91905
Israel
972 2 588 3227 (Phone)

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