Do early retirement ages (ERA) provide a signal about the appropriate age to retire? We examine the impact of increasing the ERA for women in a context (the UK) where the financial incentive to retire at the ERA is very limited. Despite limited financial incentives, we find that women's employment rates at the old ERA increased by 6.3 percentage points. Our results suggest that wealth effects, credit constraints and changes to marginal financial incentives to work do not drive this effect but instead that most of the excess retirements observed at the ERA are driven by a signal to retire.
Authors
Deputy Director
Carl, a Deputy Director, is an editor of the IFS Green Budget, is expert on the UK pension system and sits on the Social Security Advisory Committee.
Gemma Tetlow
Associate Director
Jonathan is an Associate Director and Head of Retirement, Savings and Ageing sector, focusing on pensions, savings and later-life economic activity.
Journal article details
- DOI
- 10.1016/j.labeco.2016.09.005
- Publisher
- Elsevier
- Issue
- Volume 42, October 2016, pages 203-212
Suggested citation
J, Cribb and C, Emmerson and G, Tetlow. (2016). 'Signals matter? Large retirement responses to limited financial incentives' 42(2016), pp.203–212.
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