Relabeling, Retirement and Regret

Abstract

Can simply changing the public definition of a normal retirement age impact retirement, without any associated financial incentive changes? We study a reformulation of the retirement system in Finland that relabeled retirement ages with only modest and continuous changes in financial incentives. We find that relabeling matters: both graphical evidence and estimated hazard models reveal an enormous change in retirement when individuals face a newly defined ‘‘normal retirement” age. We also find evidence consistent with increased retirement ‘‘regret,” as the marginal workers induced to retire by relabeling are more likely to return to work.

Publication Information

Gruber, J., Kanninen, O., & Ravaska, T. (2022), Relabeling, Retirement and Regret, Journal of Public Economics, 211, 104677.

• ISSN: 0047-2727