October 2018

12Oct

Retirement Savings Inequality: Different Effects of Earnings Shocks, Portfolio Selections, and Employer Contributions by Worker Earnings Level

By Joelle Saad-Lessler (The New School for Social Research), Teresa Ghilarducci (Schwartz Center for Economic Policy Analysis (SCEPA); The New School for Social Research), Gayle Reznik (U.S. Social Security Administration) Changes in accumulated retirement savings, particularly in employer-sponsored defined contribution (DC) plan balances, differ by worker’s earnings levels. Earnings shocks, portfolio diversification, and employer contributions to worker’s DC plans affect retirement savings for lower earners more than for higher earners. The authors match Survey of Income and Program Participation data...

October 12, 2018
Articles, Labor Market, Savings, , , ,
Read more...
05Oct

Life Quality and Health Costs in Late Retirement

By Yuanshan Cheng (Winthrop University), Philip Gibson (Winthrop University), Tao Guo (William Paterson University) Individuals are living longer due to the advancement of medical technology and nutrition quality. Are the elderly enjoying retirement in those extended years with good quality of life, or, are they simply alive? Using data from the Health and Retirement Study (HRS) and the Consumption and Activities Mail Survey (CAMS), this study contributes to the literature by presenting empirical evidence on how individuals spend time in...

October 5, 2018
Articles, Pension design, Savings, Slider-Left,
Read more...

September 2018

21Sep

Financial Literacy: Liberalism, Decision-Making and Social Welfare

By Gordon L. Clark (Oxford University - Smith School of Enterprise and the Environment) Financial literacy is a program for enhancing individuals’ decision-making and an assumption made about the sovereignty of the individual. In its most optimistic form, financial literacy would empower individuals to achieve their financial goals and objectives. It would do so by providing individuals the concepts for effective decision-making in a world subject to financial risk and uncertainty. The logic underpinning this vision is explained arguing that...

September 21, 2018
Articles, Investing, Savings, ,
Read more...
21Sep

Endowment Effects and Usage of Financial Products: Field Evidence from Malawi

By Xavier Giné (World Bank - Development Research Group (DECRG)), Jessica Goldberg (University of Maryland, Department of Economics) When offered a choice between two savings accounts, prior account holders are significantly less likely to switch to a cheaper account, compared with new subjects without a prior account. While 49 percent of account holders retained their original, expensive accounts, none of the new subjects who opened an account chose the expensive one. This finding is consistent with the "endowment effect." Exploiting...

September 21, 2018
Articles, Savings, , ,
Read more...
21Sep

Predicting Retirement Savings Using Survey Measures of Exponential-Growth Bias and Present Bias

By Gopi Shah Goda (Stanford University), Matthew Levy (London School of Economics & Political Science (LSE) - Department of Economics), Colleen Flaherty Manchester (University of Minnesota), Aaron Sojourner (University of Minnesota; IZA Institute of Labor Economics), Joshua Tasoff (Claremont Colleges - Claremont Graduate University) In a nationally-representative sample, we predict retirement savings using survey-based elicitations of exponential-growth bias (EGB) and present bias (PB). We find that EGB, the tendency to neglect compounding, and PB, the tendency to value the present...

September 21, 2018
Articles, Savings, Slider-Left, ,
Read more...
17Sep

Medium-Run Implications of Changing Demographic Structures for the Macro-Economy

By Yunus Aksoy (Birkbeck, University of London),Henrique S. Basso (Birkbeck College, University of London) & Ron Smith (Birkbeck College) In the decade since the onset of the financial crisis, the disappointing recovery has sparked renewed concern about the medium-run outlook for advanced economies. Rather than returning to the pre-crisis trend, output has continued to diverge from it. It is difficult to know whether this is a cyclical phenomenon, a slow recovery towards steady state, or a secular change in the...

September 17, 2018
Aging, Articles, Labor Market, Savings, ,
Read more...
08Sep

Retirement Savings Policy: Past, Present, and Future

By Michael P. Barry "Mike brings to this work his comprehensive experience and consummate technical talent in a beautifully readable book. A treasure." --Frank Cummings, Former Adjunct Lecturer in Law at UVA Law School, Columbia Law School, NYU Law School, and ALI-ABA Retirement Savings Policy reviews the basic policies that govern retirement savings plans, and their real world application, focusing on the key issues of finance, taxation, fiduciary conduct, and employee choice. The discussion is framed around the three fundamental challenges confronting...

September 8, 2018
Books, Regulation, Savings,
Read more...
08Sep

2018 Retirement preparedness survey: A Generational Challenge

By Prudential The U.S. retirement landscape has changed dramatically over the past few decades. Fewer workers today are eligible to receive a pension and instead must save for their own retirements, typically through workplace savings plans. Replacement rates for Social Security are declining due to the increase in the “full retirement age.”1 Income is becoming less predictable, thanks in part to new employment models. Health care costs are increasing, and so is longevity—which means workers today don’t just have more...

September 8, 2018
Aging, Books, Labor Market, Savings, , ,
Read more...
03Sep

What Age Do You Feel? – Subjective Age and Economic Behaviors

By Zihan Ye (Zhejiang University - College of Economics) & Thomas Post (Maastricht University - School of Business and Economics - Department of Finance; Netspa) Building on recent findings in psychology, we study the impact of subjective age (feeling younger or older than one’s chronological age) on economic behaviors. Using data from the Health and Retirement Study we find that subjective age predicts economic behaviors: Individuals with younger age identities have higher work engagement, and their savings profile, as a...

September 3, 2018
Aging, Articles, Savings,
Read more...

August 2018

18Aug

The Relationship Between Financial Planner Use and Holding a Retirement Saving Goal: A Propensity Score Matching Analysis

By Kyoung Tae Kim (University of Alabama), Tae-Young Pak (University of Alabama), Su Hyun Shin (University of Alabama) & Sherman D. Hanna (Ohio State University (OSU)) It has been well established in the literature that financial advice leads to informed decision making and improved financial outcomes. However, there is limited evidence regarding the link between financial planner use and attitudes towards retirement saving. As financial planners provide comprehensive advice for the long-term benefits of clients, their clients may become more...

August 18, 2018
Aging, Articles, Labor Market, Pension design, Savings, ,
Read more...