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Using Stated Preferences Data to Analyze Preferences for Full and Partial Retirement

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  • Arthur Van Soest
  • Arie Kapteyn
  • Julie Zissimopoulos

Abstract

Structural models explaining retirement decisions of individuals or households in an inter-temporal setting are typically hard to estimate using data on actual retirement decisions, because choice sets are complicated and uncertain and for a large part unobserved by the researcher. This paper describes an experiment in which both perceived retirement opportunities and preferences for retirement are measured. For the latter, respondents evaluate how attractive they find a number of hypothetical, simplified, retirement trajectories involving early retirement, late retirement, and gradual retirement, each with its own corresponding income path. The questions were fielded in the Dutch CentERpanel. The answers are used to estimate a stylized structural life-cycle model of retirement preferences. The results suggest that, for example, many respondents could be convinced to work part-time after age 65 before retiring completely at age 70 for a reasonable financial compensation. Simulations combining the information on perceived opportunities with estimated preferences also illustrate the importance of employer imposed restrictions on retirement and the scope for increasing labor force participation of the elderly by creating opportunities for gradual retirement.

Suggested Citation

  • Arthur Van Soest & Arie Kapteyn & Julie Zissimopoulos, 2006. "Using Stated Preferences Data to Analyze Preferences for Full and Partial Retirement," Working Papers WR-345, RAND Corporation.
    • Handle: RePEc:ran:wpaper:wr-345
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    References listed on IDEAS

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    Cited by:

    1. Elsayed, Ahmed & de Grip, Andries & Fouarge, Didier & Montizaan, Raymond, 2018. "Gradual retirement, financial incentives, and labour supply of older workers: Evidence from a stated preference analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 277-294.
    2. Andre Palma & Moshe Ben-Akiva & David Brownstone & Charles Holt & Thierry Magnac & Daniel McFadden & Peter Moffatt & Nathalie Picard & Kenneth Train & Peter Wakker & Joan Walker, 2008. "Risk, uncertainty and discrete choice models," Marketing Letters, Springer, vol. 19(3), pages 269-285, December.
      • André de Palma & Moshe Ben-Akiva & David Brownstone & Charles Holt & Thierry Magnac & Daniel McFadden & Peter Moffatt & Nathalie Picard & Kenneth Train & Peter Wakker & Joan Walker, 2008. "Risk, Uncertainty and Discrete Choice Models," THEMA Working Papers 2008-02, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    3. Andries de Grip & Didier Fouarge & Raymond Montizaan, 2013. "How Sensitive are Individual Retirement Expectations to Raising the Retirement Age?," De Economist, Springer, vol. 161(3), pages 225-251, September.
    4. Arie ten Cate, 2007. "Modelling the reporting discrepancies in bilateral data," CPB Memorandum 179.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Frank van Erp & Paul de Hek, 2009. "Analyzing labour supply of elderly people: a life-cycle approach," CPB Document 179, CPB Netherlands Bureau for Economic Policy Analysis.
    6. John Ameriks & Joseph Briggs & Andrew Caplin & Minjoon Lee & Matthew D. Shapiro & Christopher Tonetti, 2020. "Older Americans Would Work Longer If Jobs Were Flexible," American Economic Journal: Macroeconomics, American Economic Association, vol. 12(1), pages 174-209, January.
    7. Tunga Kantarci & Arthur Soest, 2008. "Gradual Retirement: Preferences and Limitations," De Economist, Springer, vol. 156(2), pages 113-144, June.
    8. Ameriks, John & Briggs, Joseph & Caplin, Andrew & Lee, Minjoon & Shapiro, Matthew D. & Tonetti, Christopher, 2018. "Shocks and Transitions from Career Jobs to Bridge Jobs and Retirement: A New Approach," Research Papers 3719, Stanford University, Graduate School of Business.
    9. Arthur Van Soest & Hana Vonkova, 2014. "How Sensitive Are Retirement Decisions To Financial Incentives? A Stated Preference Analysis," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(2), pages 246-264, March.
    10. Pamela Giustinelli & Matthew D. Shapiro, 2024. "SeaTE: Subjective Ex Ante Treatment Effect of Health on Retirement," American Economic Journal: Applied Economics, American Economic Association, vol. 16(2), pages 278-317, April.
    11. Hudomiet, Péter & Hurd, Michael D. & Parker, Andrew M. & Rohwedder, Susann, 2021. "The effects of job characteristics on retirement," Journal of Pension Economics and Finance, Cambridge University Press, vol. 20(3), pages 357-373, July.
    12. Michele Belloni & Rob Alessie, 2013. "Retirement Choices in Italy: What an Option Value Model Tells Us," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(4), pages 499-527, August.
    13. Songül Tolan, 2017. "The Effect of Partial Retirement on Labor Supply, Public Balances and the Income Distribution: Evidence from a Structural Analysis," Discussion Papers of DIW Berlin 1679, DIW Berlin, German Institute for Economic Research.
    14. de Grip, Andries & Fouarge, Didier & Montizaan, Raymond, 2020. "Redistribution of individual pension wealth to survivor pensions: Evidence from a stated preferences analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 402-421.
    15. Ulrike Famira-Mühlberger & Ulrike Huemer & Christine Mayrhuber, 2015. "Der Einfluss der sozialen Sicherungssysteme auf die Beschäftigungsquote Älterer in traditionellen Wohlfahrtsstaaten," WIFO Working Papers 499, WIFO.
    16. Allard Bruinshoofd & Sybille Grob, 2006. "Do changes in pension incentives affect retirement? A stated preferences approach to Dutch retirement consideration," DNB Working Papers 115, Netherlands Central Bank, Research Department.
    17. Delavande, Adeline & Rohwedder, Susann, 2017. "Changes in spending and labor supply in response to a Social Security benefit cut: Evidence from stated choice data," The Journal of the Economics of Ageing, Elsevier, vol. 10(C), pages 34-50.
    18. Bissonnette, L., 2012. "Essays on subjective expectations and stated preferences," Other publications TiSEM 71dbcdaf-a4a6-4d55-88af-f, Tilburg University, School of Economics and Management.
    19. Frank van Erp & Paul de Hek, 2009. "Analyzing labour supply of elderly people: a life-cycle approach," CPB Document 179.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    20. Charlene M. Kalenkoski & Sara Helms McCarty, 2021. "In or Out or Somewhere in Between? The Determinants of Gradual Retirement," Journal of Family and Economic Issues, Springer, vol. 42(2), pages 387-394, June.
    21. Rob Euwals & Annemiek van Vuren & Daniel van Vuuren, 2011. "The impact of reforms on labour market exit probabilities," CPB Discussion Paper 179.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    22. Vonkova, H., 2011. "The use of subjective survey data : Anchorine vignettes and stated preference methods," Other publications TiSEM dfe0c93f-a3e7-48ad-802f-e, Tilburg University, School of Economics and Management.
    23. Songül Tolan, 2015. "Die Flexibilisierung des Rentenübergangs in Deutschland," DIW Roundup: Politik im Fokus 82, DIW Berlin, German Institute for Economic Research.

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    More about this item

    Keywords

    replacement rates; ratings; gradual retirement;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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