DeFiPP Seminar
Dynamic Incentives in Retirement Earnings-Replacement Benefits
Date : 13/10/2020 16:00 - 13/10/2020 17:30
Lieu : E12
Orateur(s) : Mariana Zerpa (KULeuven)
Organisateur(s) : Benoît Decerf
Abstract: We analyze dynamic incentives created in pension systems by the use of a small set of final years of earnings to compute benefits. Using social security administrative records and household surveys from Uruguay, we show that self-employed workers and employees of small firms respond to these incentives by increasing reported income in the benefit-calculation window. We find that these responses are explained by decreases in underreporting of earnings and not changes in total earnings or hours worked. Back of the envelope calculations estimate this behavior increases the cost of pensions for these workers by between 1.9% and 2.6%. (co-authors Andres Dean and SebastianFleitas)
More information: DeFipp Seminar
Contact :
Benoît Decerf
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benoit.decert@unamur.be
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