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The framing of options for retirement: Experimental tests for policy. ESRI WP604, December 2018

McGowan, Féidhlim P. and Lunn, Peter D. and Robertson, Deirdre A. (2018) The framing of options for retirement: Experimental tests for policy. ESRI WP604, December 2018. [Working Paper]

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    We hypothesise and confirm a substantial framing effect in relation to whether people opt for an annuity on retirement. Two laboratory experiments were conducted in collaboration with a national pensions regulator. Individuals demanded a higher annuity rate when pensions were initially conceived of as an accumulated lump sum – a “nest egg” or “pension pot” – than when they were initially conceived of as retirement income. The effect was recorded using both a matching and a choice procedure. Effect sizes implied more than a doubling of demand for annuities at market rates. While mindful of the need for caution in generalising from hypothetical laboratory studies, the findings have potentially strong policy implications. The framing of pension products in marketing materials and disclosures may have substantial effects on financial risks borne in later life.

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    Item Type: Working Paper
    Subjects for non-EU documents: Countries > Ireland
    EU policies and themes > Policies & related activities > social policy > welfare state
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Economic and Social Research Institute (ESRI), Dublin > ESRI Working Papers
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 29 Dec 2019 16:43
    Number of Pages: 38
    Last Modified: 29 Dec 2019 16:45

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