July 2017

02Jul

Income and Subjective Well-Being: Evidence from Singapore's First National Non-Contributory Pension

By Yanying Chen & Yi Jin Tan (Singapore Management University) Using a new monthly longitudinal survey of elderly Singaporeans, we precisely time and study the announcement and disbursement effects of an exogeneous permanent income shock on a broad range of subjective well-being domains. The source of this permanent income shock is a new means-tested non-contributory pension, the Silver Support Scheme (SSS). Using a difference-in-differences strategy, we find that pension recipients experienced improved life satisfaction upon announcement of the SSS; this...

July 2, 2017
Articles, Investing, Labor Market, Savings,
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02Jul

Income and Subjective Well-Being: Evidence from Singapore’s First National Non-Contributory Pension

By Yanying Chen & Yi Jin Tan (Singapore Management University) Using a new monthly longitudinal survey of elderly Singaporeans, we precisely time and study the announcement and disbursement effects of an exogeneous permanent income shock on a broad range of subjective well-being domains. The source of this permanent income shock is a new means-tested non-contributory pension, the Silver Support Scheme (SSS). Using a difference-in-differences strategy, we find that pension recipients experienced improved life satisfaction upon announcement of the SSS; this...

July 2, 2017
Articles, Investing, Labor Market, Savings,
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June 2017

25Jun

The Causal Effect of Retirement on Health Services Utilization: Evidence from Urban Vietnam

By Thang Dang (University of Economics Ho Chi Minh City) Access to medical services is significantly essential for retaining and improving health status for aging population. Whilst retired individuals tend to have more time for the use of health services, there is only inadequate evidence evaluating the causal effect of retirement on health services utilization. To fulfill this gap in the literature especially from developing countries, this paper estimates the causal effect of retirement on the probability and the frequency...

June 25, 2017
Aging, Articles, Labor Market
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25Jun

Long-Term Effects of Extended Unemployment Benefits for Older Workers

By Tomi Kyyrä & Hanna Pesola (VATT Institute for Economic Research) This paper examines the long-term effects of extended unemployment benefits that older unemployed can collect until retirement in Finland. We consider a reform that increased the age threshold of this scheme from 55 to 57 for people born in 1950 or later. Our regression discontinuity estimates show that postponing eligibility by two years increased employment over the remaining working career by seven months. Despite the corresponding reduction in unemployment,...

June 25, 2017
Articles, Labor Market, Pension design
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18Jun

What Rates of Productivity Growth Would Be Required to Offset the Effects of Population Aging? A Study of Twenty Industrialised Countries

By Frank T. Denton & Byron G. Spencer (McMaster University) A shift in population distribution toward older ages is underway in industrialised countries throughout the world and will continue well into the future. We provide a framework for isolating the pure effects of population aging on per capita GDP, employ the framework in calculations for twenty OECD countries, and derive the rates of productivity growth required to offset those effects. We consider also some labour-related changes that might provide offsets,...

June 18, 2017
Aging, Articles, Labor Market, Regulation, ,
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11Jun

Pensions: What Solidarity between Generations?

By Gérard-François Dumont (University of Paris 4 Sorbonne) To understand the fact that solidarity between generations is essential for pensions, Gérard-François Dumont presents a parable inspired by the story of Robinson Crusoe. It shows that it is always the case that assets reduce their purchasing power to release payments to pensioners, whether they are in a distribution or capitalization system. According to the author, "capitalization is a system of financial distribution; Distribution is a system of human capitalization". (more…)

June 11, 2017
Articles, Labor Market, System Sustainability,
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11Jun

We’ll Live to 100 – How Can We Afford It?

The challenges we face to provide our ageing societies with a financially secure retirement are well-known. In most countries around the world, standards of living and healthcare advancements are allowing people to live longer. This should be celebrated, but we should also consider the implications for the financial systems that have been designed to meet our retirement needs, which in many countries are already under severe strain. This report has been produced as part of the Forum’s Retirement Investment Systems...

June 11, 2017
Aging, Articles, Labor Market, Pension design, , ,
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04Jun

Modeling Multi-State Health Transitions in China: A Generalized Linear Model with Time Trends

By Katja Hanewald, Han Li & Adam Wenqiang Shao (University of New South Wales) Rapid population aging in China has urged the need to understand health transitions of older Chinese to assist the development of social security programs and financial products aimed at funding long-term care. In this paper, we develop a new flexible approach to modeling health transitions in a multi-state Markov model that allows for age effects, time trends and age-time interactions. The model is implemented in the...

June 4, 2017
Aging, Articles, Labor Market
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04Jun

Long-Run Biological Interest Rate for Pay-as-You-Go Pensions in Advanced and Developing Countries

By Masahiro Nozaki (International Monetary Fund) How much of an internal rate of return would a sustainable pay-as-you-go pension system offer current and future generations equally? The answer is the sum of the Long-Run Biological Interest Rates (LBIR), the real-world equivalent of Samuelson's (1958) biological interest rate, and future productivity growth. Reflecting global population ageing, the median LBIR across 172 countries is as low as 1 percent per year. The LBIRs are particularly low in advanced countries, estimated to be...

June 4, 2017
Aging, Articles, Labor Market, Pension design, ,
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May 2017

22May

Interactions between Financial Incentives and Health in the Early Retirement Decision

By Pilar Garcia-Gomez & Eddy van Doorslaer (Erasmus University Rotterdam); Titus J. Galama (USC Center for Economic and Social Research) & Ángel López Nicolás (Universitat Pompeu Fabra) We present a theory of the relation between health and retirement that generates testable predictions regarding the interaction of health, wealth and financial incentives in retirement decisions. The theory predicts (i) that wealthier individuals (compared to poorer individuals) are more likely to retire for health reasons (affordability proposition), and (ii) that health problems...

May 22, 2017
Aging, Articles, Labor Market, Pension design, ,
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