TY  - JOUR
AU  - Chan,Sewin
AU  - Stevens,Ann Huff
TI  - Retirement Incentives and Expectations
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8082
PY  - 2001
Y2  - January 2001
UR  - http://www.nber.org/papers/w8082
L1  - http://www.nber.org/papers/w8082.pdf
N1  - Author contact info:
Sewin Chan
Robert F. Wagner Graduate School of Public Service
New York University
295 Lafayette Street - 2nd floor
New York, NY 10012
Tel: 212/998-7495
Fax: 212/995-3890
E-Mail: sewin.chan@nyu.edu

Ann Huff Stevens
Department of Economics
One Shields Avenue
University of California, Davis
Davis, CA  95616
Tel: 530/752-3034
E-Mail: annstevens@ucdavis.edu
AB  - This paper investigates the responsiveness of individuals' retirement expectations to forward-looking measures of pension wealth accumulations. While most of the existing literature on retirement has used cross-sectional variation to identify the effects of pension and Social Security wealth on retirement behavior, we estimate fixed-effects regressions to control for unobserved heterogeneity that might be correlated with retirement plans and wealth. As expected, we find significant effects of future pension wealth accumulations on retirement expectations, but the magnitude of these effects differs substantially between OLS and fixed-effects estimation. Coefficients from fixed-effects estimation are at most half the magnitude of similar OLS regressions. Our results point to potentially large biases from the failure to control for unobserved heterogeneity in empirical models of retirement-related outcomes.
ER  -