May 2019

24May

Retirement and Social Security

By Giam Cipriani, Tamara Fioroni In this paper, we analyse the effects of demographic change on a PAYG pension system, financed with a defined contribution scheme. In particular we examine the relationship between retirement, fertility and pensions in a three-period overlapping generations model. We focus on both the case of mandatory retirement and the case where the retirement age is freely chosen. In the case of mandatory retirement, increasing longevity has an unambiguously negative impact on fertility and pension...

May 24, 2019
Aging, Articles, Pension design, Savings, , ,
Read more...
20May

Three Economic Myths about Ageing: Participation, Immigration and Infrastructure

By Dr Cameron K. Murray, Leith van Onselen Population ageing due to longevity is one of the greatest successes of the modern era. However, it is widely thought to dramatically reduce workforce participation and overall output resulting in significant economic costs. This widely held view is wrong. Ageing countries have higher economic growth and the improved health and longevity of older people increases their economic contributions. High immigration is also thought to combat population ageing and be a remedy...

May 20, 2019
Aging, Articles, Labor Market, , ,
Read more...
17May

Selfies for Portugal- An innovative Pan European Retirement Solution

By Robert C. Merton, Arun Muralidhar, Rui Seybert P Ferreira With a rapidly aging population, Portugal faces some serious pension challenges including a Social Security system which is under pressure, and pension benefits gradually approaching levels that will require individuals to supplement Social Security with private savings. In addition, Portugal has a low rate of financial literacy and hence transferring the responsibility of retirement planning to the general population runs a major risk of many individuals retiring poor. While some...

May 17, 2019
Articles, Pension design, Pension Management, , , , , ,
Read more...
17May

Mobile Coverage and its Impact on Digital Financial Services

By Leon Perlman, Michael Wechsler Digital Financial Services (DFS) is a relatively recent mobile-centric financial inclusion innovation in developing. Using ubiquitous mobile phones as the means of service access (primarily through 2G narrowband services, with broadband 3G and 4G potentially available). DFS provides the unbanked and underserved - many of whom live in rural areas - with access to basic financial services provided by banks and nonbanks such as mobile network operators and third party DFS providers (DFSPs)....

May 17, 2019
Articles, Pension design,
Read more...
17May

Informality, Labor Regulation, and the Business Cycle

By Gustavo Leyva, Carlos Urrutia We analyze the joint impact of employment protection and informality on macroeconomic volatility and the propagation of shocks in emerging economies. For this, we propose a small open economy business cycle model with frictional labor markets, labor regulation, and an informal sector, modeled as self-employment. The model is calibrated to the Mexican economy, in particular to business cycle moments for employment and informality obtained from our own calculations with the ENOE survey for the...

May 17, 2019
Articles, Labor Market, Slider-Left, , ,
Read more...
10May

How Financial Literacy Impacts Retirement Savings: The Role of Present Bias and Exponential Growth Bias

By Kanin Anantanasuwong Lack of saving for retirement is a major issue, especially in soon-to-be ageing societies. In this paper we examine the impact of financial literacy on retirement savings, as well as its effect on present bias and exponential growth bias, which have been identified as detrimental to savings in previous studies. We find that better financial literacy is related with a more accurate perception of exponential growth, which stimulates retirement savings. In addition, financially literate individuals are...

May 10, 2019
Articles, Savings, ,
Read more...
10May

Retirement Choices by State and Local Public Sector Employees: The Role of Eligibility and Financial Incentives

Por Leslie E. Papke I analyze the effects of state public pension parameters on the retirement of public employees. Using a panel data set of public sector workers from 12 waves of the Health and Retirement Study, I model the probability of retirement as a function of pension wealth at early and normal retirement eligibility and Social Security coverage in the public sector job. I find that becoming eligible for early retirement, or receiving an early-out offer, significantly increases the...

May 10, 2019
Articles, Pension design,
Read more...
10May

Financial Literacy and Saving for Retirement among Kenyan Households

By Teresa Schützeichel In this paper I examine financial literacy and saving for retirement in Kenya using the household survey of 2016 from FinAccess Kenya. I use probit regressions to determine the effect financial literacy has on individuals saving regularly as well as saving for retirement. My findings show that households with higher levels of financial literacy will tend to have a higher likelihood to save on a regular basis and subsequently save for retirement. I find that women, the...

May 10, 2019
Articles, Pension design, Savings, , ,
Read more...
04May

A Lifetime of Changes: State Pensions and Work Incentives at Older Ages in the UK, 1948-2018

By James Banks, Carl Emmerson We describe the history of state pension policy in the UK since 1948 and calculate summary measures of the generosity of the system over time and the degree to which the it created implicit taxes on, or subsidies to, work at older ages. The time series of these measures, calculated separately for ’example-type’ individuals of different birth cohorts, education and sexes, are then related to the time-series of employment rates at older ages for the equivalent...

May 4, 2019
Articles, Pension design, Regulation, ,
Read more...
04May

Institutional Design of Pension Systems and Individual Behavior: How do Households Respond?

By Renata Herrerias (Instituto Tecnológico Autónomo de México (ITAM) - Department of Business Administration), Guillermo Zamarripa (Instituto Tecnológico Autónomo de México (ITAM)). Mexico introduced a Defined Contribution (DC) Pension System in 1997. We analyzed the behavior of affiliated workers under the institutional design of the reformed system. Before the reform, 75% of affiliated workers could receive a lifetime annuity upon retirement; we project that under the new rules only 30% of participants will be able to transform savings into...

May 4, 2019
Articles, Pension design, , ,
Read more...