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on Economics of Ageing |
| By: | Salamanca N.; Sleijpen O.C.H.M.; Grip A. de (GSBE) |
| Abstract: | We develop a measure of hybrid defined benefit DB pension risk and show how this pension risk affects individual portfolio decisions. We find that people in riskier DB plans are, on average, not only less likely to hold equity but also hold a smaller share of their wealth in equity. This relation is stronger for people who are better informed about their pension plan risk, and for retirees. We also check whether pension risk is related to retirement decisions but find no evidence to support this hypothesis. Our main results are robust to a number of model specifications and alternative explanations. Our findings suggest that properly funded DB pension plans can increase participants welfare by allowing them to seek higher returns in their individual portfolios while at the same time relieving less sophisticated participants from the decisions required by a defined contribution plan. |
| Keywords: | Personal Finance; Portfolio Choice; Investment Decisions; |
| JEL: | D14 G11 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013046&r=age |
| By: | Inderbitzin, Lukas; Staubli, Stefan; Zweimüller, Josef |
| Abstract: | This paper explores how extended unemployment insurance (UI) benefits targeted to older workers affect early retirement and social welfare. We argue that the analysis of UI's tradeoff between consumption smoothing and moral hazard needs to consider the entire early retirement system, which often consists of extended UI and relaxed access to disability insurance (DI). We argue that extended UI generates program complementarity (higher future take-up of DI and/or regular retirement benefits) or program substitution (lower contemporaneous take-up of DI benefits). Exploiting Austria's regional extended benefit program, which extended regular UI benefits to up to 4 years, we find: (i) program complementarity is quantitatively important for workers aged 50+; and (ii) program substitution is quantitatively relevant for workers aged 55+. We derive an optimal UI formula in the spirit of Baily (1978) and Chetty (2006) that features program complementarity and program substitution. Using the sufficient statistics approach, we conclude that UI for older workers was too generous and the regional extended benefit program was a suboptimal policy. |
| Keywords: | Early retirement, unemployment, disability, policy reform, optimal benefits |
| JEL: | J14 J26 J65 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2013:23&r=age |
| By: | Sarah Gibney (University College Dublin); Mark E. McGovern (Harvard Center for Population and Development Studies); Erika Sabbath (Harvard Center for Population and Development Studies) |
| Abstract: | Social relationships predict health and emotional wellbeing across the life course. However, it is not known whether gradients in social engagement, social network size or quality in later life mirror socio-economic and health gradients in childhood. This study investigates the long-term impact of childhood circumstances on social relationships. Data are from the Survey of Health, Aging and Retirement in Europe; a panel survey of people aged 50+. Current social network attributes (size, satisfaction and emotional closeness) and retrospective life history data on childhood health, cognition, SES, and parental characteristics are utilized. Regression analysis indicates that childhood circumstances predict social network attributes in later life. Emotional closeness partly mediates the relationship between childhood circumstances and social network satisfaction. A strong but differential association between aspects of childhood circumstance and social network attributes was evident. Therefore we critique the index measurement approach which conflates diverse pathways linking childhood and late-life outcomes. |
| Keywords: | Social relationships, Ageing, Europe, Childhood conditions, Life course |
| JEL: | J14 I10 Z13 |
| Date: | 2013–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201319&r=age |
| By: | Feld, Lars P.; Kallweit, Manuel; Kohlmeier, Anabell |
| Abstract: | -- There is an intensive debate about old-age poverty in Germany that has induced political parties to develop proposals for higher pensions of poor pensioners in light of the federal elections of September 2013. In addition, several proposals from economists aim at reforming the pension system in a way that mitigates old-age poverty. In this paper, we consider these proposals in a computable general equilibrium model in order to derive their effects on the income distribution, on employment, on the capital stock and on GDP. Our results indicate that negative employment, capital and GDP effects are induced by such reforms as compared to the alternative of basic means-tested social welfare in old-age. Moreover, the strongest beneficiaries would be the currently higher age employees with low in-come and much less the respective younger employees, while younger and higher age employees with high and medium incomes will lose. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:svrwwp:032013&r=age |
| By: | Maria D. Fitzpatrick |
| Abstract: | Despite the widespread provision of retiree health insurance for public sector workers, little attention has been paid to its effects on employee retirement. This is in contrast to the large literature on health-insurance-induced “job-lock” in the private sector. I use the introduction of retiree health insurance for public school employees in combination with administrative data on their retirement to identify the effects of retiree health insurance. As expected, the availability of retiree health insurance for older workers allows employees to retire earlier. These behavioral changes have budgetary implications, likely making the programs self-financing rather than costly to taxpayers. |
| JEL: | H75 I21 I22 J26 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19524&r=age |
| By: | Bonikowska, Aneta Schellenberg, Grant |
| Abstract: | With the leading edge of the baby boom generation now in their mid-sixties, there is considerable interest in how and when these individuals will retire. To help place this issue in a broader context, this paper provides information on the employment histories of individuals who were aged 33 to 38 in 1983 and aged 60 to 65 in 2010. The longest observed duration of employment is used as an organizing framework, with summary measures presented on indicators such as years of employment, job turnover, annual and cumulative earnings, permanent and temporary layoffs, and years of pensionable service. Cohort members are loosely categorized as `marginally attached workers', `mobile workers', or `long-term-job holders' according to their employment characteristics, with about one-tenth, one-quarter, and two-thirds of cohort members in these groups, respectively. |
| Keywords: | Labour, Seniors, Wages, salaries and other earnings, Work transitions and life stages, Labour mobility, turnover and work absences, Income, pensions and wealth, Work and retirement |
| Date: | 2013–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2013352e&r=age |
| By: | Robert Clark; Olivia S. Mitchell |
| Abstract: | Economic theory predicts that employer-provided retiree health insurance benefits crowd-out household wealth accumulation. Nevertheless, there is little research on the impacts of retiree health insurance on wealth accruals, so this paper utilizes a unique data file on three baseline cohorts from the Health and Retirement Study to explore how employer-provided retiree health insurance may influence net household wealth among public sector employees, where retiree healthcare benefits are still quite prevalent. We find that most full-time public sector employees who anticipate receiving employer-provided health insurance coverage in retirement save less than their private sector uncovered counterparts. |
| JEL: | H75 I11 I18 I30 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19511&r=age |