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on Economics of Ageing |
| By: | Pallares-Miralles, Montserrat; Romero, Carolina; Whitehouse, Edward |
| Abstract: | This paper presents and explains cross country data for mandatory publicly and privately managed pension systems around the world. This report is organized into three parts corresponding to three broad types of indicators. These indicators relate to: (i) the relevant contextual factors referred to here asenvironment; (ii) pension system design parameters; and (iii) indicators of performance. Part one of the report provides some information on the environment in which the system operates, focusing on demographic and labor market conditions. Understanding the current and future path of demographic patterns, especially aging, will place the later section on performance into a clearer perspective. Part two on pension system design uses a standardized taxonomy to describe differences across countries. The data on system design are presented in two groups of indicators: (i) overall architecture of the system: pillars, schemes including civil servants and other special schemes, and (ii) operating parameters of the system, which includes two sub-groups: a) qualifying conditions: pension eligibility ages, and contribution history, and b) contribution rates, defined benefit (DB), and defined contribution (DC) schemes, and indexation. It should be noted that while many countries have more than one program providing retirement income benefits, unless otherwise indicated, most of the data refer only to the national scheme. Part three presents a set of performance indicators. The indicators included are core pension indicators that illustrate six key criteria of any pension scheme, namely: (i) coverage, (ii) adequacy, (iii) financial sustainability, (iv) economic efficiency (i.e., minimizing the distortions of the retirement?income system on individuals'behavior, such as labor supply and savings outside of pension plans), (v) administrative efficiency, and (vi)) security of benefits in the face of different risks and uncertainties. |
| Keywords: | Pensions&Retirement Systems,Population Policies,Emerging Markets,Labor Markets,Debt Markets |
| Date: | 2012–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:hdnspu:70319&r=age |
| By: | Javier Alonso; Miguel Angel Caballero; Li Hui; Maria Claudia Llanes; David Tuesta; Yuwei Hu; Yun Cao |
| Abstract: | Despite the fact that China is already one of the most important economies in the world, the country has many big tasks to solve, being one of them the implementation of a comprehensive social agenda, including those related with the old-age stage and the consequently diminishing financial resources upon retirement from active work.. Taking into account the accelerated changes in fertility and longevity trends, it is widely forecasted that the absence of a well developed safety net for the old age stage could undermine economic and social sustainability of the Chinese society. In this sense, the main objective of this paper is to develop a preliminary discussion about prospects of pension system in China, taking into account the ineludible role of government in this social issue and the active potential participation of the private sector. Considering that, this piece of research provides a historical background of Chinese pension; discusses the existing pension schemes in China in order to understand the different areas of future developments; analyzes the potential market for contributory schemes; and strives to develop a model to forecast likely outcomes of the social insurance system by 2020. |
| Keywords: | Pension Funds, Other Private Financial Institutions, Social Security, Public Pensions |
| JEL: | H55 G23 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:1205&r=age |
| By: | Yoshihiko Kadoya |
| Abstract: | In order to respond to the social security needs of an increasingly aged population, many governments with limited budgets are required to focus available resources on the direct causes of peoplefs anxieties about aging. This study investigated the causes of peoplefs anxieties about life after the age of 65 using household data from countries with different social contexts: Japan, the United States, and China. This research uncovered three major findings. First, the speed of population aging does not always make people anxious about life at an older age. Second, high financial status effectively lessens peoplefs levels of anxiety about their older years in Japan and the United States. Third, living with a child does not necessarily lessen peoplefs concern about life after 65. |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0847&r=age |
| By: | Alicia H. Munnell; Anthony Webb; Luke Delorme; Francesca Golub-Sass |
| Abstract: | The National Retirement Risk Index (NRRI) measures the share of American households “at risk” of being unable to maintain their pre-retirement standard of living in retirement. The NRRI is determined by comparing households’ projected replacement rates – retirement income as a percentage of pre-retirement income – with target rates that would allow them to maintain their living standards. A recent update shows that, in the wake of the financial crisis and the Great Recession, 51 percent of today’s working households are at risk.1 But a key assumption of the NRRI is that people retire at age 65. Clearly if people worked longer, the percentage at risk would decline. This brief adapts the NRRI calculations to address the question: At what age would the vast majority of households be ready to retire? The discussion proceeds as follows. The first section lays out the nuts and bolts of the NRRI and explains how it has been adapted for this analysis. Projected replacement rates are calculated not only for the generally assumed retirement age of 65, but also for every potential retirement age between 50 and 90. These replacement rates are then compared to a target rate to determine the percentage of house-holds “ready” for retirement at each age. The second section presents the results, showing the cumulative percentage of households ready for retirement at dif-ferent ages, with breakdowns by income and current age.2 The third section addresses how much longer households have to work beyond age 65 to be pre-pared for retirement. The final section concludes that over 85 percent of households would be prepared to retire by age 70. Thus, many individuals will need to work longer than their parents did, but they will still be able to enjoy a reasonable period of retirement, es-pecially as health and longevity continue to improve. |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2012-12&r=age |
