TY - JOUR
T1 - Microsimulation of pension reforms
T2 - Behavioural versus nonbehavioural approach
AU - Borella, Margherita
AU - Moscarola, Flavia Coda
PY - 2010/10
Y1 - 2010/10
N2 - We analyse the impact of various pension regimes, as shaped by recent Italian reforms, on retirement age, adequacy issues, and redistribution. We add to the literature on microsimulation by accounting for individuals' reactions to financial incentives when deciding to retire. We find that shifting from a generous defined benefit (DB) system to an actuarially fair notional defined contribution (NDC) system induces individuals, particularly men, to postpone retirement. Voluntary postponement of retirement would grant employees a replacement rate comparable to that obtained in the pre-reform DB regime, while the self-employed experience a substantial reduction in their replacement rate.
AB - We analyse the impact of various pension regimes, as shaped by recent Italian reforms, on retirement age, adequacy issues, and redistribution. We add to the literature on microsimulation by accounting for individuals' reactions to financial incentives when deciding to retire. We find that shifting from a generous defined benefit (DB) system to an actuarially fair notional defined contribution (NDC) system induces individuals, particularly men, to postpone retirement. Voluntary postponement of retirement would grant employees a replacement rate comparable to that obtained in the pre-reform DB regime, while the self-employed experience a substantial reduction in their replacement rate.
KW - Microsimulation
KW - public pensions
KW - retirement
UR - http://www.scopus.com/inward/record.url?scp=80052213517&partnerID=8YFLogxK
U2 - 10.1017/S1474747209990163
DO - 10.1017/S1474747209990163
M3 - Article
SN - 1474-7472
VL - 9
SP - 583
EP - 607
JO - Journal of Pension Economics and Finance
JF - Journal of Pension Economics and Finance
IS - 4
ER -