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on Economics of Ageing |
| By: | Grell, Britta |
| Abstract: | When policy discussions turn to income provisions for the old-aged, the focus is often on Social Security programs and the long-term solvency of national public pension systems. While Social Security remains the most important income source for the non-working elderly in the United States, Americans have a much longer tradition of relying on occupational and individual pensions as a crucial part of their retirement income. The paper gives an account of relevant social and legal provisions with implications for voluntary and involuntary retirement, and documents how statutory changes during the past three decades have affected the financial well-being of current and future retirees. It concludes that growing risks in old age are less due to declining Social Security benefits than to several trends in the private industry and financial markets that have seriously weakened employmentbased, old-age protection. In terms of institutional changes, however, the United States has not seen any fundamental restructuring of its public pension system since the 1980s. -- |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbisi:spi2011204&r=age |
| By: | Wörz, Markus |
| Abstract: | Pensions absorb the largest share of the welfare state in financial terms. This is true not only in the aggregate but also for individuals. Financial security in old age is of key importance. The provision of financial security, however, is contingent upon the institutional arrangement of social security systems. This paper describes key features of Statutory Pension Insurance (SPI), the most important provision for financial security in old age from which most senior citizens derive the largest part of their retirement income. It focuses next on core SPI features: How benefits are calculated; important changes since the 1980s; and, how these changes affect average pensions. With various routes into retirement - particularly in Germany - the following chapter then discusses these different paths and how they were reformed over time. Following that, occupational and private pensions are examined as alternative means to oldage financial security other than SPI. Here we do so with empirical data showing the evolution of different, old-age income sources since the 1990s. This institutional description shows that SPI became less generous between 1980 and 2007: First, the pension formula has been modified several times resulting in shrinking benefits. The introduction of actuarial reductions, in 1997, for early enrolment of benefits amplified this, since a considerable number of people retire before the statutory retirement age and, therefore, receive lower pensions. Moreover, in several steps, university education has been completely disregarded in the valuation of pensions. At the same time, credits were given for child-raising and child-care services. Whereas the former is already in force, the latter will only benefit future generations of pensioners. Thus, those most affected by welfare state changes in relation to old-age pensions are pensioners who retire early and have higher education. -- |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbisi:spi2011208&r=age |
| By: | Barrientos, Armando (Asian Development Bank Institute) |
| Abstract: | Rapid population ageing and economic transformation in Asia raise the policy challenge of ensuring income security in old age. The main objective of this paper is to explore the potential role of social pensions and other noncontributory schemes in Asia, informed by insights from theory and international experience. The paper identifies alternative forms of providing income security in old age, including social pensions. It also examines the welfare effects of adopting alternative social pension designs, especially around two key policy nodes: the comparative advantages of social assistance and social pensions, and the integration of noncontributory transfers within advanced contributory pension schemes. |
| Keywords: | social pensions; population ageing; asia; social assistance; noncontributory transfers; contributory pension schemes |
| JEL: | H55 I38 J14 J32 O17 |
| Date: | 2012–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0351&r=age |
| By: | Alicia H. Munnell; Steven A. Sass |
| Abstract: | The option to claim Social Security benefits earlier than the program’s Full Retirement Age, in exchange for receiving an actuarially reduced benefit, is a key feature of the nation’s Social Security program. This principle remained in place when Congress increased the Full Retirement Age from 65 to 67. Most workers choose to claim early and retire on the reduced benefits. The option to claim early was enacted over 50 years ago, when Congress set 62 as the program’s Earliest Age of Eligibility. To make up for the extra three years of benefit payments, those claiming at 62 received 20 percent less in monthly benefits than if they had claimed at 65. Despite a significant increase in life expectancy in the intervening years, benefits claimed at 62 today are still about 20 percent less than benefits claimed at 65. This brief asks whether this actuarial reduction is still correct... |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2012-6&r=age |
| By: | Hasan U. Altiok (Eastern Mediterranean University, Cyprus); Glenn Jenkins (Queen's University, Canada and Eastern Mediterranean University, Cyprus) |
| Abstract: | This paper contains a quantitative assessment of the social security pension reforms in Northern Cyprus (TRNC) that were introduced in 2008 and later refined in 2012. A set of estimations are carried out to determine if the reforms were adequate enough to make the system self-financing. The key question is whether now the contributions over a participants working life would be sufficient to finance the pension promises through retirement. It is found that although significant improvements were made, the new system is neither fiscally neutral nor socially equitable. It delivers a higher budgetary subsidy to high income participants relative to the subsidy received by those with lower incomes. Recommendations are made for the policy changes to correct these defects. |
