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Cutting one’s coat according to one’s cloth – How did the great recession affect retirement resources and expenditure goals?

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  • de Bresser, Jochem
  • Knoef, Marike
  • Kools, Lieke

Abstract

This paper describes how individuals update their retirement plans in response to substantial shocks in pension wealth during the Great Recession. Using a unique combination of survey and administrative panel data from before and after the Great Recession in the Netherlands, we investigate the causal relation between wealth and retirement expenditure goals. We separate ‘pure’ wealth effects from macro factors such as general pessimism. The estimates show that a negative shock in annuitized pension wealth of 100 euros reduced retirement expenditure goals with 24–33 euros. The effects are relatively large for old and high-income individuals.

Suggested Citation

  • de Bresser, Jochem & Knoef, Marike & Kools, Lieke, 2021. "Cutting one’s coat according to one’s cloth – How did the great recession affect retirement resources and expenditure goals?," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 126-166.
    • Handle: RePEc:eee:jeborg:v:188:y:2021:i:c:p:126-166
    DOI: 10.1016/j.jebo.2021.05.010
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    More about this item

    Keywords

    Macroeconomic shocks; Pensions; Savings; Aging;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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