|Author Name||SHIMIZUTANI Satoshi (Consulting Fellow, RIETI) /OSHIO Takashi (Hitotsubashi University)
|Creation Date/NO.||October 2012 12-E-068|
|Research Project||Toward a Comprehensive Resolution of the Social Security Problem: A new economics of aging
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This paper explores the public pension claiming behavior of the Japanese. First, we perform financial simulations and estimate the expected utility, depicting the typical patterns of pension benefits in a lifecycle model. We show that the optimal retirement age depends on the beneficiaries' mortality risk, discount rate, initial wealth, and risk attitude. Second, we use individual-level data from the Japanese Study on Aging and Retirement to examine empirically the determinants of the take-up timing. We find supportive evidence that most of the factors examined in the simulation are indeed significantly associated with early claiming of pension benefits for wage earners.