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IFS-STICERD Public Economics Seminar

Retirement Consumption and Pension Design

Camille Landais (LSE), joint with Jonas Kolsrud, Daniel Reck, and Johannes Spinnewijn

Wednesday 24 February 2021 16:30 - 17:30

Many of our seminars and public events this year will continue as in person or as hybrid (online and in person) events. Please check our website listings and Twitter feed @STICERD_LSE for updates.

Unless otherwise specified, in-person seminars are open to the public.

Those unable to join the seminars in-person are welcome to participate via zoom if the event is hybrid.

About this event

This paper uses patterns in consumption from Swedish administrative data to evaluate the welfare costs of increasing incentives for later retirement. We find that increasing the steepness of the pension benefits profile, as many countries, including Sweden, have recently done, entails substantial redistributive costs. The overall gradient of consumption with respect to the retirement age is steep. Accounting for selection on health and life expectancy reinforces our conclusions about the redistributive cost of these reforms. Apart from the differences in consumption levels, we also find that the drops in consumption around retirement are larger for those who retire prematurely (before 61), while MPCs are lower for those who retire late (after 65). A striking non-monotonicity arises for early retirees (between 61 and 64), who have higher household income and assets. This significantly reduces the redistributive cost of steeper incentives, but only for this specific age range.

This seminar series is jointly organized by the IFS and STICERD.

IFS-STICERD Public Economics seminars are held on Wednesdays in term time at 12.30-13.45 IN PERSON at the IFS.

Seminar organisers: Stuart Adam (IFS), Monica Costa Dias (IFS), Xavier Jaravel (LSE), Camille Landais (LSE), Attila Lindner (UCL), Joana Naritomi (LSE), and Johannes Spinnewijn (LSE).

For further information please contact Peter Levell: .

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