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Retirement Expectations in the Aftermath of a Pension Reform


In this paper we investigate the effects of a pension reform on workers’ retirement expectations. To assess whether individuals revise their expectations in the direction suggested by changes in legislation, we exploit the 2011 Italian pension reform. Using 2010 and 2012 data for a representative sample of the Italian population, we find that the reform worsened workers’ expectations on replacement rate. Yet, this is not consistent with the tightening of age requirements in a defined contribution context. One explanation is that workers may not be fully aware of the mechanism of a defined contribution pension system.

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  1. The 2011 pension reform is also known as the “Fornero reform” from the name of the Minister of Labor who proposed it.

  2. Younger individuals in particular have suffered from the economic downturn, since they faced a high unemployment and low average entry wages.

  3. Notional capital refers to the fact that contributions are not accumulated in a fund. In fact, current workers’ contributions are used to pay for current retirees’ pension benefits.

  4. The rules were slightly different depending on whether individuals were employees or self-employed.

  5. The datasets analyzed in the current study are available at the Bank of Italy’s website.

  6. The questions on expected retirement age and expected replacement rate are asked to employed individuals only.

  7. Nevertheless, we acknowledge the possibility that individuals might have changed their expectation because of other factors we are not able to control for.

  8. In Italy individuals usually stop working as soon as they have reached the full retirement age. In fact, research has showed that the large majority of workers retire when they reach the first eligibility for full benefits (e.g., Ciani, 2016).

  9. This trend is consistent with the findings by Carta and De Philippis (2021).

  10. An increase in the retirement age for an individual under a DB pension scheme could also determine a higher replacement rate if accompanied by a higher seniority at retirement.

  11. Through the fixed effects specification, we are also able to control for individuals’ expectations on their own carrier and possible spells of unemployment, had they been stable between 2010 and 2012.

  12. More specifically, Carta and De Philippis (2021) focused on women aged between 45 and 59, with at least 10 but less than 40 accrued years of contribution, and men aged between 45 and 64, with at least 20 but less than 40 accrued years of contribution.


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Correspondence to Noemi Oggero.

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The datasets analyzed in the current study are available at the Bank of Italy’s website,

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Oggero, N. Retirement Expectations in the Aftermath of a Pension Reform. Ital Econ J (2022).

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  • Expectations
  • Pension reforms
  • Retirement
  • Information

JEL Classification

  • D84
  • H55
  • J26
  • D14