What You Don't Know Can't Help You: Knowledge and Retirement Decision Making

TitleWhat You Don't Know Can't Help You: Knowledge and Retirement Decision Making
Publication TypeReport
Year of Publication2003
AuthorsChan, S, Stevens, AH
InstitutionCambridge, Mass., National Bureau of Economic Research
Call Numberwp_2003/NBERwp10185.pdf
KeywordsEducation, Pensions, Retirement Planning and Satisfaction

This paper examines the relationship between pension incentives, individuals knowledge about those incentives, and the retirement decision. Combining detailed self- and employer-reported data on private pensions, we construct measures of the accuracy of individuals self-reports of their pensions. We show that the minority of well-informed individuals display dramatically larger responses to financial incentives than indicated by average estimates. These results suggest that there is substantial heterogeneity in responsiveness to pension incentives across the population. Finally, we estimate a joint model of information acquisition and retirement decision-making. These results confirm the substantial differences in behavior between informed and uninformed segments of the population.


Boston College, Center for Retirement Research, and the Social Security Administration

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Citation Key5543