The Library
Followers of the pied piper of pensioners
Tools
Cuevas, Conrado, Bernhardt, Dan and Sanclemente, Mario (2023) Followers of the pied piper of pensioners. Canadian Journal of Economics, 56 (4). pp. 1517-1550. doi:10.1111/caje.12684 ISSN 0008-4085.
PDF
WRAP-followers-of-the-pied-piper-of-pensioners-Bernhardt-2022.pdf - Accepted Version Embargoed item. Restricted access to Repository staff only until 15 September 2025. Contact author directly, specifying your specific needs. - Requires a PDF viewer. Download (721Kb) |
Official URL: https://doi.org/10.1111/caje.12684
Abstract
Using survey and administrative data, we study followers of H&L, a massively popular Chilean pension advisor, establishing that financial literacy is not a panacea for poor retirement decision-making. We detail the dynamics of who followed H&L and why. H&L differentially drew financially-sophisticated investors, and exposure to H&L causally increased financial sophistication. Nonetheless, followers earned mean annual returns below all buy-and-hold strategies and were aware of this underperformance. Moreover, performance did not materially affect renewal rates. Most followers renew, citing high returns, loss minimization, and trust as reasons for following. We show followers gained information about financial matters that had clear, tangible value, and they acted on this information. We posit that followers attributed this to H&L’s skill, thus continuing to follow despite the underperformance.Using survey and administrative data, we study followers of H&L, a massively popular Chilean pension advisor, establishing that financial literacy is not a panacea for poor retirement decision-making. We detail the dynamics of who followed H&L and why. H&L differentially drew financially-sophisticated investors, and exposure to H&L causally increased financial sophistication. Nonetheless, followers earned mean annual returns below all buy-and-hold strategies and were aware of this underperformance. Moreover, performance did not materially affect renewal rates. Most followers renew, citing high returns, loss minimization, and trust as reasons for following. We show followers gained information about financial matters that had clear, tangible value, and they acted on this information. We posit that followers attributed this to H&L’s skill, thus continuing to follow despite the underperformance.
Item Type: | Journal Article | ||||||||
---|---|---|---|---|---|---|---|---|---|
Subjects: | H Social Sciences > HD Industries. Land use. Labor | ||||||||
Divisions: | Faculty of Social Sciences > Economics | ||||||||
Library of Congress Subject Headings (LCSH): | Pensions -- Chile, Pensions -- Government policy -- Chile, Retirement -- Chile, Pension trusts -- Investments -- Chile, Households -- Economic aspects | ||||||||
Journal or Publication Title: | Canadian Journal of Economics | ||||||||
Publisher: | Wiley-Blackwell Publishing, Inc. | ||||||||
ISSN: | 0008-4085 | ||||||||
Official Date: | November 2023 | ||||||||
Dates: |
|
||||||||
Volume: | 56 | ||||||||
Number: | 4 | ||||||||
Page Range: | pp. 1517-1550 | ||||||||
DOI: | 10.1111/caje.12684 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Re-use Statement: | This is the peer reviewed version of the following article: Cuevas, C., Bernhardt, D. and Sanclemente, M. (2023), Followers of the pied piper of pensioners. Canadian Journal of Economics/Revue canadienne d'économique., which has been published in final form at https://doi.org/10.1111/caje.12684. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Copyright Holders: | © Canadian Economics Association | ||||||||
Date of first compliant deposit: | 13 December 2022 | ||||||||
Related URLs: |
Request changes or add full text files to a record
Repository staff actions (login required)
View Item |