Do economic policymakers practice what they preach? the case of pension decisions

Momi Dahan, Tehila Kogut, Moshe Shalem

Research output: Working paper/preprintWorking paper


This paper examines whether policymakers, economists at the Israeli Finance Ministry, act in their personal pension decisions in accordance with the rational behaviour assumptions underlying the pension policies they advance. We find that while economists' decisions regarding three other important decisions such as buying an apartment, a car and a large appliance, are largely in line with rational models, pension decisions deviate significantly from these models. A large share of these policymakers hardly search for relevant information regarding their chosen pension fund, do not know the most necessary information and consider only one option before choosing the preferred pension fund. A significant difference was found between specialized policymakers (economists in the Pension Division) and general policymakers (economists in all other Divisions) showing that specialized policymakers are significantly less biased.
Original languageEnglish
Place of PublicationMunich
PublisherCESifo Group
Number of pages37
StatePublished - 2009

Publication series

NameCESifo Working Paper Series
PublisherCESifo Group


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