Document Type : Research Paper

Authors

• Masoud Nili ¹
• Amirreza Seyed Khosroshahi ²
• Seyed Babak Ebrahimi ³

¹ Associate Professor, Graduate School of Management and Economics, Sharif University of Technology, Tehran, Iran

² PhD student, Economics Department, Northwestern University, Evanston, IL, USA

³ PhD student, Department of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran.

Abstract

This paper seeks to address the question that whether and to what extent does Social Security retirement benefits cause early retirement. ‎This question is studied under “Option Value” and “Peak Value” models, in which the individual's retirement decision is derived as a function of future variations of present value of social security wealth. The‎ results indicate that Social Security (in the form of retirement benefits) has a significant effect on retirement ‎decisions‎ and that the future path of these benefits is an important determinant of the probability of retirement among would-be retired men.

Keywords

• retirement
• Social Security
• retirement benefits
• social security wealth
• Option Value model
• Peak Value model