Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314936 
Year of Publication: 
2023
Citation: 
[Journal:] Journal of Public Economics [ISSN:] 1879-2316 [Volume:] 221 [Article No.:] 104845 [Publisher:] Elsevier [Place:] Amsterdam [Year:] 2023 [Pages:] 1-37
Publisher: 
Elsevier, Amsterdam
Abstract: 
This paper examines how households adjust their savings and consumption expenditure in response to an anticipated increase in the early retirement age (ERA). We examine the 1999 pension reform in Germany, which increased the ERA for women born after 1951 by at least three years. First, we present suggestive evidence that women update their retirement planning in response to the reform. Using the German Income and Consumption Survey, we find a negative impact on private savings of 0.6 percentage points that is driven by households with married women. We show that households consisting of highly educated women and homeowners are more likely to reduce their savings rates. Furthermore, we find that the treated households increase their leisure spending while maintaining an unchanged level of disposable income. Our findings suggest that the households anticipate experiencing a lifetime income increase and reduce their savings rate to smooth consumption.
Subjects: 
Pension reform
early retirement age
savings
pension wealth
consumption expenditure
JEL: 
D14
J14
J26
Published Version’s DOI: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)

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