February 2017

04Feb

The Separation of Intelligence and Control: Retirement Savings and the Limits of Soft Paternalism

By Jacob Russell “Soft paternalism” is in vogue among academics and lawmakers, but too much is being asked of it. This Article studies soft paternalist techniques — including nudging and disclosure — that have been used in the employer-sponsored retirement system. Defined-contribution retirement plans represent an ideal test case for libertarian paternalism: there has been extensive experimentation, and it has often been held up as a success by nudge advocates. In particular, this Article focuses on investment allocation decisions in...

February 4, 2017
Articles, Regulation, Savings,
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04Feb

The Life-Cycle Personal Accounts Proposal for Social Security: An Evaluation

By Robert J. Shiller The life-cycle accounts proposal for Social Security reform has been justified by its proponents using a number of different arguments, but these arguments generally involve the assumption of a high likelihood of good returns on the accounts. A simulation is undertaken to estimate the probability distribution of returns in the accounts based on long-term historical experience. U.S. stock market, bond market and money market data 1871-2004 are used for the analysis. Assuming that future returns behave...

February 4, 2017
Articles, Labor Market, Savings
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04Feb

Financial Literacy and Financial Education: Review and Policy Implications

By Annamaria Lusardi In recent years, as workers have gained an unprecedented degree of control over their pensions and savings, the importance of financial literacy and financial education has increased considerably. Large changes in the structure of financial markets, labor markets, and demographics in developed countries have led to this change. Consumers have a bewildering array of complex financial products - from reverse mortgages to annuities - to choose from, making saving decisions increasingly complex. Knowledge about the working of...

February 4, 2017
Articles, Regulation, Savings,
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04Feb

Adequacy (1) Pension entitlements, replacement rates and pension wealth

By Edward Whitehouse This note briefly sets out a methodology for calculating prospective pension entitlements promised in the future to today’s workers. This method can (and has been) applied to a wide range of countries with very different pension systems. The entitlements shown here are prospective. It looks at theoretical values and so illustrates the way the current parameters and rules of pension systems will work for different example individuals. This can be used to assess the adequacy of future...

February 4, 2017
Adequacy, Articles, Regulation,
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04Feb

Economic integration across Latin America: evidence from labor markets, 1990-2013

By Daniel Lederman & Raymond Robertson Combining macroeconomic and microeconomic data and three indicators of international market integration, this paper assesses the degree to which Latin American labor markets are integrated. The results suggest that relative to East Asia, Latin American labor markets are somewhat more integrated, but considerable differences across countries persist. In addition, the evidence indicates that the degree of labor market integration across Latin American borders is significantly less than that of labor markets within Mexico and...

February 4, 2017
Articles, Labor Market,
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04Feb

Understanding the dynamics of labor income inequality in Latin America

By Carlos Rodriguez Castelan, Luis Felipe Lopez-Calva, Nora Lustig & Daniel Valderrama Since the early 2000s, after a long period of wide and persistent gaps, Latin America has experienced a steady decline in income inequality. This paper presents evidence of a trend reversal in labor income inequality, which is considered the main factor behind such a decline in income inequality across the region. The analysis shows that, while labor income inequality increased during the 1990s, with heterogeneous experiences across countries,...

February 4, 2017
Articles, Labor Market
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04Feb

Enforcement capacity and the impact of labor regulation : evidence from the Russian Federation

By Álvaro Gonzalez, Siddharth Sharma & Hari Subhash The impact of business regulations on firms could depend on how the regulations are enforced in practice. Exploiting variation in enforcement capacity across the Russian Federation's administrative regions, this paper examines whether the enforcement of restrictive regulations on hiring and firing workers affects how firms adjust employment during industry upswings and downswings. The analysis finds that the extent to which firms adjust employment upward during industry upswings and downward during downswings is...

February 4, 2017
Articles, Labor Market, Regulation, Supervision,
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04Feb

World Bank Pension Reforms and Development Patterns in the World System and in the Wider Europe: A 109 Country Investigation Based on 33 Indicators of Economic Growth, and Human, Social and Ecological Well-Being, and a European Regional Case Study

By Arno Tausch On the first anniversary of the death of Nobel Laureate Professor Franco Modigliani, the Luxembourg Institute for European and International Studies (LIEIS) organised a conference on 'Reforming European Pension Systems' on 24 and 25 September 2004 in Schengen. Initially, the intention was to hold this conference in the presence of Professor Modigliani who had written a comprehensive paper for the LIEIS. However, due to ill health, such a meeting had to be postponed repeatedly. A third date was...

February 4, 2017
Adequacy, Articles, Regulation, Savings, , ,
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04Feb

Strategic and Tactical Allocation to Commodities for Retirement Savings Schemes

By Theo Nijman & Adrianus Petrus Swinkels We examine whether the variance risk of investment portfolios of pension schemes investing in traditional asset classes can be reduced by extending the set of traditional investment opportunities with commodities. We investigate the economic and statistical significance of shifts in the strategic (three year), myopic (quarterly), and tactical (quarterly rebalancing) mean-variance frontier for pension schemes with a fixed liability portfolio. We find substantial differences in optimal strategic allocations for pension schemes with nominal...

February 4, 2017
Articles, Investing, Savings,
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04Feb

Employee Participation, Corporate Governance and the Firm: A Transatlantic View Focused on Occupational Pensions and Co-Determination

By Markus Roth Corporate governance and the theory of the firm are discussed primarily from the shareholders’ perspective. This point of view neglects the tremendous effects of private pensions and of co-determination as well as interdependencies between co-determination, pensions and corporate governance. Since in the private pension world the firm serves as an investment tool, the focus should be shifted from short-term interests to concepts maximising long-term shareholder value. In this context, also moderate forms of co-determination might serve as...

February 4, 2017
Articles, Corporate Governance, Labor Market,
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