The Study of the Retirement Behavior and the Welfare Analysis of Postponing Retirement Age
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| Title | The Study of the Retirement Behavior and the Welfare Analysis of Postponing Retirement Age
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| Author | Feng Jin,Han Xu and He Lixin |
| Organization | Fudan University |
| Email | jfeng@fudan.edu.cn；14110680008@fudan.edu.cn；lixinhe@fudan.edu.cn |
| Key Words | Option Value; Postponing Retirement; Welfare |
| Abstract | This paper analyses factors that affect the retirement behavior of labors in China. We focus on the incentive provided by the pension system. Based on the Option Value Model, we extend it and use the data from UHS(Urban Household Survey of China) to calculate the option value of individuals. Using Probit model, we find for an individual who is working the probability of retiring at an certain age decreases with the option value of continuing to work. Thus the incentive from pension system affect the retirement behavior of labors. Further we use the result of the empirical work to simulate the impact of postponing retirement age. We find that the policy of postponing retirement affect people at different extent from the view of option value change. Although most people are willing to delay retirement because of the increased option value, those with low income and high probability of losing will have little increase in their option value. Thus from the point of option value, the policy will not bring improvement to their welfare and they will be affected little by the policy. |
| Serial Number | WP867 |
| Time | 2015-04-14 |
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