How major crises affect individual behavior : evidence from retirement cash-out choices during the Great Recession in Switzerland

Ramsden, Alma

Publication type:	Conference paper
Type of review:	Peer review (publication)
Title:	How major crises affect individual behavior : evidence from retirement cash-out choices during the Great Recession in Switzerland
Authors:	Ramsden, Alma
et. al:	No
Conference details:	21st EURAM Annual Conference, Montréal, Canada (online), 16-18 June 2021
Issue Date:	2021
Language:	English
Subjects:	Annuitization; Macroeconomic shock; Occupational pension; Risk percpetion
Subject (DDC):	330: Economics
Abstract:	A severe macroeconomic downturn influences individual choices through its impact on their economic situation. However, a deep recession might change individuals’ behavior even in the absence of direct exposure to this crisis as it effects their risk perception. We use annuitization decisions observed during the 2007-2008 financial and economic crisis to investigate this indirect channel. As annuities provide insurance against the financial consequences of longevity, individuals who are more aware of financial risks can be expected to annuitize a larger fraction of their pension wealth than their less-aware peers. While the Great Recession had differential effects on economic sectors in Switzerland, it left pension wealth of workers insured by the same large Swiss pension provider unchanged due to stringent regulation. Nonetheless, a difference-in-difference estimation uncovers that individuals working in crisis-prone export-oriented sectors prior to retirement displayed a significantly larger increase in the propensity to annuitize pension wealth than their peers from non-export sectors. In the absence of direct financial consequences, these choices are consistent with behavioral effects through changes in risk perception.
URI:	https://digitalcollection.zhaw.ch/handle/11475/22820
Fulltext version:	Published version
License (according to publishing contract):	Licence according to publishing contract
Departement:	School of Management and Law
Organisational Unit:	Institute of Public Management (IVM)
Appears in collections:	Publikationen School of Management and Law

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Ramsden, A. (2021). How major crises affect individual behavior : evidence from retirement cash-out choices during the Great Recession in Switzerland. 21st EURAM Annual Conference, Montréal, Canada (Online), 16-18 June 2021.

Ramsden, A. (2021) ‘How major crises affect individual behavior : evidence from retirement cash-out choices during the Great Recession in Switzerland’, in 21st EURAM Annual Conference, Montréal, Canada (online), 16-18 June 2021.

A. Ramsden, “How major crises affect individual behavior : evidence from retirement cash-out choices during the Great Recession in Switzerland,” in 21st EURAM Annual Conference, Montréal, Canada (online), 16-18 June 2021, 2021.

RAMSDEN, Alma, 2021. How major crises affect individual behavior : evidence from retirement cash-out choices during the Great Recession in Switzerland. In: 21st EURAM Annual Conference, Montréal, Canada (online), 16-18 June 2021. Conference paper. 2021

Ramsden, Alma. 2021. “How Major Crises Affect Individual Behavior : Evidence from Retirement Cash-out Choices during the Great Recession in Switzerland.” Conference paper. In 21st EURAM Annual Conference, Montréal, Canada (Online), 16-18 June 2021.

Ramsden, Alma. “How Major Crises Affect Individual Behavior : Evidence from Retirement Cash-out Choices during the Great Recession in Switzerland.” 21st EURAM Annual Conference, Montréal, Canada (Online), 16-18 June 2021, 2021.