To defer or not defer? UK state pension and work decisions in a lifecycle model

Kanabar, Ricky and Simmons, Peter (2016) 'To defer or not defer? UK state pension and work decisions in a lifecycle model.' Applied Economics, 48 (58). pp. 5699-5716. ISSN 0003-6846

Preview

Text
Repository_copy.pdf - Accepted Version
Download (6MB) | Preview

Official URL: http://dx.doi.org/10.1080/00036846.2016.1184374

Abstract

The UK state pension (which depends only on age) includes an option to defer take up which yields either a subsequent lump sum or higher weekly pension. We analyse the joint decisions on pension deferral and intertemporal labour supply/participation in a lifecycle setting. We show that deferral is purely a financial decision, but the impact of deferral on work decisions depends on preferences, wage rates, non-labour income and initial wealth. To exactly characterize this, we use a quasilinear utility function and provide calibrated simulations. We also discuss the choice between a lump sum or increased weekly pension.

Item Type:	Article
Uncontrolled Keywords:	Retirement; labour supply; ageing; UK state pension; J14; J18; J22; J26
Subjects:	H Social Sciences > H Social Sciences (General)
Divisions:	Faculty of Social Sciences Faculty of Social Sciences > Institute for Social and Economic Research
SWORD Depositor:	Elements
Depositing User:	Elements
Date Deposited:	26 May 2016 10:13
Last Modified:	15 Jan 2022 00:29
URI:	http://repository.essex.ac.uk/id/eprint/16791

Actions (login required)

View Item