March 2024
08Mar

The gender pension gap: What does it tell us and what should be done about it?

By Miglena Abels, Loli Arribas-Banos & Gustavo Demarco Despite recent attention in the media, progress in closing the gender pension gap in most countries has halted. These sources point to a stark disparity in retirement outcomes, with women receiving pensions that are between 25% to 30% lower than those of men. Methodological differences to estimate the gap don’t make it less striking and are no excuse for inaction. Source World Bank

March 8, 2024
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01Mar

Fiscal Stimulus or Debt Relief: The Effect of Federal Pandemic Aid on State and Local Pensions

By Grace Brang, Sewin Chan & Travis St. Clair Between 2020-2021, the U.S. federal government passed four major pieces of legislation that included nearly $1 trillion in aid to state and local governments. One concern with distributing federal stimulus in the form of intergovernmental transfers is that subnational governments may use the aid to pay down unfunded pension liabilities or other debt rather than preserve employment. We examine the effect of fiscal stimulus passed in response to Covid-19 on public...

March 1, 2024
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01Mar

Lessons from the Pan-European Personal Pension product (PEPP)

By Hans van Meerten Europe has come up with legislation for a new individual pension product: the PEPP. This introduces an individual retirement account that can be rolled out in the entire European Union (EU). And can be offered to citizens worldwide. Europe – like most continents - is ageing at a rapid pace. In 2060, there will be two people at a working age for every pensioner, in comparison with four people at a working age at the present time....

March 1, 2024
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01Mar

Financial Fragility, Financial Resilience, and Pension Distributions

By Robert L. Clark & Olivia S. Mitchell We evaluate Americans’ financial robustness during the Covid-19 pandemic, using measures of financial resilience and financial fragility derived from US surveys of persons age 45-75 from 2020 to 2022. We analyze which factors were associated with resilience and fragility, discuss how these measures changed during the pandemic, and assess whether pre-pandemic resilience led to better outcomes during the period. Results show that stronger resilience was protective in terms of financial fragility, and financial literacy...

March 1, 2024
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February 2024
22Feb

The Government Pension Identity Crisis

By T. Leigh Anenson, J.D., LL.M., Ph.D. & Hannah R. Weiser, J.D., M.B.A. The Contract Clause once dominated the docket of the Supreme Court. But now the clause belongs to the museum of constitutional law. This artifact, however, is gaining new life in ongoing litigation over public pension reform that significantly impacts the financial benefits of government workers such as teachers, firefighters, and even judges. And, unlike private sector workers, for public servants there is no federal safety net in...

February 22, 2024
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22Feb

Can ChatGPT Plan Your Retirement?: Generative AI and Financial Advice

By Andrew W. Lo & Jillian Ross We identify some of the most pressing issues facing the adoption of large language models (LLMs) in practical settings, and propose a research agenda to reach the next technological inflection point in generative AI. We focus on four challenges facing most LLM applications: domain-specific expertise, an ability to tailor that expertise to a user’s unique situation, trustworthiness and adherence to the user’s moral and ethical standards, and conformity to regulatory guidelines and...

February 22, 2024
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21Feb

Social Spending in Mexico: Needs, Priorities and Reforms

By Swarnali A Hannan, Juan Pablo Cuesta Aguirre & David Bartolini Poverty in Mexico was high before the COVID-19 pandemic and has been exacerbated by the pandemic, with significant variation across states. Education losses from the pandemic are likely to be large and worsen pre-existing disparities; unless mitigated soon, they could contribute to heightened scarring over the medium term. Using state-level and cross-country comparisons, this paper reviews key social programs as well as priorities in education and health. It finds that...

February 21, 2024
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16Feb

Does Pension Automatic Enrollment Increase Debt? Evidence from a Large-Scale Natural Experiment

By John Beshears, Matthew Blakstad, James J. Choi, Christopher Firth, John Gathergood, David Laibson, Richard Notley, Jesal D. Sheth, Will Sandbrook & Neil Stewart Does automatic enrollment into retirement saving increase household debt? We study the randomized roll-out of automatic enrollment pensions to ~160,000 employers in the United Kingdom with 2-29 employees. We find that the additional savings generated through automatic enrollment are partially offset by increases in unsecured debt. Over the first 41 months after enrollment, each additional month...

February 16, 2024
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16Feb

Trends in State and Local Pension Funds

By Oliver Giesecke & Joshua Rauh Unfunded public pension obligations represent the largest liability for state and local governments in the United States. As of fiscal year 2021, the total reported unfunded liabilities of these plans are $1.076 trillion. In contrast, the market value of the unfunded liability is approximately $6.501 trillion. As a result, the reported funding ratio of 82.5% falls to 43.8% under a market-based valuation. The market values reflect the fact that accrued pension promises are a...

February 16, 2024
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16Feb

Gender Inequality Over the Life Cycle, Information Provision and Policy Preferences

By Alessandra Casarico, Jana Schuetz & Silke Uebelmesser We conduct a survey experiment with four thousand German respondents and provide information on two measures of gender inequality, separately or jointly: the gender gap in earnings and the gender gap in pensions. We analyze the effect of information provision on respondents’ views on the importance of reducing gender inequality and on their agreement with the adoption of policies targeted at different stages of the life cycle and aimed at reducing the...

February 16, 2024
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