Thesis advisor: Matthew Rutledge / This paper explores the relationship between social security wealth (SSW) and the decision to retire early in five countries: the United States, Germany, Denmark, Poland, and Australia. Individual probit regressions are used to analyze the impact of SSW on early retirement in each specific country. Next, a cross-country probit model including the United States, Germany, and Denmark is estimated to highlight the same relationship in three very different social insurance schemes. Finally, a counterfactual experiment is run in order to examine the impact of a 6.67 percent benefit cut on the likelihood of early retirement. This paper finds that SSW is associated with a greater likelihood of early retirement in the United States, Poland, and Denmark. However, these results are only statistically significant in the United States and Poland. Conversely, the relationship is statistically significant and negative in Australia, and statistically insignificant and negative in Germany. The counterfactual experiment reinforces these findings, demonstrating a particularly high responsiveness of a benefit cut in Denmark and Poland relative to the other countries. The results of the cross-country model finds that SSW has the largest positive effect on early retirement in the United States, followed by Germany, and finally Denmark. However, these contradictory results are not statistically significant. This paper presents interesting policy implications to consider in the United States. The statistically significant but small effect of SSW on early retirement in the United States indicates that policies aimed at reducing benefits as a means of decreasing the likelihood of early retirement may not be the most effective. Additionally, the creation of a system similar to Australia’s low-cost superannuation may be worth investigating, as superannuation benefits appear to have a similar negative impact on early retirement as pension benefits in the United States. / Thesis (BA) — Boston College, 2017. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Departmental Honors. / Discipline: Economics.

Il primo capitolo studia le decisioni di pensionamento dei lavoratori dipendenti nel settore-privato atraverso un approccio in forma quas-ridotta . seguendo il lavoro di stock e wise (1990), vengono modellate le decisioni individuali concentrandosi sugli incentivi insiti nel sistema pensionistico italiano catturate dalla ricchezza pensionistica e da altre misure di incentivo. il secondo capitolo consolida i risultati del primo e riconosce che attraverso un approccio detto esperimento naturale e l'utilizzo di variazioni esogene generate dalla riforma pensionistica del 1992 si può migliorare in termini di identificazione dell'effetto della ricchezza pensionistica sulla decisione di pensionamento. il capitolo contiene anche un insieme di simulazioni che predicono il comportamento dei lavoratori con diversi regimi pensionistici e rappresenta un test della validità predittiva del modello usato nel primo capitolo. il terzo capitolo è un'applicazione del modello option value in cui vengono stimati i parametri delle funzioni di utilità, e dove i lavoratori decidono quando andare in pensione confrontando il valore atteso di lavorare un anno aggiuntivo con il valore atteso di andare in pensione subito. / The first chapter studies the exit behaviour of private-sector employees through a simple "quasi-reduced form" approach. Starting from the seminal paper by Stock and Wise (1990), it models individual determinants of retirement choices focusing on the incentives embedded in the Italian Social Security system, captured by Social Security wealth and some incentive measures. The second chapter exploits the results of the first and it is devoted to their consolidation Using a different framework, namely that of a "natural experiment", much more can be gained in terms of identification of the relevant incentive effects by means of the exogenous variation introduced by the reform legislated in 1992. Further, the chapter contains a set of simulations in order to test the predictive validity of the results in the first chapter and to know how the exit behaviour of workers would have been under different pension regimes. The last chapter is an application of the option value model. It requires the estimation of the utility parameters of the model where workers compare the expected utility of working one more year and the expected utility of retiring immediately.