Measuring Subjective Survival Expectations:Do Response Scales Matter?

This paper analyzes the test-retest reliability of subjective survival expectations that are elicited on two widely used response scales: an 11-point scale from 0 to 10 and a full percentage scale from 0 to 100. We compare responses of the same individuals in two surveys fielded in the same month. Reliability is evaluated both at the level of reported probabilities and through a model that relates expectations to socio-demographic variables. Test-retest correlations of survival probabilities are between 0.5 and 0.7, similar to subjective well-being. Only 20% of probabilities are equal across surveys, but up to 61–77% are consistent once we account for rounding. Both scales perform similarly in terms of response rates, internal consistency and fifty-fifty answers. Models that analyze all probabilities jointly reveal similar associations between most covariates and the hazard of death in test and retest datasets. Moreover, expectations are persistent at the level of the individual and this unobserved heterogeneity is strongly correlated across surveys (r ≈  0.8-0.9). Finally, we use a calibrated life cycle model to map survival expectations into wealth and labor supply. Wealth accumulation is sensitive to expectations and correcting for rounding substantially improves reliability of simulated wealth profiles. Taken together this evidence suggests that the two elicitation scales yield reliable measures of expectations, especially when aggregated into individual-level subjective survival curves

Heterogeneous Default Effects on Retirement Saving:Sledgehammers or Precision Instruments

This paper uses a randomized experiment in a representative sample from the Dutch population to investigate the effect of various defaults on retirement saving. In light of the Dutch pension system, with high contributions that afford generous income replace- ment but no flexibility other than the timing of retirement, we consider defaults that encourage less saving as well as more. The aggregate effects of defaults at deviations from the status quo are symmetric and large: they increase the fraction that either suspends or doubles premium payments for three years by 22 percentage points (pp) on a base of less than 10%. The status quo default is less powerful, raising the fraction by 6–13pp from a baseline around 60%. Rich survey data on demographics and prefer- ences matched with administrative records of wealth and forecasted pensions indicate that the different default effects are driven by different groups. A default of increased saving disproportionately affects those with self-control issues, but has a smaller effect on individuals prone to procrastination. Moreover, this is the only default that inter- acts with variables related to preparedness for retirement, with a larger effect on those with high housing wealth and high adequate expenditure goals. The saving reduction default affects women more strongly and has a weaker effect on university graduates

Heterogeneous Default Effects on Retirement Saving:Sledgehammers or Precision Instruments

This paper uses a randomized experiment in a representative sample from the Dutch population to investigate the effect of various defaults on retirement saving. In light of the Dutch pension system, with high contributions that afford generous income replace- ment but no flexibility other than the timing of retirement, we consider defaults that encourage less saving as well as more. The aggregate effects of defaults at deviations from the status quo are symmetric and large: they increase the fraction that either suspends or doubles premium payments for three years by 22 percentage points (pp) on a base of less than 10%. The status quo default is less powerful, raising the fraction by 6–13pp from a baseline around 60%. Rich survey data on demographics and prefer- ences matched with administrative records of wealth and forecasted pensions indicate that the different default effects are driven by different groups. A default of increased saving disproportionately affects those with self-control issues, but has a smaller effect on individuals prone to procrastination. Moreover, this is the only default that inter- acts with variables related to preparedness for retirement, with a larger effect on those with high housing wealth and high adequate expenditure goals. The saving reduction default affects women more strongly and has a weaker effect on university graduates

Cutting one’s coat according to one’s cloth:How did the Great Recession affect retirement resources and expenditure goals?

Hervorming Sociale Regelgevin

Preferences for Long-Term Care Services: Bequests, Informal Care and Health Expectations

This paper studies people’s preferences for formal long-term care services provided at home, and examines how long-term care preferences relate to saving motives, such as the relative importance and type of the bequest motive, the availability of informal care, and health expectations. To elicit long-term care preferences, we use a stated choice experiment fielded in the Dutch LISS panel in which we ask people to choose between long-term care insurance plans offering in-kind benefits provided at home that differ in generosity. The results show that there is viable demand for insurance that covers long-term care services at home. Long-term care services represent a different value for different people depending on individual characteristics and expectations about long-term care needs. Having children, access to informal care, and a strong strategic-bequest motive reduces the willingness to pay for formal long-term care services. These results contribute to the understanding of saving behavior after retirement and design of long-term care insurance policies

Can Survey Participation Alter Household Saving Behaviour?

We document an effect of survey participation on household saving. Identification comes from random assignment to modules within a population‐representative Internet panel. The saving measure is based on linked administrative wealth data. Households that responded to a detailed questionnaire on needs in retirement reduced their non‐housing saving rate by 3.5 percentage points, on a base of 1.5%. The survey may have acted as a salience shock, possibly with respect to reduced housing costs in retirement. Our findings present an important challenge to survey designers. They also add to the evidence of limited attention in household financial decision making