Business Commons^™

The Economics Of Retirement Behavior, Olivia S. Mitchell, Gary S. Fields

Gary S Fields

This paper examines the role of economic factors in determining retirement behavior using a unique new data archive on more than 8,700 workers covered by 10 different pension plans. We build on our earlier work by estimating several different retirement models including both linear and discrete choice formulations. This framework provides new insights into how and why retirement ages differ across firms. We conclude that older workers' income opportunities differ depending on their pension rules, which in turn have a powerful influence on their retirement patterns. In addition, the models indicate that older workers' tastes for income are not uniform, …

Estimating The Effects Of Changing Social Security Benefit Formulas, Gary S. Fields, Olivia S. Mitchell

Gary S Fields

[Excerpt] The U.S. Social Security system faces serious financial difficulties in both the short and the long run. The short-run problem is that the system has very meager financial reserves. In the long run—after the year 2010, when the post-World-War-II baby-boom generation reaches retirement age—the financial problems of Social Security will intensify because of population aging and the consequent decline in the ratio of workers to retirees.

These problems have led to proposed reforms aimed at assuring the financial stability of the system. The question addressed here is: what effects would these reforms have on three variables—retirement ages, retirement incomes, …