Pension Policy Literacy and Retirement Expectations
Background and Objectives: This is the first experimental study on the effects of information on the expected age of retirement. Given the drawbacks of unrealistic retirement expectations it specifically considers the impact of non-partisan information on future demographic aging and forecasted pension benefit levels.
Research Design and Methods: An online survey experiment was carried out in the United States, Germany and Spain in 2018, using an internet access panel. We assign respondents to two random treatments: one informing about the change in the projected share of the population older than 65 years between 2015 and 2040 (demographic treatment) and another informing about the projected change in pension replacement rates also between 2015 and 2040 (benefits treatment). The study reports treatment effects on the expected age of retirement.
Results: The benefits treatment has a strong influence on retirement expectations. US respondents informed about the expected decline in pension replacement rates expect to retire two years later than respondents not informed about that decline. In Spain, this treatment leads to postponement of expected retirement of about 9 months, while no significant effect is found in Germany. In addition, the demographic treatment does not affect retirement expectations in any country. Respondents informed about future population aging do not display different expected ages of retirement than respondents not exposed to this information.
Discussion and implications: People’s retirement expectations are sensitive to information regarding future changes in pension generosity, but not regarding population aging. The results suggests that information campaigns on declining pension replacement rates would encourage extending working lives.
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