nep-age New Economics Papers
on Economics of Ageing
Issue of 2011‒08‒22
four papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. What happens to the husband’s retirement decision when the wife’s retirement incentives change? By Selin, Håkan
  2. Mobility: Rights, Obligations and Equity in an Ageing Society By Ann Frye
  3. "Social Security: Universal vs. Earnings-Dependent Benefits" By Jorge Soares
  4. Would People Behave Differently If They Better Understood Social Security? Evidence From a Field Experiment By Jeffrey B. Liebman; Erzo F.P. Luttmer

  1. By: Selin, Håkan (Uppsala Center for Fiscal Studies)
    Abstract: Several studies have documented a strong correlation in the timing of spouses’ retirement decisions. However, considerably less is known about the causal impact of one spouse’s retirement incentives on the retirement decision of the other spouse. Before, but not after, 2001 broad categories of Swedish local government workers in female dominated occupations were entitled to retire with full pension benefits already at the age of 63. In this paper, we utilize this reform – together with a micro data set covering the total Swedish population – to estimate the effect of a change in the wife’s incentive on the husband’s retirement behavior. We document a sharp decrease in pension benefit withdrawals among 63 year old wives in the local government sector in the years following the reform. However, we do not find any evidence of a response among husbands. This finding is at odds with some earlier results in the literature.
    Keywords: Joint retirement; retirement age; occupational pensions
    JEL: H55 J13 J21
    Date: 2011–07–11
  2. By: Ann Frye
    Abstract: Demographic trends worldwide indicate significant increases in the number of older people in the population in the coming years. There is a close link between age and disability, and the longer people live the more likely they are to become disabled to some degree. Disability takes many forms: physical, sensory and cognitive and all potentially affect people’s ability to go out and about independently.
    Date: 2011–04
  3. By: Jorge Soares (Department of Economics,University of Delaware)
    Abstract: I compare the welfare implications of implementing Bismarckian and Beveridgean social security systems. In an overlapping generations environment with intragenerational homogeneity, agents can be better off with a system with universal benefits than with a comparable system with earnings-dependent benefits because the latter generates a stronger decrease in net wages. Once I allow for intragenerational skill heterogeneity, agents are on average better off with the more redistributive universal benefits system. I then let agents vote for the replacement rates in a democratic process. In the absence of intragenerational heterogeneity, a larger social security system is implemented when benefits are earnings-dependent than when they are universal resulting in a larger decrease in net wages; this makes young agents worse o¤ with earnings-dependent benefits. In the presence of intragenerational skill heterogeneity, the reverse occurs and agents fare on average better in the long-run when benefits are earnings-dependent. However, because of its redistributional effects, agents born at the time of implementation are on average better o¤ with an universal benefits system.
    Keywords: social security, universal benefits, earnings-dependent benefits, Bismarckian social security system, Beveridgean social security system, voting, welfare.
    JEL: E62 H55
    Date: 2011
  4. By: Jeffrey B. Liebman; Erzo F.P. Luttmer
    Abstract: This paper presents the results of a field experiment in which a sample of older workers was randomized between a treatment group that was given information about key Social Security provisions and a control group that was not. The experiment was designed to examine whether it is possible to affect individual behavior using a relatively inexpensive informational intervention about the provisions of a public program and to explore the mechanisms underlying the behavior change. We find that our relatively mild intervention (sending an informational brochure and an invitation to a web-tutorial) increased labor force participation one year later by 4 percentage points relative to the control group mean of 74 percent and that this effect is driven by a 7.2 percentage point increase among female subjects. The information intervention increased the perceived returns to working longer, especially among female respondents, which suggests that the behavioral response can be attributed at least in part to updated information about Social Security.
    JEL: C93 D83 H55 J26
    Date: 2011–08

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