This mix of state and private pension provision in the United Kingdom provides a rare degree of variation in pension incentives for retirement. Using a sample of individuals from the UK Retirement Survey, the paper models the probability of retirement in terms of the incentives underlying the individual's pension plan as well as other socio-economic factors. It follows an option value approach and allows a separate role for pension wealth, for spouse's economic characteristics and for demographic characteristics. It distinguishes between SERPS and private schemes and models eligibility to disability. The results point to significant retirement incentive effects from the pension system.
Authors
Richard Blundell
Richard is Co-Director of the Centre for the Microeconomic Analysis of Public Policy (CPP) and Senior Research Fellow at IFS.
Costas Meghir
Costas is a Research Fellow of the IFS and a Professor of Economics at Yale University and a Visiting Professor at University College London.
Sarah Smith
Sarah is a Research Associate at the IFS and Head of the Department of Economics at the University of Bristol with interest in applied microeconomics.
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