Spousal and survivor benefits in option value models of retirement: an application to Belgium

Abstract : We study retirement incentives with an augmented reduced form option value model à la Stock and Wise (1990). We propose methodological extensions to better reflect the respective incentives faced by singles and couples. Our results show that a more comprehensive modeling of couples’ incentives leads to very different patterns of retirement incentives – particularly for women. We apply the new indicators to data from the Survey of Health, Ageing and retirement in Europe in Belgium and find two key results. First, contrary to several previous studies, we obtain a positive signed income effects. Second, we find very different retirement incentives for men and women, with little flexibility in the retirement decision for men and substantially more flexibility for women as a function of financial incentive and household composition.
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Submitted on : Thursday, July 11, 2019 - 11:47:25 AM
Last modification on : Friday, July 12, 2019 - 1:24:27 AM

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Alain Jousten, Mathieu Lefebvre. Spousal and survivor benefits in option value models of retirement: an application to Belgium. Journal of Pension Economics and Finance, Cambridge University Press (CUP), 2019, 18 (1), pp.66-87. ⟨10.1017/S1474747217000324⟩. ⟨hal-02180074⟩

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