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Retirement Choices and Financial Incentives in Korea - Simulation over the Effects of Deferred Pension Expansion -

  • Journal of Insurance and Finance
  • 2011, 22(4), pp.33-72
  • Publisher : Korea Insurance Research Institute
  • Research Area : Social Science > Business Management

권혁진 1

1경남과학기술대학교

Accredited

ABSTRACT

Previous theoretical and empirical studies have provided the effects of financial incentives on retirement choices. Within my knowledge, this is the first empirical study to estimate a retirement probabilities model of financial incentives over the middle to old-aged in Korea. In this article, social security wealth and its accrual, peak value and option value are calculated as close as possible to the real value by using the dataset merged KReIS(version.3.4) with administrative archive managed by NPS. The main results are: First, the middle to old-aged decide a retirement taking a longer perspective over the change of the expected pension asset. Second, to achieve a desired effects from the improvement on the deferred pension, such as employment opportunities, the factors other than pension scheme need to change simultaneously. Lastly, the income effect of social security wealth on retirement probabilities is likely to vary depending on the specific pension scheme and socio-economic circumstances. This result needs to be further scrutinized through more developed studies.

Citation status

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