RETIREMENT SAVINGS: A TALE OF DECISIONS AND DEFAULTS

• 成果类型: Article
• 署名作者: Dobrescu, Loretti Isabella; Fan, Xiaodong; Bateman, Hazel; Newell, Ben Rhodri; Ortmann, A.; Thorp, Susan
• 署名单位: University of New South Wales Sydney; University of Sydney
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12447
• 发表日期: 2018
• 页码: 1047-1094
• 关键词: covariance-matrix estimation; life-cycle; pension-plan; Defined contribution; health-insurance; equity premium; risk-aversion; BEHAVIOR; selection; CHOICE

摘要

This study develops a structural dynamic life-cycle model to examine the behavior of members of an industry-wide pension fund to assess both the prevalence of defaults and their impact on retirement savings. We estimate the model using the simulated method of moments on administrative data from a large Australian pension fund. Our results show that default settings strongly influence wealth accumulation. Such settings are also highly persistent, both over time and across decisions. Overall, the findings suggest that if defaults (particularly the irreversible ones) are not carefully designed, retirement savings can be severely affected.