|
on Demographic Economics |
| By: | Ananth Seshadri; Anson Zhou |
| Abstract: | Nearly 40% of births in the United States are unintended, and this phenomenon is disproportionately common among Black Americans and women with lower education. Given that being born to unprepared parents significantly affects children’s outcomes, could family planning access affect intergenerational persistence of economic status? We extend the standard Becker–Tomes model by incorporating an endogenous family planning choice. When the model is calibrated to match observed patterns of unintended fertility, we find that intergenerational mobility is significantly lower than that in the standard model. In a policy counterfactual where states improve access to family planning services for the poor, intergenerational mobility improves by 0.3 standard deviations on average. When we calibrate the model to match unintended birth rates by race, we find that differences in family planning access alone can account for 20% of the racial gap in upward mobility. Helping women fulfill their goals about family planning and childbearing can improve social mobility and address racial inequality. |
| JEL: | E6 J11 J13 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29891&r= |
| By: | Joseph Kopecky; Alan M. Taylor |
| Abstract: | Population aging has been linked to a global savings glut and a decline in safe real interest rates. Conversely, risky real returns have not fallen as much, if at all, with equity risk premia on the rise. An existing literature can explain changes in safe rates using demographics. We go further to account for divergent returns on different assets as well as the underlying surge in the wealth-income ratio and its asset composition. Empirical evidence from historical panel data shows that demographic shifts are correlated with asset returns and risk premia. We build a heterogeneous agent life-cycle model with two assets (a safe bond and equity) and with aggregate risk. Aging demographics can help to simultaneously explain three key trends: the rising wealth-income ratio, the falling risk free rate, and an increasing risk premium. The shifts exert less pressure on risky returns as high-wealth elderly reallocate away from equities: aging makes retirement saving a “crowded trade” but more so for bonds. Projecting our model to 2050, aging pushes the safe rate below zero, but the risk premium remains elevated, as post-boomer demographics push asset returns to unprecedented and persistently low levels. |
| JEL: | E21 E43 G11 J11 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29944&r= |
| By: | Jeffrey R. Brown; James M. Poterba; David P. Richardson |
| Abstract: | This paper documents trends over the last two decades in retirement behavior and retirement income choices by participants in TIAA, a large and mature defined contribution plan with a wide range of withdrawal options. Between 2000 and 2018, the average retirement age rose by approximately 1.3 years for female and 2 years for male participants. There is considerable variation in the elapsed time between the last contribution to and the first income draw from participants’ plan accounts; only 40% take an initial income payment within 48 months of their last contribution, which is likely to coincide with retirement. Later retirement and lags between retirement and the first retirement income payout led to a growing fraction of participants reaching the Required Minimum Distribution (RMD) age before starting income draws. The fraction of first-time income recipients who took no income until their RMD rose from 10% (2000) to 52% (2018), while the fraction of these recipients who selected a life-contingent annuitized payout stream declined from 61 to 18%. Among those who began receiving income before age 70, annuitization rates were significantly higher than among those who did so at older ages. Aggregating across all income recipients at a point in time, not just the new recipients, the proportion who had a life annuity as part of their payout strategy fell from 52% in 2008 to 31% in 2018. At the same time, the proportion of all income recipients taking an RMD payment rose from 16 to 29%. About one-fifth of retirees received more than one type of income; the most common pairing was an RMD and a life annuity. The data suggest that the RMD is becoming the de facto default distribution option for newly-retired TIAA participants. |
| JEL: | H24 H55 J14 J32 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29946&r= |
| By: | Tim Krieger; Christine Meemann; Stefan Traub |
| Abstract: | In most OECD countries, pension reform policy has decreased the level of intragenerational redistribution over the last three decades, that is, redistribution among members of the same generation with high and low pension entitlements. This trend has occurred despite heterogeneity in life expectancy linked to socioeconomic status having a regressive impact on out-comes. This paper contributes to solving this puzzle by means of a controlled laboratory experiment. We study the causal relationship between inequality of entitlements, mortality risk, and the size of redistribution in a stylized social security system. We find that mortality risk, when negatively correlated with entitlements, significantly lowers subjects’ willingness to redistribute payoffs from high-entitlement to low-entitlement subjects. We explain this finding with efficiency preferences and an alienation effect. The alienation effect is the tendency to attach a lower social weight to the short-lived poor. |
| Keywords: | inequality, life expectancy, risk, redistribution, pension reform, efficiency preferences, alienation effect experiment |
| JEL: | D63 D81 H55 I14 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9677&r= |
| By: | Hani Mansour; Terra McKinnish |
| Abstract: | Previous work shows that higher male wage inequality decreases the share of ever married women in their 20s, consistent with the theoretical prediction that greater male wage dispersion increases the return to marital search. Consequently, male wage inequality should be associated with higher husband quality among those “early-mover” women who choose to forgo these higher returns to search. We confirm using U.S. decennial Census and American Community Survey (ACS) data from 1980-2018 that married women ages 22-30 in marriage markets with greater male wage inequality are more likely to marry up in education and in husband’s occupation. We additionally consider whether male wage inequality increases wage uncertainty, leading women to prefer older husbands who can send stronger signals of lifetime earnings. We confirm that higher male wage inequality is also associated with a larger marital age gap. |
| Keywords: | marriage, marital search, marital sorting, inequality, male wages |
| JEL: | J12 J24 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9619&r= |
| By: | Geir B. Asheim; Kohei Kamaga; Stéphane Zuber |
| Abstract: | We examine utilitarian criteria for evaluating profiles of wellbeing among infinitely many individuals. Motivated by the non-existence of a natural 1-to-1 correspondence between people when alternatives have different population structures, with a different number of people in each generation, we impose equal treatment in the form of Strong Anonymity. We show how a novel criterion, Strongly Anonymous Utilitarianism, can be characterized by combining Strong Anonymity with other regularity axioms (Monotonicity, Finite Completeness, and continuity axioms) as well as axioms of equity, sensitivity, separability, and population ethics. We relate it to other strongly anonymous utilitarian criteria and demonstrate its applicability by showing how it leads to an efficient and sustainable stream in the Ramsey model. |
| Keywords: | utilitarianism, intergenerational equity, population ethics |
| JEL: | D63 D71 Q01 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9576&r= |