Breaking Barriers in Retirement Planning: Evidence from Colombia's Dual-Advisory Program

• In Event: Households and Behavioral Responses in Developing Countries

Abstract

This paper investigates the impact of behavioral frictions and information provision on retirement planning through the Dual Advisory program in Colombia. The program gradually became mandatory to prevent costly mistakes and offered personalized information on switching pension plans. Using a regression discontinuity design and administrative data, we estimate the causal effects of the program on switching behavior and contribution patterns. The findings indicate that the program reduced unfavorable switches by approximately 29.5\%, due to a combination of deterring would-be switchers for whom the switch would have resulted in lower expected pension (22.7\%) and the information received by those who attended the sessions (6.7\%). However, the program also deterred favorable switches by 10.7\%. There is no evidence of the program affecting contribution frequency post-intervention.

Author

• Oscar Becerra, Universidad de los Andes