Economic Analysis of Aging and Retirement Behavior
Summary
The economic analysis of aging and retirement behaviour explores how individuals accumulate, manage and deplete financial resources over their life span, and how health, policy and institutional settings shape these choices. Central to this field is the life-cycle framework, which models consumption, saving and labour supply decisions from working years through retirement. Research examines the trade-off between precautionary saving against longevity and health risks, the reluctance to annuitise wealth despite actuarial advantages, and the role of bequest motives in sustaining intergenerational transfers. Health shocks and long-term care costs are shown to influence both asset accumulation and the rate of decumulation, while institutional factors—pension design, means-tested benefits and housing equity—affect retirement timing and portfolio choice. Recent work has extended these insights by integrating behavioural biases in survival expectations, employing big data and machine learning to value health engagement programmes, and comparing wealth trajectories across national contexts. The global significance of this research lies in its capacity to inform pension reform, insurance innovation and public policy responses to ageing populations, ensuring financial resilience and welfare in later life.
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Economic Analysis of Aging and Retirement Behavior publication trend
The graph below shows the total number of articles in economic analysis of aging and retirement behavior across all publications each year (not limited to Nature Index journals).
Technical terms
Annuitisation: Conversion of a lump-sum asset into a guaranteed income stream for life.
Decumulation: The process by which retirees draw down savings and assets during retirement.
Bequest motive: The desire to leave wealth to heirs, influencing saving and spending behaviour.
Precautionary saving: Additional saving undertaken to guard against uncertain future expenses or income shocks.
Life-cycle model: An economic framework that tracks consumption and saving decisions over an individual’s lifetime.
References
- The financial benefits of health engagement programs to life insurers. Financial Innovation (2024).
- The asset cost of poor health. The Journal of the Economics of Ageing (2017).
- The wealth decumulation behavior of the retired elderly in Italy: the importance of bequest motives and precautionary saving. Review of Economics of the Household (2020).
- Survival Pessimism and the Demand for Annuities. The Review of Economics and Statistics (2023).
- Comparing Retirement Wealth Trajectories on Both Sides of the Pond. Fiscal Studies (2016).
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