nep-age New Economics Papers
on Economics of Ageing
Issue of 2011‒03‒26
five papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Does pension debt mean anything after all? By Beltrametti, Luca; Della Valle, Matteo
  2. Expected Bequests and Current Wealth of Older Households By Dimitrios Christelis; Guglielmo Weber
  3. Retirement Flexibility and Portfolio Choice in General Equilibrium By Yvonne Adema; Jan Bonenkamp; Lex Meijdam
  4. Financial performance of the Czech private pension scheme: Its current position and the comparison with other CEE countries By Jan Hlaváč
  5. Social customs and demographic change: The case of godparenthood in Catholic Europe By Guido Alfani; Vincent Gourdon; Agnese Vitali

  1. By: Beltrametti, Luca; Della Valle, Matteo
    Abstract: We discuss the meaning of the concept of implicit pension debt (unfunded pen-sion liabilities) from a public finance perspective and contrast different definitions such a variable with the notion of public debt. We conclude that the implicit pen-sion is deeply different from public debt but nevertheless is meaningful for eco-nomic policy. We compute the implicit pension debt associated to retired workers for several countries for different years adopting a homogeneous algorithm. Our results show that the major countries have implicit pension debt of very different size with different trends in the last few years.
    Keywords: Pension liabilities; implicit debt; sovereign debt.
    JEL: H55 H63
    Date: 2011–03–18
  2. By: Dimitrios Christelis (SHARE, CSEF and CSF); Guglielmo Weber (University of Padua, CEPR and IFS)
    Abstract: We use the subjective probabilities of bequests to be given in the future and current asset holdings, as reported in three household surveys (HRS, ELSA, and SHARE) covering thirteen countries, in order to assess whether, and to what extent, households plan to decumulate assets in old age. We model intended bequests as a function of household demographic and economic characteristics, and estimate their expected value using quasi-maximum likelihood methods. By comparing the current wealth holdings with the expected intended bequests we compute the pattern of future saving by households, and assess its cross-country variability with respect to housing wealth.
    Date: 2011–03–16
  3. By: Yvonne Adema (Erasmus University Rotterdam, and Netspar); Jan Bonenkamp (CPB Netherlands Bureau for Economic Policy Analysis, and Netspar); Lex Meijdam (University of Tilburg, and Netspar)
    Abstract: This paper explores the interaction between retirement flexibility and portfolio choice in an overlapping-generations model of a closed economy. Retirement flexibility is often seen as a hedge against capital market risks which justifies more risky asset portfolios. We show, however, that this positive relationship between risk taking and retirement flexibility is weakened - and under some conditions even turned around - if not only capital market risks but also productivity risks are considered. Productivity risk in combination with a high elasticity of substitution between consumption and leisure creates a positive correlation between asset returns and labour income, reducing the willingness of consumers to bear risk. Moreover, it turns out that general equilibrium effects can either increase or decrease the equity exposure, depending on the degree of substitutability between consumption and leisure.
    Keywords: portfolio choice; retirement (in)flexibility; productivity and depreciation risk; intratemporal substitution; general equilibrium
    JEL: E21 G11 J26
    Date: 2011–02–17
  4. By: Jan Hlaváč (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: This paper focuses on the comparison of financial performance of the Czech voluntary private pension scheme with five other reformed private pension schemes in the region of Central Eastern Europe (Bulgaria, Croatia, Hungary, Poland and Slovak Republic). The current state and the recent development of the Czech private pension scheme are analyzed in the first part of the paper. In the main part of this work we construct the dataset of periodic scheme returns covering the last decade, and estimate the schemes Sharpe ratios (SR) for four reference benchmarks. The findings suggest that except for Poland none of the schemes managed to beat its long-term domestic benchmark (10-year government bonds) as the SRs estimates turn out to be negative. The highest underperformance was found in the case of the Czech Republic. Such poor results were assigned to the presence of restrictive annual minimum return guarantees and ineffective legislation arranging the PF costs allocation.
    Keywords: Private pension schemes, Czech voluntary pension scheme, financial performance, Sharpe ratio
    JEL: G23 G28 O57 H55
    Date: 2011–03
  5. By: Guido Alfani; Vincent Gourdon; Agnese Vitali
    Abstract: This article analyzes social norms regulating selection of godparents in Italy and France and how they will be affected by demographic change. On the grounds of Vatican statistics and of the World Values Survey, it demonstrates that baptisms still occur for the vast majority of children in Catholic Europe and that birth rituals are considered important even by non-believers. Relying on historical data, it shows that the custom of selecting godparents from among kinsmen, currently dominant, is a recent development. A new survey about selection of godparents in Italy and France is used which shows that they are not chosen for religious, but for social-relational reasons. Selection of kinsmen is the norm, with uncles and aunts being the majority choice. For Italy, choice determinants are explored by means of multinomial regressions. The results are contrasted with demographic change to show that in lowest-low fertility countries current godparenthood models are bound to disappear.
    Keywords: Godparenthood; godparents; spiritual kinship; demographic change; social change; social customs; social norms; baptism; lowest-low fertility
    Date: 2011–02

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