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.