February 2017

04Feb

Do Financial Advisers Influence Savings Behavior?

By Jeremy Burke & Angela A. Hung There is substantial evidence that Americans tend to have low financial literacy (Lusardi and Mitchell, 2013) and are struggling with building sufficient wealth for a secure retirement (Helman et al., 2014). Financial advisers can play an important role by helping individuals make better financial decisions and improving their financial situations. However, there is limited and mixed evidence about the benefits to using a financial adviser. For example, as summarized in Burke et al....

February 4, 2017
Books, Investing, Labor Market, Savings,
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04Feb

What You Don’t Know Can’t Help You: Pension Knowledge and Retirement Decision-Making

By Sewin Chan & Ann Huff Stevens This paper provides an answer to an important empirical puzzle in the retirement literature: while most people know little about their own pension plans, retirement behavior is strongly affected by pension incentives. We combine administrative and self-reported pension data to measure the retirement response to actual and perceived financial incentives and document an important role for self-reported pension data in determining retirement behavior. Well-informed individuals are far more responsive to pension incentives than...

February 4, 2017
Articles, Investing, Labor Market, Savings, , ,
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04Feb

What You Don't Know Can't Help You: Pension Knowledge and Retirement Decision-Making

By Sewin Chan & Ann Huff Stevens This paper provides an answer to an important empirical puzzle in the retirement literature: while most people know little about their own pension plans, retirement behavior is strongly affected by pension incentives. We combine administrative and self-reported pension data to measure the retirement response to actual and perceived financial incentives and document an important role for self-reported pension data in determining retirement behavior. Well-informed individuals are far more responsive to pension incentives than...

February 4, 2017
Articles, Investing, Labor Market, Savings, , ,
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04Feb

An Evaluation of the Life Cycle Effects of Minimum Pensions on Retirement Behavior

By Sergi Jiménez-Martín & Alfonso R. Sánchez Martín In this paper we explore the effects of the minimum pension program on welfare and retirement in Spain. This is done with a stylized life cycle model which provides a convenient analytical characterization of optimal behavior. We use data from the Spanish Social Security to estimate the behavioral parameters of the model and then simulate the changes induced by the minimum pension in aggregate retirement patterns. The impact is substantial: there is...

February 4, 2017
Articles, Labor Market,
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04Feb

Behavioural Science in Law & Policy: Evidence, Ethics, & Expertise

By Newcastle University Behavioural economics, and behavioural science more generally, has become an increasingly salient aspect of modern policy debates. Despite the current enthusiasm amongst governments and policy-makers for behavioural approaches, there are potential problems with the use of the behavioural sciences to formulate public policy, many of which remain underexplored. This workshop brought together papers from a range of different disciplinary, regulatory, and practical perspectives to examine the potential benefits and pitfalls of behavioural science as applied to policy. The workshop...

February 4, 2017
Articles, Regulation,
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04Feb

Assessing the Distortions of Mandatory Pensions on Labor Supply Decisions and Human Capital Accumulation: How to Bridge the Gap between Economic Theory and Policy Analysis

By Mukul Rutkowski, David A. Robalino & Andras Bodor Mandatory pension systems play a major role in individual savings and labor supply decisions. In particular, it is well known that defined benefit pension schemes, which are not actuarially fair, can create incentives for early retirement and therefore reduce labor supply and the stock of human capital in a given country. This is an important policy issue in middle-income countries, with still low participation rates in the labor force, where the...

February 4, 2017
Adequacy, Articles, Labor Market, ,
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04Feb

Consumer Confusion: The Choice of Afore in Mexico

By Roberto Calderón-Colín, Enrique E. Dominguez & Moises J. Schwartz This paper was prepared for the World Bank 4th Annual Contractual Savings Conference (Washington DC, April 2008) co-organized by Gregorio Impavido. The article shows that account transfers among pension administrators in Mexico barely respond to price or return considerations and in general has not improved the consumer's pension balance. Instead of strengthening competition through lower fees and higher returns for the consumer, AFORE switching has so far undermined the system...

February 4, 2017
Articles, Labor Market, Regulation, Supervision, , ,
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04Feb

How Behavioral Economics Trims Its Sails and Why

By Ryan Bubb & Richard Pildes The preference of behavioral law and economics (BLE) for regulatory approaches that preserve “freedom of choice” has led to incomplete policy analysis and inefficient policies. BLE has been broadly regarded as among the most promising new developments in public policymaking theory and practice. As social science, BLE offers hope that better understanding of human behavior will provide a sounder foundation for policy design. As politics, BLE offers a possible political consensus built around minimalist...

February 4, 2017
Articles, Regulation
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04Feb

Behavioral Portfolio Management

By Thomas Howard Behavioral Portfolio Management (BPM) is presented as a superior way to make investment decisions. Underlying BPM is the dynamic market interplay between Emotional Crowds and Behavioral Data Investors. BPM’s first Basic Principle is that Emotional Crowds dominate the determination of both prices and volatility, with fundamentals playing a small role. The second Basic Principle is that Behavioral Data Investors earn superior returns. I present the evidence supporting these first two Principles. The third Basic Principle is that...

February 4, 2017
Articles, Corporate Governance, Investing
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04Feb

Nudging: A Very Short Guide

By Cass R. Sunstein This brief essay offers a general introduction to the idea of nudging, along with a list of ten of the most important “nudges.” It also provides a short discussion of the question whether to create some kind of separate “behavioral insights unit,” capable of conducting its own research, or instead to rely on existing institutions. Full Content: SSRN

February 4, 2017
Articles, Regulation,
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