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Time Inconsistency And Delayed Retirement Decision: The French Pension Bonus

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  • Steve Briand

    (SAF - Laboratoire de Sciences Actuarielle et Financière - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon)

Abstract

With the increase in life expectancy and demographic shocks, several public policies in the last decades aim to encourage individuals to postpone retirement. One of them, the pension bonus, gives an increased pension if individuals retire beyond their Full Retirement Age. Previous ex post analyses found that the responsiveness to this type of financial incentives, which encourage to postpone retirement, is heterogeneous among agents and that the global effect is rather limited. Deriving from previous research in Behavioural Economics, this article analyses the impact of time inconsistency in the decision to delay retirement to get the bonus. Using public national survey data, short-term and long-term impatience are measured with questions on retiring motivations. After controlling for the endogeneity of the bonus knowledge, econometric results show that time-inconsistent agents are less likely to retire with the bonus.

Suggested Citation

  • Steve Briand, 2018. "Time Inconsistency And Delayed Retirement Decision: The French Pension Bonus," Post-Print hal-02004085, HAL.
    • Handle: RePEc:hal:journl:hal-02004085
    Note: View the original document on HAL open archive server: https://hal.science/hal-02004085
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    References listed on IDEAS

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    1. Samia Benallah, 2011. "Comportements de départ en retraite et réforme de 2003. Les effets de la surcote," Économie et Statistique, Programme National Persée, vol. 441(1), pages 79-99.
    2. Sewin Chan & Ann Huff Stevens, 2008. "What You Don't Know Can't Help You: Pension Knowledge and Retirement Decision-Making," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 253-266, May.
    3. Thaler, Richard, 1981. "Some empirical evidence on dynamic inconsistency," Economics Letters, Elsevier, vol. 8(3), pages 201-207.
    4. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 443-478.
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