February 2017

04Feb

Reforming retirement age in DB and DC pension systems in an aging OLG economy with heterogenous agents

By Joanna Tyrowicz, Krzysztof Makarski and Marcin Bielecki We analyze the effects of increasing the retirement age in two economies with overlapping generations and within cohort ex ante heterogeneity. The first economy has a defined benefit system, and the second economy is in transition from a defined benefit to a defined contribution. We find that if increase in the retirement age is phased in a way that allows agents to adjust, welfare is not reduced and welfare effects have a...

February 4, 2017
Aging, Articles, Pension design,
Read more...
04Feb

Redesigning pension systems: the institutional structure of pension systems should follow population developments

By Marek Gora For decades, pension systems were based on the rising revenue generated by an expanding population (demographic dividend). As changes in fertility and longevity created new population structures, however, the dividend disappeared, but pension systems failed to adapt. They are kept solvent by increasing redistributions from the shrinking working-age population to retirees. A simple and transparent structure and individualization of pension system participation are the key preconditions for an intergenerationally just old-age security system. Full Content: EconBiz

February 4, 2017
Articles, Books, Labor Market, Pension design, Regulation
Read more...
04Feb

Do Non-Monetary Prices Target the Poor? Evidence from a Field Experiment in India

By Bridget Hoffmann This paper uses willingness to pay (WTP) data from a field experiment in Hyderabad, India in 2013 to determine whether non-monetary prices better target health products to the poor than monetary prices. Monetary WTP is increasing in income and non-monetary WTP is weakly decreasing in income. Household fixed effects in a pooled sample of monetary WTP and non-monetary WTP are used to compare the correlation of income and WTP across price types. It is found that non-monetary...

February 4, 2017
Articles, Labor Market, Pension design
Read more...
04Feb

Balance Sheet Effects in Colombian Non-Financial Firms

By Sergio Restrepo, Adolfo Barajas, César Pabón & Roberto Steiner After building up foreign currency-denominated (FC) liabilities over several years, the balance sheets of Colombian firms might be particularly vulnerable to a shift in external conditions. This paper undertakes four exercises in order to get a better understanding of these vulnerabilities. First, probit/logit estimations are used to identify the firm-level and macroeconomic determinants of FC borrowing by non-financial corporations. Second, the implications of the balance sheet vulnerability for real activity...

February 4, 2017
Articles, Investing, Regulation,
Read more...
04Feb

What Capabilities Do the New Innovation and Structural Change Policies in Uruguay Require?

By Carlos Bianchi, Guillermo Fuentes, Lucía Pittaluga This paper analyzes three organizations that implement productive development policies in Uruguay: (i) the Dirección Nacional de Recursos Naturales Renovables (National Directorate of Renewable Natural Resources); (ii) sectoral councils; and (iii) the Agencia Nacional de Investigación e Innovación (National Agency of Research and Innovation). Selected cases show that during the past decade, there was a major effort to boost productive development policies in Uruguay and build capabilities for that purpose. The paper also...

February 4, 2017
Articles, Regulation, System Sustainability,
Read more...
04Feb

The Political Economy of Pension Reform: Public Opinion in Latin America and the Caribbean

By Fabiana Machado Countries around the world are facing important challenges to the sustainability of their pension systems. Changing policies, especially those of large scope and financial magnitude, is a political challenge. It takes a combination of willingness, capacity and enough political support to change the status quo and avoid costly subsequent reversals. Taking advantage of several waves of public opinion data in Latin America and the Caribbean, this paper aims to identify and analyze individual-level factors that are relevant...

February 4, 2017
Articles, Regulation,
Read more...
04Feb

Promised and Affordable Replacement Rates in LAC Pension Systems in 2015 and 2100: Methodology and Determinants

By Solange Berstein, Mariano Bosch & María Oliveri This note, originally prepared as an appendix for the 2016 Development in the Americas Report, Saving for Development, surveys the methodology and assumptions used in the discussion of replacement rates for pension systems in Latin America and the Caribbean. (more…)

February 4, 2017
Adequacy, Articles, Pension design,
Read more...
04Feb

The Effect of Non-contributory Pensions on Saving in Mexico

By IADB This paper examines the effects of non-contributory pension programs at the federal and state levels on Mexican households’ saving patterns using micro data from the Mexican Income and Expenditure Survey. The federal program by itself appears to reduce the saving rate of households whose oldest member is either 18 to 54 or 65 to 69. State programs by themselves have no significant effects on household saving rates in the smallest localities, but in larger localities they may reduce...

February 4, 2017
Adequacy, Articles, Pension design, , ,
Read more...
04Feb

Non-Contributory Pensions and Savings: Evidence from Argentina

By Martín González-Rozada & Hernán Ruffo This paper examines the effects of Argentina’s Plan de Inclusión Previsional (PIP), which changed the pension system in a way that generated a new noncontributory pillar, produced a huge expansion in pension coverage between 2005 and 2008 and a transfer of a vast amount of resources to households. Using a difference in differences methodology it is found that the PIP policy has reduced the incentives to work and to be in the labor force...

February 4, 2017
Adequacy, Articles, Pension design, , ,
Read more...