Financial Incentives in the Austrian PAYG-Pension System: Micro-estimation

The scope of this paper is to investigate the impact of financial incentives on the retirement decision of private sector workers in Austria. How do financial incentives embedded in the Austrian pension system impact individual retirement behaviour? We are using a unique dataset of individual social insurance spells. Micro-estimating the impact of financial incentives on the probability of retirement shows that the behavioural response to financial incentives in Austria is relatively large in international comparison. Also, there are striking behavioural differences between men and women. Using the estimates to simulate reform scenarios shows huge behavioural changes as incentives alter.