March 2019

19Mar

Early Access to Pension Savings : International Experience and Lessons Learnt

By Fiona Stewart, Himanshi Jain & Will Sandbrook The objectives of a well-designed pension system are poverty reduction in old age and income smoothing throughout an individuals' lifetime. Over the last thirty years, changing demographic trends have caused a shift from 'pay as you go' and occupational defined benefit (DB) schemes - where the obligation for paying for retirement income is with the state and employers - to defined contribution (DC) schemes, where the obligation to save for retirement rests...

March 19, 2019
Articles, Pension design, Savings, Slider-Left, ,
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17Mar

The Feasibility of Reverse Mortgages in Japan

By Richard K. Green (University of Southern California - Lusk Center for Real Estate) & Linna Zhu (USC Sol Price School of Public Policy) This paper examines the feasibility of reverse mortgages in Japan by utilizing stochastic modeling to characterize the movements of three stochastic variables—interest rates, property values and mortality—underpinning the value of reverse mortgages. We use the yield curve to forecast future interest rates, taking into account the interest arbitrage condition and the term premium. We employ hedonic...

March 17, 2019
Articles, Pension design, Savings, , ,
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17Mar

Defined Contribution Pension Plans: Who Has Seen the Risk?

By Peter Forsyth (University of Waterloo - David R. Cheriton School of Computer Science) & Kenneth R. Vetzal (University of Waterloo) The trend towards eliminating defined benefit (DB) pension plans in favor of defined contribution (DC) plans implies that increasing numbers of pension plan participants will bear the risk that final realized portfolio values may be insufficient to fund desired retirement cash flows. We compare the outcomes of various asset allocation strategies for a typical DC plan investor. The strategies...

March 17, 2019
Articles, Pension design, , ,
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17Mar

Population Aging, Health Care, and Fiscal Policy Reform: The Challenges for Japan

By Minchung Hsu (National Graduate Institute for Policy Studies (GRIPS)) & Tomoaki Yamada (Meiji University - School of Commerce) We construct a transition analysis based on a general equilibrium life‐cycle model to investigate the effects of aging, and we evaluate various policy alternatives designed to lessen the negative influence of aging. In particular, we analyze reforms of insurance benefits and tax financing tools that were recently the focus of a great amount of attention and debate in Japan because of...

March 17, 2019
Aging, Articles, Slider-Left, , ,
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10Mar

Retirement Challenge – A Perspective for Emerging Markets

By Nadeem Jeddy (Independent) The West offers valuable lessons in managing retirement challenge but their experience needs to be contextualized for a vastly different sociopolitical environment of the emerging markets. This has important implications for aggregating retirement pools to build scale, investment model of firms, boundary for public sector role and solutions for income security. The article describes the differences in sociopolitical context, reviews some important Western lessons and then proceeds to outline the key features of a sustainable retirement...

March 10, 2019
Articles, Investing,
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10Mar

Working while Studying: Employment Premium or Penalty for Youth in Benin?

By Senakpon F. A. Dedehouanou (KU Leuven), Luca Tiberti (Université Laval), Hilaire Houeninvo (University of Abomey-Calavi), Djohodo Inès Monwanou (National University of Agriculture (Benin)) Most youth in developing countries leave school with only a general academic education level, slowing down their transition to the labor market. We analyze whether work experience during school can help youth transition more easily to a first job in Benin. We used data from the 2014 School-to-Work Transition Survey (SWTS) and a multi-equation model to...

March 10, 2019
Articles, Labor Market, , ,
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10Mar

Reforming Social Security: The Challenge of Income Inequality

By David W. Rasmussen (Pepper Institute on Aging and Public Policy) Objective: This article examines the role Social Security plays in alleviating poverty among retirees in the context of threats to its solvency.  Method: Examining long-term employment trends, declining access to defined benefit pensions and saving behavior can determine if in the more future Social Security beneficiaries are likely to be poor.  Results: Labor market trends driven by technical change, global competition and increasing demand for services indicate that more future retirees...

March 10, 2019
Articles, Labor Market, Regulation, , ,
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07Mar

Reversing Pension Privatization

From 1981 to 2014, thirty countries fully or partially privatized their social security public mandatory pensions (figure 1). Fourteen countries were in Latin America: Chile (first to privatize in 1981), Peru (1993), Argentina and Colombia (1994), Uruguay (1996), the Plurinational State of Bolivia, Mexico and the Bolivarian Republic of Venezuela (1997), El Salvador (1998), Nicaragua (2000), Costa Rica and Ecuador (2001), Dominican Republic (2003) and Panama (2008). Another fourteen countries in Eastern Europe and the former Soviet Union embarked...

March 7, 2019
Articles, Regulation, , , ,
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03Mar

The Costs and Benefits of Caring: Aggregate Burdens of an Aging Population

By Finn Kydland (Carnegie Mellon University - David A. Tepper School of Business; Norwegian School of Economics (NHH) - Department of Economics), Nick Pretnar (Carnegie Mellon University) Throughout the 21st century, population aging in the United States will lead to increases in the number of elderly people requiring some form of living assistance which, as some argue, is to be seen as a burden on society, straining old-age insurance systems and requiring younger agents to devote an increasing fraction of...

March 3, 2019
Aging, Articles, ,
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03Mar

The Effect of Noncontributory Pensions on Saving in Mexico

By Catalina Amuedo-Dorantes (San Diego State University - Department of Economics; IZA Institute of Labor Economics), Laura Juarez (Bank of Mexico), Jorge Alonso Ortiz (Instituto Tecnológico Autónomo de México (ITAM) - Centro de Investigacion Económica) This paper examines the effects of noncontributory pension programs at the federal and state levels on Mexican households' saving patterns using micro data from the Mexican Income and Expenditure Survey. We find that the federal program curtails saving among households whose oldest member is either...

March 3, 2019
Articles, Pension design, ,
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