June 2019

07Jun

Retire In-Home: A New Way to Use a Home to Guarantee Retirement Income

By Arun Muralidhar There is a growing retirement crisis and most of the focus has been on the fact that individuals are not saving enough for retirement, may not have access to pension schemes, and find it difficult to choose from a wide range of retirement products. One solution that has been considered is to improve access to Reverse Mortgages (RMs) so that individuals can convert their (possibly) single largest asset into a through-death income stream. However, current RMs are...

June 7, 2019
Articles, Pension design, , , ,
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07Jun

Switching Costs and Competition in Retirement Investment

By Fernando Luco How do different switching costs affect choices and competition in a private pension system? I answer this question in a setting in which variation in employment status allows me to identify two switching costs that jointly affect enrollees’ decisions: the cost of evaluating financial information and the cost of the bureaucratic process that enrollees must navigate when switching. I use this variation to estimate the different switching costs and study their impact on competition among pension...

June 7, 2019
Articles, Management, System Sustainability, ,
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May 2019

31May

50 States of Gray: An Innovative Solution to the Defined Contribution Retirement Crisis

By Arun Muralidhar Another retirement crisis is looming as one-third of private-sector, typically poor and unsophisticated workers, probably have little to no pension security. The fifty states have decided to enact reforms, but they are unwilling to assume any liability. Effective reform should ensure a target, guaranteed, inflation/standard-of-living-indexed retirement income through death. The book proposes a four-step reform process that articulates roles, responsibilities, and sequencing of steps to effectively address the looming retirement crisis. Current reform models potentially expose...

May 31, 2019
Books, Investing, Pension design, , ,
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04May

A Lifetime of Changes: State Pensions and Work Incentives at Older Ages in the UK, 1948-2018

By James Banks, Carl Emmerson We describe the history of state pension policy in the UK since 1948 and calculate summary measures of the generosity of the system over time and the degree to which the it created implicit taxes on, or subsidies to, work at older ages. The time series of these measures, calculated separately for ’example-type’ individuals of different birth cohorts, education and sexes, are then related to the time-series of employment rates at older ages for the equivalent...

May 4, 2019
Articles, Pension design, Regulation, ,
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March 2019

15Mar

Impact of the digitalisation of financial services on supervisory practices in the private pension sector case study: Mexico

By the National Commission of the Retirement Savings System (CONSAR) I. Context of the Retirement Savings System (SAR) 1. Mexico introduced a new mandatory DC system of individual accounts in 1997 for private-sector workers (IMSS) and in 2007 for public-sector workers (ISSSTE)1 , both of which replaced old DB systems that had been in place since the 1940s and 1950s. 2. The new system has been relatively successful in creating a big pool of pension savings, as well as...

March 15, 2019
Books, Regulation, Reports, Supervision, , , , ,
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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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February 2019

15Feb

Pension Policy and the Financial System

By DAVID S. SCHARFSTEIN This paper examines the effect of pension policy on the structure of financial systems around the world. In particular, I explore the hypothesis that policies that promote pension savings also promote the development of capital markets. I present a model that endogenizes the extent to which savings are intermediated through banks or capital markets, and derive implications for corporate finance, household finance, banking, and the size of the financial sector. I then present a...

February 15, 2019
Articles, Pension design, Slider-Left, System Sustainability, , ,
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02Feb

Using Behavioral Science to Increase Retirement Savings in Mexico A look at what we have learned over three years

By Andrew Fertig, Alissa Fishbane, Jaclyn Lefkowitz Acknowledgements We’ve been fortunate to work with many individuals who made this report possible. We are enormously grateful to MetLife Foundation for its support and partnership throughout our efforts, and especially to Evelyn Stark, Alison Jarrett, Gabriela Zapata, and Nalleli Garcia Gutierrez. We’d like to thank our team members Marcela Cheng Oviedo, David Munguía Gómez, and Juan David Robalino for their excellent research and design contributions as well as their dedication...

February 2, 2019
Books, Labor Market, Pension design, Savings, , ,
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January 2019

19Jan

Order Without Design: How Markets Shape Cities

By Alain Bertaud An argument that operational urban planning can be improved by the application of the tools of urban economics to the design of regulations and infrastructure. Urban planning is a craft learned through practice. Planners make rapid decisions that have an immediate impact on the ground--the width of streets, the minimum size of land parcels, the heights of buildings. The language they use to describe their objectives is qualitative--"sustainable," "livable," "resilient"--often with no link to measurable outcomes. Urban economics,...

January 19, 2019
Books, Labor Market,
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19Jan

The Effect of Self-Employment on Income Inequality

By Stefan Schneck (Institut für Mittelstandsforschung (IfM) Bonn) It is well known that the self-employed are over-represented at the bottom as well as the top of the income distribution. This paper shifts the focus from the income situation of the self-employed to the distributive effects of a change in self-employment rates. With representative German data and unconditional quantile regression analysis we show that an increase in the proportion of self-employed individuals in the labor force increases income polarization by tearing...

January 19, 2019
Articles, Labor Market, Pension design, ,
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