June 2017

25Jun

Long-Term Effects of Extended Unemployment Benefits for Older Workers

By Tomi Kyyrä & Hanna Pesola (VATT Institute for Economic Research) This paper examines the long-term effects of extended unemployment benefits that older unemployed can collect until retirement in Finland. We consider a reform that increased the age threshold of this scheme from 55 to 57 for people born in 1950 or later. Our regression discontinuity estimates show that postponing eligibility by two years increased employment over the remaining working career by seven months. Despite the corresponding reduction in unemployment,...

June 25, 2017
Articles, Labor Market, Pension design
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25Jun

Automatic Enrollment and Choices of Pension Plans: An Experimental Study in Brazil

By Antonio Gualberto Pereira (Universidade Federal da Bahia) & Luís Eduardo Afonso (University of Sao Paulo) One alternative presented in the literature to increase adhesion to pension plans is to modify the default of choices from opt in (to adhere to the plan) to opt out (leave the plan), a nudge typical of the libertarian paternalism (Kahneman, 2002). An experimental design was adopted, adapted from a tool by Hey (2007). The research was made available with the assistance of Questionpro©...

June 25, 2017
Adequacy, Articles, Pension design, Regulation
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18Jun

Chapter 19: Individual Biases in Retirement Planning and Wealth Management

By James E. Brewer & Charles H Self III Around the globe, the gradual move from defined benefit pensions to defined contribution pensions has increased the need for individual retirement planning. Examples of this include U.S. savings rates at historic lows, poor retirement prospects for citizens in developed countries, and the disparaging gap between investor returns and market returns. Research indicates that individuals working with a financial advisor generally receive better results than those who do not. Working with a...

June 18, 2017
Adequacy, Articles, Pension design, Savings, ,
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18Jun

In-Kind Infrastructure Investments by Public Pensions: The Queensland Motorways Case Study

By Michael Bennon, Ashby H. B. Monk & YJ Cho (Stanford University) OECD countries require billions in infrastructure investment for new projects and the rehabilitation of old assets. Public pensions are likewise underfunded and in need of stable, inflation-linked investment opportunities uncorrelated with the rest of their portfolio, making infrastructure a seemingly strong fit. This has led to calls to facilitate more direct investment by public pension funds in infrastructure. In truth there are many impediments to such programs. Under...

June 18, 2017
Articles, Corporate Governance, Investing, Savings,
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18Jun

What Rates of Productivity Growth Would Be Required to Offset the Effects of Population Aging? A Study of Twenty Industrialised Countries

By Frank T. Denton & Byron G. Spencer (McMaster University) A shift in population distribution toward older ages is underway in industrialised countries throughout the world and will continue well into the future. We provide a framework for isolating the pure effects of population aging on per capita GDP, employ the framework in calculations for twenty OECD countries, and derive the rates of productivity growth required to offset those effects. We consider also some labour-related changes that might provide offsets,...

June 18, 2017
Aging, Articles, Labor Market, Regulation, ,
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11Jun

Pensions: What Solidarity between Generations?

By Gérard-François Dumont (University of Paris 4 Sorbonne) To understand the fact that solidarity between generations is essential for pensions, Gérard-François Dumont presents a parable inspired by the story of Robinson Crusoe. It shows that it is always the case that assets reduce their purchasing power to release payments to pensioners, whether they are in a distribution or capitalization system. According to the author, "capitalization is a system of financial distribution; Distribution is a system of human capitalization". (more…)

June 11, 2017
Articles, Labor Market, System Sustainability,
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11Jun

Public Pension Reform and the Takings Clause

By Michael B. Kent Jr. (Campbell University) Of the many current issues facing state and local governments, perhaps one of the most pressing is public pension reform. According to the U.S. Census Bureau, there are nearly 4,000 public pension systems in the United States, the vast majority (3,742) of which are administered by local governments. As of 2014, these systems had more than 19,000,000 members and more than 9,000,000 beneficiaries receiving periodic payments. But many of these systems are in...

June 11, 2017
Articles, Pension design, Regulation, System Sustainability, ,
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11Jun

We’ll Live to 100 – How Can We Afford It?

The challenges we face to provide our ageing societies with a financially secure retirement are well-known. In most countries around the world, standards of living and healthcare advancements are allowing people to live longer. This should be celebrated, but we should also consider the implications for the financial systems that have been designed to meet our retirement needs, which in many countries are already under severe strain. This report has been produced as part of the Forum’s Retirement Investment Systems...

June 11, 2017
Aging, Articles, Labor Market, Pension design, , ,
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06Jun

Assessing the Demand for Micropensions Among India’s Poor

By Olivia S. Mitchell (University of Pennsylvania) & Anita Mukherjee (University of Wisconsin) Using new data from a field experiment in India, we test hypotheses about micropension design in a poor population. We elicit demand for the basic micropension in addition to variants with different minimum withdrawal ages, government match rates, and options for lump sum withdrawal. A majority (80%) of respondents report interest in the micropension, and the amount they are willing to contribute would be enough to cover...

June 6, 2017
Articles, Pension design, Savings, ,
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06Jun

Assessing the Demand for Micropensions Among India's Poor

By Olivia S. Mitchell (University of Pennsylvania) & Anita Mukherjee (University of Wisconsin) Using new data from a field experiment in India, we test hypotheses about micropension design in a poor population. We elicit demand for the basic micropension in addition to variants with different minimum withdrawal ages, government match rates, and options for lump sum withdrawal. A majority (80%) of respondents report interest in the micropension, and the amount they are willing to contribute would be enough to cover...

June 6, 2017
Articles, Pension design, Savings, ,
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