Measuring Pension-benefit Expectations Probabilistically

Research aiming to understand the impact of public and private pension plans on individual decision making has been hampered by a dearth of empirical evidence on benefit expectations. We review the occasional national surveys that have sought to measure pension-benefit expectations and describe our recent efforts to improve the measurement of US Social Security benefit expectations by elicitation of probabilistic expectations about well-defined outcomes. We document striking uncertainty and heterogeneity of beliefs about the long-term existence of the Social Security system and about the level of benefits should the system survive. In so doing, we highlight the additional information that is extracted using our probabilistic elicitation method as opposed to more traditional methods that only seek point forecasts.