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January 2022

21Jan

The Effects of Credible Voluntary Disclosures: Institutional Investor Engagement and Investees’ ESG Performances

By Massimiliano Bonacchi, April Klein, Sara Longo & Giovanni Strampelli We study the effectiveness of institutional investor engagement on the ESG performance of a sample of UK firms listed in the FTSE 350 Index. To measure the quality of engagement, we exploit the introduction of the tiering classification system by the Financial Reporting Council (FRC) in 2016 for signatories’ reporting under the UK Stewardship Code. Using an entropy matched difference-in-differences research design, we show that the introduction of the tiering...

January 21, 2022
Articles, Investment,
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14Jan

Development an optimization plan for redistributing pension assets applying information technologies

By Svitlana Achkasova & Yevheniia Malyshko The issue of the significance of the role of information technologies in the pension system was highlighted. The information and communication model of the state regulation of financial support of the pension system in the market of non-banking financial services was considered. The essence of information and communication support of the risk-oriented approach to the system of accumulative pension provision, which involves preventing the information and technological probability of risks, was explored. The issues...

January 14, 2022
Articles, Pension Management, ,
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14Jan

Lean Advice for New Investors

By Jarrod Wilcox, Zvi Bodie, & Dan di Bartolomeo As defined benefit pensions have been replaced by investor-directed defined contribution plans, implementing sound investment policies for retail investors of modest means has become a problem of increasing urgency. This group comprises most of the investor population across all countries. In the U.S. it is characterized by inadequate saving, failure to take advantage of materially higher payout for delayed Social Security benefits, extensive credit card debt, and pursuit of naïve investment...

January 14, 2022
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14Jan

Conflicts and Opportunities for Pension Fiduciaries in the ESG Environment

By Susan N. Gary Acting as prudent investors, pension managers should consider financially material factors that affect the risk/return profile of funds. Material environmental, social, and governance (ESG) factors may affect financial performance by identifying opportunities and risk, so it would seem prudent to consider those factors when making decisions in the best interests of plan beneficiaries. In June 2020 the Department of Labor (DOL) proposed a rule that appeared to be an attempt to curtail consideration of ESG factors....

January 14, 2022
Articles, Investment, Pension Management, ,
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06Jan

Racial Inequality in Unemployment Insurance Receipt and Take-Up

By Elira Kuka & Bryan A. Stuart This paper studies differences in receipt and take-up of unemployment insurance (UI) benefits among white and Black individuals. We combine state-level UI regulations with data containing detailed information on individuals’ work history and UI receipt. Black individuals who separate from a job are 24% less likely to receive UI than whites. The UI receipt gap stems primarily from lower take-up of UI benefits among likely eligible individuals, as opposed to differences in benefit...

January 6, 2022
Articles, Labor Market, , , ,
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06Jan

The Asymmetry in Responsible Investing Preferences

By Jacquelyn Humphrey, Shimon Kogan, Jacob Sagi & Laura Starks We design an experiment to understand how social preferences affect investment decisions through stock allocations and probability assessments. The major preference channel is asymmetric in social outcomes – although negative and positive responsible investment (RI) externalities have the same magnitudes, negative externalities have greater impact on investment choices. The effect is persistent, but heterogenous. We also find asymmetries in belief formation and learning constitute a secondary channel. Overall, our results...

January 6, 2022
Articles, Investment,
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06Jan

Did Pandemic Unemployment Benefits Reduce Employment? Evidence from Early State-Level Expirations in June 2021

By Harry J. Holzer, R. Glenn Hubbard & Michael R. Strain The generosity of Unemployment Insurance (UI) benefits was expanded during the pandemic (FPUC), along with the groups of workers eligible for benefits (PUA). These two programs were set to expire in September 2021, but 18 states opted out of both in June 2021. Using Current Population Survey data, we present difference-in-difference and event study estimates that the flow of unemployed workers into employment increased by around two-thirds following early...

January 6, 2022
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December 2021

29Dec

Choice Overload? Participation and Asset Allocation in French Employer-Sponsored Saving Plans

By Marie Briere, James M. Poterba & Ariane Szafarz This paper employs administrative data from one of the largest plan providers in France to investigate the role of plan and default characteristics in affecting whether employees participate in the plan and whether they accept its default investment option. The dataset includes information on the saving choices of 680,392 active employees at 1,610 firms. French employers have wide discretion in structuring employee saving plans. All plans must offer medium-term investments, which...

December 29, 2021
Articles, Pension design, , ,
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29Dec

What Drives Variation in Investor Portfolios? Evidence from Retirement Plans

By Mark Egan, Alexander MacKay & Hanbin Yang We study empirical patterns in investment behavior using a comprehensive data set of defined contribution plans. Using plan-level portfolio allocation data for the near universe of 401(k) plans over the period 2009-2019, we document substantial differences in investment behavior across plans. Plans with wealthier and more educated participants tend to have higher equity exposure while plans with more retirees and minorities tend to have lower equity exposure. These patterns cannot be explained...

December 29, 2021
Articles, Pension design, , ,
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29Dec

Green Finance: A Shift Towards Sustainable Economic Growth

By Bazgha Khan & Noria Farooqui Green finance refers to the financial arrangements that are specific to the utilization for projects that are environmentally sustainable or projects that adopt the aspects of global climate change. It’s to extend the level of financial flows from banking, micro-credit, insurance and investment, the public, private and not-for-profit sectors to sustainable development priorities. United Nations Environment Program (UNEP) has been working to align financial systems to the 2030 sustainable development agenda to direct financial flows...

December 29, 2021
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