The effect of pensions on retirement behavior

In response to the projected financial instability of the Social Security system, workers will likely place greater reliance on their own pensions to finance their retirement. My dissertation analyzes the relationship between pensions and retirement behavior, and emphasizes the role of pension plan characteristics on retirement timing and the saving of resources to prepare for retirement. I find that while husbands and wives respond significantly to the characteristics of their own pensions when choosing a retirement date, only the wives are also sensitive to the pensions of their husbands when timing their retirement. Consequently, the fact that retirement among wives is often based on more than financial reasons suggests that simply improving the generosity of their pensions may be inadequate in alleviating poverty among elderly women.; In this dissertation I also contribute to the literature by examining the effect of the plan match rate on contributory behavior while emphasizing differential contribution patterns between low and high earners. The evidence suggests that contributions are positively related with low match rates and negatively related with high match rates. Match rates appear to be even more negatively related to contributions among low earners than for others. Therefore if the objective is to increase employee contributions to 401(k) plans, substantially increasing matching provisions may be less effective than a relatively moderate match rate increase.