The Effect of Private Wealth on the Retirement Rate: An Empirical Analysis

Theoretical models predict a positive effect of the level of private wealth on retirement. In many countries, there is a trend towards the introduction of more individual freedom of choice in pension schemes. The level of private wealth will become an increasingly important factor in the retirement decision. Empirical analysis of retirement behaviour of elderly workers so far has concentrated on properties of the pension system. For a sample of elderly male workers in the Netherlands, we empirically analyse the effect of wealth on the retirement rate. We find evidence for a positive effect of wealth on (early) retirement.