Early Retirement Pension Benefits / Jeremy I. Bulow.

By:

Bulow, Jeremy I

Contributor(s):

National Bureau of Economic Research

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w0654.Publication details: Cambridge, Mass. National Bureau of Economic Research 1981.Description: 1 online resource: illustrations (black and white)Online resources:

Available additional physical forms:

Hardcopy version available to institutional subscribers

Abstract: Early retirement options alter the accrual of pension benefits, increasing the fraction of total benefits accrued in the early years of work. This is true regardless of whether de facto no worker exercises the early retirement option. No currently used actuarial method correctly calculates the cost of an early retirement option. Early retirement options must be considered in calculating age/compensation profiles. Furthermore, the early retirement option can effectively be used to encourage less productive older workers to retire, without the firm having to reduce the nominal salary of such workers.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w0654 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w0651 Consumption Preferences, Asset Demands, and Distribution Effects in International Financial Markets /	nber w0652 The Federal Minimum Wage, Inflation, and Employment /	nber w0653 Indexation of the Minimum Wage with Rational Expectations /	nber w0654 Early Retirement Pension Benefits /	nber w0655 The Effects of Government Regulation on Teenage Smoking /	nber w0656 Minimum Wages and the Demand for Labor /	nber w0657 Housing Behavior and the Experimental Housing Allowance Program: What Have We Learned? /	Next

April 1981.

Early retirement options alter the accrual of pension benefits, increasing the fraction of total benefits accrued in the early years of work. This is true regardless of whether de facto no worker exercises the early retirement option. No currently used actuarial method correctly calculates the cost of an early retirement option. Early retirement options must be considered in calculating age/compensation profiles. Furthermore, the early retirement option can effectively be used to encourage less productive older workers to retire, without the firm having to reduce the nominal salary of such workers.