This study investigates the determinants of applications for US disability benefits between 1986 and 1993 using a semiparametric discrete factor procedure. Approximating a dynamic optimization model, the estimation carefully accounts for a variety of potential biases that weren’t addressed in...

Social insurance for the elderly is judged responsible for the widely observed trend towards early retirement. In a world of laissez-faire or in a first-best setting, there would be no such trend. However, when first-best instruments are not available, because health and productivity are not...

The present Paper studies the retirement incentives for elderly people in Belgium. We model the incentive structure built into the various public early retirement and retirement systems. First, we compute indicators of benefit entitlement such as the social security wealth. Then, we use three...

In many countries pension systems involve some form of earnings test; i.e., an individual’s benefits are reduced if he has labour income. This paper examines whether or not such earning tests emerge when pension system and income tax are optimally designed. We use a simple model with...

This paper studies the design of retirement and disability policies. It illustrates the often observed exit from the labour force of healthy workers through disability insurance schemes. Two types of individuals, disabled and leisure-prone ones, have the same disutility for labour and cannot be...

This paper presents new evidence on how the annuitization decision is affected by changes in the annuity's value. We take advantage of an unprecendented change in policy, which in 2004 moderated the super-mandatory Swiss occupational pension scheme: The 20 percent reduction in the rate at which...

When entering retirement most people face the decision whether they would like their defined contribution account balance paid as a lump sum or to annuitize the amount. The fact that people tend to choose the lump sum even if economic reasons suggest not to is called the annuity puzzle. In a...

Transfers to women may affect their bargaining power within the household and consequently their well-being. We analyze the effects of a pension reform in Argentina that resulted in an unexpected and substantial increase in permanent income for around 1.8 million senior women (women 60 years and...

This study investigates the labour force behaviour of older married couples in Germany. Monthly observations from the first 11 waves of the German Socio-Economic Panel (GSOEP) are used to describe and analyse the relationship between the labour force behaviour of husbands and wives. The...

An opinion poll on a representative sample of Italian citizens suggests that it does. We focus on reforms that would lengthen retirement age and/or cut pension benefits. After controlling for individual features of the respondent, we find that individuals who are more informed about the costs...