| By: | Guillem López-Casasnovas; Catia Nicodemo |
| Abstract: | In this paper we study the disability transition probabilities (as well as the mortality probabilities) due to concurrent factors to age such as income, gender and education. Although it is well known that aging and socioeconomic status influence the probability of causing functional disorders, surprisingly little attention has been paid to the combined effect of those factors along the individuals' life and how this affects the transition from one degree of disability to another. The assumption that tomorrow's disability state is only a function of the today's state is very strong, since disability is a complex variable that depends on several other elements than time. This paper contributes into the field in two ways: (1) by attending the distinction between the initial disability level and the process that leads to his course (2) by addressing whether and how education, age and income differentially affect the disability transitions. Using a Markov chain discrete model and a survival analysis, we estimate the probability by year and individual characteristics that changes the state of disability and the duration that it takes its progression in each case. We find that people with an initial state of disability have a higher propensity to change and take less time to transit from different stages. Men do that more frequently than women. Education and income have negative effects on transition. Moreover, we consider the disability benefits associated to those changes along different stages of disability and therefore we o er some clues on the potential savings of preventive actions that may delay or avoid those transitions. On pure cost considerations, preventive programs for improvement show higher benefits than those for preventing deterioration, and in general terms, those focusing individuals below 65 should go first. Finally the trend of disability in Spain seems not to change among years and regional differences are not found. |
| Keywords: | Markov transition, disability states, cost of disability, Spain, survival analysis |
| JEL: | J11 I18 H55 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:643&r=age |
| By: | David Autor; Mark Duggan; Jonathan Gruber |
| Abstract: | We provide a detailed analysis of the incidence, duration and determinants of claims made on private Long Term Disability (LTD) policies using a database of approximately 10,000 policies and 1 million workers from a major LTD insurer. We document that LTD claims rates are much lower than claims rates on the public analogue to LTD, the Social Security Disability Insurance program, yet LTD policies have a much higher return-to-work rate among initial claimants. Nevertheless, our analysis indicates that the impact of moral hazard on LTD claims is substantial. Using within firm, over time variation in plan parameters, we find that a higher replacement rate and a shorter waiting time to benefits receipt—also known as the Elimination Period or EP—significantly increase the likelihood that workers claim LTD. About sixty percent of the effect of a longer EP is due to censoring of shorter claims, while the remainder is due to deterrence: workers facing a longer EP are less likely to claim benefits for impairments that would lead to a only a brief period of LTD receipt. This deterrence effect is equally large among high and low-income workers, suggesting that moral hazard rather than liquidity underlies the behavioral response. Consistent with this interpretation, the response of LTD claims to plan parameters is driven primarily by the behavior of the healthiest disabled, those who would return to work after receiving LTD. |
| JEL: | H55 J32 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18172&r=age |
| By: | Furtado, Delia (University of Connecticut); Theodoropoulos, Nikolaos (University of Cyprus) |
| Abstract: | This paper examines the role of ethnic networks in disability program take-up among working-age immigrants in the United States. We find that even when controlling for country of origin and area of residence fixed effects, immigrants residing amidst a large number of co-ethnics are more likely to receive disability payments when their ethnic groups have higher take-up rates. Although this pattern can be partially explained by cross-group differences in satisfying the work history or income and asset requirements of the disability programs, we also find that social norms and, to a lesser extent, information sharing play important roles. |
| Keywords: | social security disability insurance, supplementary security income, networks, immigrants |
| JEL: | C31 H55 I18 J61 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6649&r=age |
| By: | Christian Becker; Dieter Ewringmann; Malte Faber; Thomas Petersen; Angelika Zahrnt |
| Abstract: | The paper critically examines the status of the sustainability discourse and sustainability politics against the backdrop of considerations about the meaning of justice in the context of sustainability. We argue that the preservation of the natural basis of life is by itself a requirement of justice. However, the crucial role of the ecological dimension of sustainability has been neglected due to a problematic interpretation of the economic dimension, a limited understanding of justice, and an overemphasis of economic growth and growth politics. We propose to reposition the sustainability discourse and sustainability politics by prioritizing the long-term protection of the natural basis of life as the essential foundation of future development, welfare, and justice. |
| Keywords: | Sustainability; justice; ethics; growth; welfare; ecological economy |
| JEL: | A13 A10 Q57 Q5 Q01 O40 I31 |
| Date: | 2012–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0527&r=age |
| By: | Allison B. Rosen; Eli Liebman; Ana Aizcorbe; David M. Cutler (Bureau of Economic Analysis) |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:bea:wpaper:0085&r=age |