| Keywords: | pay-as-you-go, social security, pension liabilities, replacement rate, Northern Cyprus |
| JEL: | H55 H68 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:qed:dpaper:215&r=age |
| By: | Weaver, Kent |
| Abstract: | Demographic and fiscal pressures have increased pressures on governments in most wealthy countries to reduce the generosity of their public pension programs. Mechanisms that automatically adjust public pension levels to take account of factors such as increased life expectancy and slower economic growth are appealing to politicians because it saves them from having to take loss-imposing actions that are likely to incur political blame. This paper analyzes the financial and political potential of automatic stabilizing mechanisms (ASMs), beginning with a discussion of design issues and alternatives. This is followed by a discussion of potential adoption, implementation, and sustainability challenges for automatic stabilizing mechanisms and a review of experiences with stabilization mechanisms in three countries: Canada, Sweden and Germany. The paper argues that ASMs are vulnerable to erosion over time, especially when the losses that the ASM would impose are substantial, and when elections are impending. Preserving the integrity of ASMs is most likely where the parties that initially supported their adoption continue to be able to sustain cartel-like behavior with respect to pension policymaking. Overall, the analysis in this paper suggests that automatic stabilizing mechanisms are no panacea for the problems of countries facing serious long-term pension financing problems. -- |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbisi:spi2011201&r=age |
| By: | Atanda, Akinwande A.; Aminu, Salaudeen B.; Alimi, Olorunfemi Y. |
| Abstract: | The precise relationship between population growth and per capita income has been inconclusive in the literature and the nexus has been found not clearly explain the determinants of rapid population growth in developing countries that lacks fertility control and management framework. This forms the rationale for this study to access the trend of factors that influence rapid population growth in developing countries between 1980 and 2010. This paper examined the comparative trend review of population growth determinants between developing countries (Bangladesh, Ethiopia, Indonesia, Mexico and Nigeria) and developed nations (Germany and United States). The trend analysis revealed that fertility rate, crude death rate, birth rate, mortality rate, and life expectancy are the major determinants of rapid population growth rate, while youth dependency ratio of young people below age 15 has also been attributed as one of the leading causes of population growth and growth threat in developing countries. However, the analysis further indicated that excluding Mexico from the Upper Middle Income group, developed economies (United State and Germany) with large population size have a higher real economic well-being as measured by the Real GNI per capita, compared with selected developing economies in the world. The study then proffered the need for population control framework and provision of essential infrastructures for the rapid growing population size in developing countries in order to enhance their welfare. |
| Keywords: | Population Growth; Income Growth; Health Status; Fertility; Mortality; Developing Countries; Developed Nations; Income Group |
| JEL: | O1 I0 C40 D60 O4 |
| Date: | 2012–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:37966&r=age |
| By: | Martin Weale; Silvia Lui; James Mitchell |
| Abstract: | Mortality rates computed from data reported in the British Household PanelSurvey are lower than those computed from registration of deaths; the main source of this error is likely to be a failure to distinguish non-response due to unreported death from other forms of non-response. Here we model the interaction between state of health, mortality and non-response of men aged 65 and over in a trivariate probit model so as to correct for non-response. We then explore whether the restrictions on the model coefficients required to produce the observed aggregate mortality rates can be accepted statistically. We find that the required restrictions are rejected suggesting that the standard treatment of non-response does not fully address the problem. A possible explanation is that the original sample is not fully representative of the population. |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:384&r=age |
| By: | Martin Weale; Silvia Lui |
| Abstract: | We explore the effects of income and, additionally education on the income, self-reported health and survival of people aged sixty-five and over in order to identify benefits resulting from education which are omitted in the conventional analysis with its focus on labour income excluding employer contributions. We find that well educated people enjoy substantially higher incomes and longer healthy lives. However our estimates of the magnitudes of these are sharply reduced if we imposed on our model, estimated from British Household Panel Survey Data, the restrictions that the mortality rates it generates should be consistent with aggregate official data. |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:383&r=age |
| By: | Artuc, Erhan |
| Abstract: | Do trade shocks affect workers differently because of their age? This paper examines the issue by estimating the lifetime mobility of workers based on the sectors in which they work. Using U.S. data, the paper shows that mobility costs rise with a worker's age and years of experience, but stay the same regardless of his or her education level. In addition, using a general-equilibrium simulation of counterfactual trade-liberalization policies in the metal manufacturing sector, the paper shows that trade shocks affect workers with higher mobility costs more, for both winners and losers of the policy shocks. But the effects taper off over a worker's lifetime, especially when they are close to retirement. |
| Keywords: | Economic Theory&Research,Labor Markets,Tertiary Education,Labor Policies,Trade Policy |
| Date: | 2012–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6035&r=age |