TY  - JOUR
AU  - Bloom,David E.
AU  - Canning,David
AU  - Moore,Michael
AU  - Song,Younghwan
TI  - The Effect of Subjective Survival Probabilities on Retirement and Wealth in the United States
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12688
PY  - 2006
Y2  - November 2006
UR  - http://www.nber.org/papers/w12688
L1  - http://www.nber.org/papers/w12688.pdf
N1  - Author contact info:
David E. Bloom
Harvard School of Public Health
Department of Global Health and Population
665 Huntington Ave.
Boston, MA 02115
Tel: 617/432-0866
Fax: 617/432-6733
E-Mail: dbloom@hsph.harvard.edu

David Canning
Harvard School of Public Health
Department of Global Health and Population
665 Huntington Ave.
Boston, MA 02115
Tel: 617/432-6336
Fax: 617/566-0365
E-Mail: dcanning@hsph.harvard.edu

Michael J. Moore
Queens University, Belfast
E-Mail: m.moore@qub.ac.uk

Younghwan Song
Department of Economics
Social Sciences Building
Union College
807 Union Street
Schenectady, NY 12308
E-Mail: songy@union.edu
AB  - We explore the proposition that expected longevity affects retirement decisions and accumulated wealth using micro data drawn from the Health and Retirement Study for the United States. We use data on a person's subjective probability of survival to age 75 as a proxy for their prospective lifespan. In order to control for the presence of measurement error and focal points in responses, as well as reverse causality, we instrument subjective survival probabilities using information on current age, or age at death, of the respondent's parents. Our estimates indicate that increased subjective probabilities of survival result in increased household wealth among couples, with no effect on the length of the working life. These findings are consistent with the view that retirement decisions are driven by institutional constraints and incentives and that a longer expected lifespan leads to increased wealth accumulation.
ER  -