January 2019

27Jan

China’s High Savings: Drivers, Prospects, and Policies

By Longmei Zhang (International Monetary Fund), Ray Brooks (International Monetary Fund   - Asia and Pacific Department), Ding Ding (International Monetary Fund), Haiyan Ding (International Monetary Fund), Hui He (International Monetary Fund), Jing Lu (International Monetary Fund), Rui Mano (International Monetary Fund) China's high national savings rate-one of the highest in the world-is at the heart of its external/internal imbalances. High savings finance elevated investment when held domestically, or lead to large external imbalances when they flow abroad. Today, high savings mostly emanate from...

January 27, 2019
Aging, Articles, Labor Market, Savings, ,
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19Jan

Migration, Remittances and Brexit: European Labor Market Integration and Its Effects on Inequality and Convergence

By Pawel Langer (New York University) & Laszlo Tetenyi (New York University) The increase in migration from Eastern to Western Europe after their accession to the European Union (EU) in 2004 resulted in a large increase in remittances to New Member States (NMS) and were comparable in size to FDI or EU funds. This paper adds to the literature by analyzing the impact of remittances and migration jointly, rather than separately, on the integration of EU economies and their implications...

January 19, 2019
Articles, Labor Market, Savings, , , ,
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19Jan

Retirement Savings Adequacy in U.S. Defined Contribution Plans

By Francisco Gomes (London Business School), Kenton Hoyem (Financial Engines, Inc.), Wei-Yin Hu (Financial Engines, Inc.), Enrichetta Ravina (Kellogg School of Management) We evaluate retirement savings adequacy in the U.S. using a large panel dataset comprising the contribution rates, salary, tenure, account value, plan features and asset allocations of more than 300 thousand US workers with a 401(k) account. Our simulations account for medical expenditure, longevity, and investment risks, and realistically model the likelihood of withdrawals due to hardship, job...

January 19, 2019
Adequacy, Articles, Pension design, Savings, Slider-Left, ,
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December 2018

16Dec

Informing Retirement Savings Decisions: A Field Experiment on Supplemental Plans

By Robert L. Clark (North Carolina State University - Poole College of Management), Robert G. Hammond (North Carolina State University), Melinda Sandler Morrill (North Carolina State University - Department of Economics), Christelle Khalaf (North Carolina State University) Although supplemental saving plans can be an important part of an individual's financial security in retirement, contribution rates remain low, particularly among those with lower salaries and less education. We report findings from an intervention that provided information on key aspects of the...

December 16, 2018
Articles, News, Pension design, Savings, Slider, Slider-Left, , , ,
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16Dec

Annuity Pricing In Public Pension Plans: Importance Of Interest Rates

By Nino Abashidze, Robert L. Clark, Beth Ritter, David Vanderweide There is little systematic information on the distribution options in public sector retirement plans and how annuity options are priced relative to the standard single life annuity. This study examines the distribution options of 85 large public retirement plans covering general state employees, teachers, and local government employees. An important component of the analysis is the construction of a data set presenting the annuity options offered by each of these plans and how the...

December 16, 2018
Articles, Investing, Pension design, Savings, ,
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11Dec

Collecting and Transferring Pension Contributions

Collecting social security contributions is an important operational issue in all types of pension system. Many regimes are plagued by poor compliance and weak, inefficient administration. Some countries have tried to introduce an automatic incentive to contribute by moving systems closer to ‘actuarial fairness’, where pension benefits are more strictly related to individual contributions. Examples include the systems of individual accounts introduced in a range of countries in Latin America and Eastern Europe. But in these regimes, collecting and...

December 11, 2018
Articles, Regulation, Savings, Supervision, , ,
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03Dec

Downhill from Here: Retirement Insecurity in the Age of Inequality

By Katherine S Newman As millions of Baby Boomers reach their golden years, the state of retirement in America is little short of a disaster. Nearly half the households with people aged 55 and older have no retirement savings at all. The real estate crash wiped out much of the home equity that millions were counting on to support their retirement. And the typical Social Security check covers less than 40% of pre-retirement wages--a number projected to drop to under...

December 3, 2018
Books, Pension design, Savings, ,
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November 2018

02Nov

Retirement Savings of the Hip Generation: A Study of Retirement Preparation among Individuals in Their Fifties

By M. Kabir Hassan (University of New Orleans - College of Business Administration - Department of Economics and Finance), Shari Lawrence (University of New Orleans - College of Business Administration - Department of Economics and Finance) Longer retirement periods coupled with the inadequacy of the Social Security system, low personal savings rates, and a decreasing trend in the prevalence of defined benefit retirement plans threaten to put a financial strain on individuals approaching retirement. To that end, we investigate retirement...

November 2, 2018
Articles, Savings, ,
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October 2018

29Oct

How Persistent Low Returns Will Shape Saving and Retirement

By Olivia S Mitchell,‎ Robert Clark,‎ Raimond Maurer Financial market developments over the past decade have undermined what was once thought to be conventional wisdom about saving, investment, and retirement spending. How Persistent Low Returns Will Shape Saving and Retirement explores how the weak capital market performance predicted for the next several years will shape pension saving, investment, and decumulation plans. Academics, policymakers, and industry leaders debate alternative strategies to cope with these challenges globally, as economic growth remains slow...

October 29, 2018
Books, Investing, Savings, , , ,
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29Oct

The Causal Mechanism of Financial Education: Evidence from Mediation Analysis

By Fenella Carpena (Oslo Business School) & Bilal Zia (World Bank - Development Research Group (DECRG)) This paper uses a field experiment in India with multiple financial education treatments to investigate the causal mechanisms between financial education and financial behavior. Focusing on the mediating role of financial literacy, the paper proposes a broader definition of financial knowledge that includes three dimensions: numeracy skills, financial awareness, and attitudes toward personal finance. The analysis then employs causal mediation analysis to investigate the proportion...

October 29, 2018
Articles, Savings
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