The Impact of Framing and Anchoring on Postponing Labour Market Exit – Evidence from Polish NDC+FDC Pension Scheme

Purpose: The article examines whether the level of effective retirement age can be shifted upwards by increasing awareness of the consequences of premature retirement. Design/Methodology/Approach: The study uses multinomial logistic regression on the representative survey data for Polish working population. Special interest is given to the questionnaire with framing and anchoring effects included. Findings: The findings reveal strong retirement preferences of a minimum retirement age being the reference point and the natural anchor. However, these might change once framing is provided. Pension awareness is a significant predictor of postponing retirement. There can be distinguished a segment of working population with extremely low pension literacy. Practical Implications: Increasing effective retirement age is among most important factors reducing labour supply deficits and improving long-term sustainability of public finance. Special interest should be given to rational individuals with wrong assumptions on the mechanics of the pension scheme and individuals with extremely low pension knowledge in order to avoid severe old-age poverty. Originality/value: The study confirms that use of framing in increasing financial literacy leads to significant postponement of the labour market exit declared. Furthermore, there is a segment of the Polish working population with extremely low pension knowledge which should be educated.