March 2017

17Mar

Widowhood and Retirement Timing: Evidence from the Health and Retirement Study

By Philipp Schreiber (University of Mannheim) The combination of an increasing life expectancy, low fertility rates, and an early effective retirement age creates pressure to act for Governments and organizations. The pay-as-you-go social security systems of many countries are troubled by the increasing ratio of retirees to working people. In addition, many organizations face difficulties caused by a shrinking workforce and the accompanied shortage of skilled workers. To counteract, it is essential to create an environment in which older workers...

March 17, 2017
Aging, Articles, Labor Market, System Sustainability, ,
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17Mar

Understanding the Determinants of Financial Outcomes and Choices: The Role of Noncognitive Abilities

By Gianpaolo Parise (Bank for International Settlements) & Kim Peijnenburg (Netspar) We explore how financial distress and choices are affected by non cognitive abilities. Our measures stem from research in psychology and economics. In a representative panel of households, we find people in the bottom decile of non cognitive abilities are five times more likely to experience financial distress compared to those in the top decile. (more…)

March 17, 2017
Articles, Investing, Labor Market, Savings, ,
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17Mar

Life-Cycle Consumption, Investment, and Voluntary Retirement with Cointegration between the Stock and Labor Markets

By Min Dai, Shan Huang & Seyoung Park (National University of Singapore) We present an optimal life-cycle consumption, investment, and voluntary retirement model for a borrowing and short sale constrained investor who faces cointegration between the stock and labor markets. With reasonable parameter values, there exists a target wealth-to-income ratio under which the investor does not participate in the stock market at all, whereas above which the investor increases the proportion of financial wealth invested in the stock market as...

March 17, 2017
Articles, Investing, Labor Market, Pension design, ,
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17Mar

Amicus Brief of National Employment Lawyers Association in Advocate Health Care Network v. Stapleton

By Matthew C. Koski, Brian Wolfman (Georgetown University) & Wyatt Gregory Sassman (Charleston School of Law) The Employee Retirement Income Security Act of 1974 (ERISA) governs the conduct of employers that offer pensions and certain other benefits to their employees. In enacting the law, “Congress’s primary concern was with the mismanagement of funds accumulated to finance employee benefits and the failure to pay employees benefits from accumulated funds.” Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936, 946 (2016)...

March 17, 2017
Articles, Labor Market, Pension design, ,
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17Mar

Labor Force Participation in New England vs. The United States, 2007–2015: Why Was the Regional Decline More Moderate?

By Mary A. Burke (Federal Reserve Bank of Boston) This paper identifies the main forces that contributed to the decline in labor force participation in New England between 2007 and 2015, as well as the forces that moderated the region’s decline relative to that of the nation. This exercise contributes to an assessment of the outlook for participation in New England moving forward. Similar to previous findings pertaining to the United States as a whole, the single largest factor in...

March 17, 2017
Articles, Labor Market,
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14Mar

Personalized Information as a Tool to Improve Pension Savings: Results from a Randomized Control Trial in Chile

By Olga Fuentes; Jeanne Lafortune; Julio Riutort; José Tessada Félix Villatoro We randomly offer to workers in Chile personalized versus generalized information about their pension savings and forecasted pension income. Personalized information increased the probability and amounts of voluntary contributions after one year without crowding-out other forms of savings. Personalization appears to be very important: individuals who overestimated their pension at the time of the intervention saved more. Thus, a person’s inability to understand how the pension system affects them...

March 14, 2017
Articles, Labor Market, Savings, , , ,
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13Mar

Is There a Positive Incentive Effect from Privatizing Social Security: Evidence from Latin America

By Truman G. Packard (World Bank) There is increasing concern among policymakers that social security reforms that involve a transition to individual retirement savings accounts may exclude certain groups of workers from coverage against the risk of poverty in old age. While most public pay-as-you-go systems pool the risk of interrupted careers and periods of low earnings over the covered population, the reformed systems shift the burden of these risks to the individual. Adequate coverage under a system of individual...

March 13, 2017
Articles, Labor Market, Regulation, , ,
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10Mar

Does Financial Regulation Unintentionally Ignore Less Privileged Populations?

By Maya Haran Rosen & Orly Sade (Hebrew University) In 2014, the Israeli insurance and long term savings regulator reached out to the Israeli population to help individuals find inactive retirement plans and withdraw inactive funds. We find that the government's effort did not result in withdrawals of the majority of the accounts, and did not reach all subpopulations equally. Provident fund records indicate that those who took financial action and withdrew funds following the campaigns live in localities in...

March 10, 2017
Articles, Labor Market, Regulation, , ,
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08Mar

Problems of Reforming the Institute of Early Pensions for Work in Harmful and Hazardous Conditions

By Yury Mikhailovich Gorlin, Nadezhda Galieva, Elena E. Grishina, Marina A. Eliseeva, Vladimir Kartavtsev & Anna Cheremnykh (RANEPA) One of the main lines of the strategy for long-term development of the pension system of the Russian Federation, approved by the Resolution of the Russian Government is the reform of early retirement institute. In this area Russian Government set an additional tariff of insurance premiums for employers who offer hazardous work; a special assessment of the working conditions is being made,...

March 8, 2017
Articles, Labor Market, Pension design, Regulation,
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08Mar

Using Panel Tax Data to Examine the Transition to Retirement

By Peter J. Brady & Steven Bass (Investment Company Institute); Jessica Holland & Kevin Pierce (Government of the United States of America - Internal Revenue Service) Using panel data from the Internal Revenue Service’s Statistics of Income (SOI) Division, we find that most individuals do not experience a reduction in inflation-adjusted spendable income after claiming Social Security. We also examine the composition of income after claiming and find that both Social Security benefits and non-Social Security retirement distributions typically represent...

March 8, 2017
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