Preliminary and Incomplete

Structural models explaining retirement decisions of individuals or households in an inter-temporal setting are typically hard to estimate using data on actual retirement decisions, because choice sets are complicated and uncertain, and information on the choice sets in the data is incomplete. This paper describes an experiment in which both perceived retirement opportunities and preferences for retirement are measured. For the latter, respondents evaluate how attractive they find a number of hypothetical, simplified, retirement trajectories involving early retirement, late retirement, and gradual retirement, each with its own corresponding income path. The questions were fielded in the Dutch CentERpanel. The data on preferences are used to estimate a stylized structural model of retirement decisions under free choice. Simulations combine the information on perceived opportunities with estimated preferences and show the importance of restrictions