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Experimental Research on Retirement Decision-Making: Evidence from Reproductions

Author

Listed:
  • Kremena Bachmann

    (University of Zurich - Department of Banking and Finance; Zurich University of Applied Sciences)

  • Andre Lot

    (Norwegian School of Economics and Zurich University of Applied Sciences)

  • Xiaogeng Xu

    (Hanken School of Economics)

  • Thorsten Hens

    (University of Zurich - Department of Banking and Finance; Norwegian School of Economics and Business Administration (NHH); Swiss Finance Institute)

Abstract

We adapt the design of five experimental studies on retirement decision-making and conduct reproductions with a larger sample from the broader population. We reproduce most of the main effects of the original studies. In particular, we find that consumption decisions are less efficient when subjects need to borrow from the future than save from the present. When subjects collect retirement benefits as lump-sum instead of annuities, they choose to retire later. The duration of retirement affects the saving behavior of the subjects. Savings are higher when they are incentivized with matching contributions than with tax rebates. When faced with stochastic survival risk, subjects make partial adjustments to spending paths. We also propose a further experimental research agenda in related topics and discuss practical issues on subject recruitment, attrition, and redesign of complex tasks.

Suggested Citation

  • Kremena Bachmann & Andre Lot & Xiaogeng Xu & Thorsten Hens, 2022. "Experimental Research on Retirement Decision-Making: Evidence from Reproductions," Swiss Finance Institute Research Paper Series 22-72, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2272
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    More about this item

    Keywords

    household finance; retirement decision; savings; annuities; life-cycle optimization; income smoothing; experiments; reproductions;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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