June 2017

04Jun

Long-Run Biological Interest Rate for Pay-as-You-Go Pensions in Advanced and Developing Countries

By Masahiro Nozaki (International Monetary Fund) How much of an internal rate of return would a sustainable pay-as-you-go pension system offer current and future generations equally? The answer is the sum of the Long-Run Biological Interest Rates (LBIR), the real-world equivalent of Samuelson's (1958) biological interest rate, and future productivity growth. Reflecting global population ageing, the median LBIR across 172 countries is as low as 1 percent per year. The LBIRs are particularly low in advanced countries, estimated to be...

June 4, 2017
Aging, Articles, Labor Market, Pension design, ,
Read more...
04Jun

Annuities and Retirement Income Planning

By Patrick J. Collins (Schultz Collins) This CFA Institute Research Foundation brief provides a broad-brush survey of the US annuity marketplace as of the end of 2014. It is a short and generic introduction to currently available annuity contracts. It is oriented toward both investors who are contemplating the use of annuities to generate income and hedge longevity risk and their advisers. It does not discuss the literature that evaluates annuities as instruments to enhance utility in the context of...

June 4, 2017
Aging, Articles, Investing,
Read more...

May 2017

28May

Fiscal Challenges of Population Aging in Brazil

By Alfredo Cuevas, Izabela Karpowicz & Mauricio Soto (International Monetary Fund); Carlos Mulas-Granados (Government of the Kingdom of Spain)  In recent decades, population has been aging fast in Brazil while old age pensions and health related spending have increased. As the population ages, the spending trend threaten to reach unsustainable levels absent reforms. Increasing the retirement age is key, but by itself will not provide sufficient savings to close the pension system financing gap, and reforms reducing replacement rates are...

May 28, 2017
Aging, Articles, Regulation, Savings, ,
Read more...
22May

Interactions between Financial Incentives and Health in the Early Retirement Decision

By Pilar Garcia-Gomez & Eddy van Doorslaer (Erasmus University Rotterdam); Titus J. Galama (USC Center for Economic and Social Research) & Ángel López Nicolás (Universitat Pompeu Fabra) We present a theory of the relation between health and retirement that generates testable predictions regarding the interaction of health, wealth and financial incentives in retirement decisions. The theory predicts (i) that wealthier individuals (compared to poorer individuals) are more likely to retire for health reasons (affordability proposition), and (ii) that health problems...

May 22, 2017
Aging, Articles, Labor Market, Pension design, ,
Read more...
22May

Dangerous Flexibility – Retirement Reforms Reconsidered

By Axel H. Börsch-Supan, Tabea Bucher-Koenen, Vesile Kutlu-Koc & Nicolas Goll (Max Planck Society for the Advancement of the Sciences) Flexible retirement is supposed to increase labor supply of older workers without touching the third rail of pension politics, the highly unpopular increase of the retirement age. While this may have intuitive appeal, this paper shows that it might be wishful thinking. Economic theory tells us that flexible retirement policies can have a zero or positive effect on labor force...

May 22, 2017
Aging, Articles, Labor Market, Pension design, , ,
Read more...
14May

The Importance of Social Security Benefits to the Income of the Aged Population

By Irena Dushi & Howard Iams (US Social Security Administration); Brad Trenkamp (Government of the United States of America) Social Security benefits comprise the most important source of income for people aged 65 and over. However, changes in the last decades in employer-provided pensions, Social Security program, and societal changes may have altered the composition of income sources among the elderly. Some researchers have argued that the Current Population Survey (CPS ASEC) doesn’t properly measure income from retirement accounts and...

May 14, 2017
Aging, Articles, Labor Market, ,
Read more...
08May

The Impact of Social Pensions on Intergenerational Relationships: Comparative Evidence from China

By Xi Chen (Yale), Karen Eggleston (Stanford University) & Ang Sun Renmin University of China) China launched a new rural pension scheme (hereafter NRPS) for rural residents in 2009, now covering almost all counties with over 400 million people enrolled. This implementation of the largest social pension program in the world offers a unique setting for studying the economics of intergenerational relationships during development, given the rapidity of China's population aging, traditions of filial piety and co-residence, decreasing number of children,...

May 8, 2017
Aging, Articles, Labor Market, Pension design, ,
Read more...
01May

Population Aging, Social Security and Fiscal Limits

By Burkhard Heer (University of Augsburg), Vito Polito (University of Bath) & Michael R. Wickens (University of Cardiff) We study the sustainability of pension systems using a life-cycle model with distortionary taxation that sets an upper limit to the real value of tax revenues. This limit implies an endogenous threshold dependency ratio, i.e. a point in the cross-section distribution of the population beyond which tax revenues can no longer sustain the planned level of transfers to retirees. We quantify the...

May 1, 2017
Aging, Articles, System Sustainability,
Read more...

April 2017
14Apr

How Can China Provide Income Security for its Rapidly Aging Population?

By Barry James, Estelle Kane & Che Friedman The authors discuss key choices policy makers face about China's pension system in the face of a rapidly aging population. They describe the problems the current pay-as-you-go system faces in the near and long term and simulate policy options for solving those problems. They find that simple design changes are necessary but not sufficient conditions for making the pension system sustainable. Partial funding is necessary to avoid large increases in future contribution...

April 14, 2017
Aging, Articles, Pension design, Regulation, , ,
Read more...
10Apr

We are Not All the Same: Key Law, Policy and Practice Strategies for Improving the Lives of Older Women in the Lower Mainland

By Canadian Centre for Elder Law (British Columbia Law Institute) In 2011 the Canadian Centre for Elder law (CCEL) started the Older Women’s Dialogue Project (OWDP) to identify and take action on barriers to the well-being of older women. While gender has a significant impact on life experience, research and policy analysis often renders older women invisible: feminist inquiry tends to focus on girls and women of child-bearing age and gender-neutral aging policy concentrates on the experiences of men. The...

April 10, 2017
Aging, Articles, Labor Market
Read more...