September 2018

21Sep

Endowment Effects and Usage of Financial Products: Field Evidence from Malawi

By Xavier Giné (World Bank - Development Research Group (DECRG)), Jessica Goldberg (University of Maryland, Department of Economics) When offered a choice between two savings accounts, prior account holders are significantly less likely to switch to a cheaper account, compared with new subjects without a prior account. While 49 percent of account holders retained their original, expensive accounts, none of the new subjects who opened an account chose the expensive one. This finding is consistent with the "endowment effect." Exploiting...

September 21, 2018
Articles, Savings, , ,
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21Sep

Predicting Retirement Savings Using Survey Measures of Exponential-Growth Bias and Present Bias

By Gopi Shah Goda (Stanford University), Matthew Levy (London School of Economics & Political Science (LSE) - Department of Economics), Colleen Flaherty Manchester (University of Minnesota), Aaron Sojourner (University of Minnesota; IZA Institute of Labor Economics), Joshua Tasoff (Claremont Colleges - Claremont Graduate University) In a nationally-representative sample, we predict retirement savings using survey-based elicitations of exponential-growth bias (EGB) and present bias (PB). We find that EGB, the tendency to neglect compounding, and PB, the tendency to value the present...

September 21, 2018
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17Sep

Medium-Run Implications of Changing Demographic Structures for the Macro-Economy

By Yunus Aksoy (Birkbeck, University of London),Henrique S. Basso (Birkbeck College, University of London) & Ron Smith (Birkbeck College) In the decade since the onset of the financial crisis, the disappointing recovery has sparked renewed concern about the medium-run outlook for advanced economies. Rather than returning to the pre-crisis trend, output has continued to diverge from it. It is difficult to know whether this is a cyclical phenomenon, a slow recovery towards steady state, or a secular change in the...

September 17, 2018
Aging, Articles, Labor Market, Savings, ,
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08Sep

Retirement Savings Policy: Past, Present, and Future

By Michael P. Barry "Mike brings to this work his comprehensive experience and consummate technical talent in a beautifully readable book. A treasure." --Frank Cummings, Former Adjunct Lecturer in Law at UVA Law School, Columbia Law School, NYU Law School, and ALI-ABA Retirement Savings Policy reviews the basic policies that govern retirement savings plans, and their real world application, focusing on the key issues of finance, taxation, fiduciary conduct, and employee choice. The discussion is framed around the three fundamental challenges confronting...

September 8, 2018
Books, Regulation, Savings,
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08Sep

2018 Retirement preparedness survey: A Generational Challenge

By Prudential The U.S. retirement landscape has changed dramatically over the past few decades. Fewer workers today are eligible to receive a pension and instead must save for their own retirements, typically through workplace savings plans. Replacement rates for Social Security are declining due to the increase in the “full retirement age.”1 Income is becoming less predictable, thanks in part to new employment models. Health care costs are increasing, and so is longevity—which means workers today don’t just have more...

September 8, 2018
Aging, Books, Labor Market, Savings, , ,
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03Sep

What Age Do You Feel? – Subjective Age and Economic Behaviors

By Zihan Ye (Zhejiang University - College of Economics) & Thomas Post (Maastricht University - School of Business and Economics - Department of Finance; Netspa) Building on recent findings in psychology, we study the impact of subjective age (feeling younger or older than one’s chronological age) on economic behaviors. Using data from the Health and Retirement Study we find that subjective age predicts economic behaviors: Individuals with younger age identities have higher work engagement, and their savings profile, as a...

September 3, 2018
Aging, Articles, Savings,
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August 2018

18Aug

The Relationship Between Financial Planner Use and Holding a Retirement Saving Goal: A Propensity Score Matching Analysis

By Kyoung Tae Kim (University of Alabama), Tae-Young Pak (University of Alabama), Su Hyun Shin (University of Alabama) & Sherman D. Hanna (Ohio State University (OSU)) It has been well established in the literature that financial advice leads to informed decision making and improved financial outcomes. However, there is limited evidence regarding the link between financial planner use and attitudes towards retirement saving. As financial planners provide comprehensive advice for the long-term benefits of clients, their clients may become more...

August 18, 2018
Aging, Articles, Labor Market, Pension design, Savings, ,
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18Aug

Financial Fraud among Older Americans: Evidence and Implications

By Marguerite DeLiema, Martha Deevy, Annamaria Lusardi, Olivia S. Mitchell The consequences of poor financial capability at older ages are serious and include making mistakes with credit, spending retirement assets too quickly, and being defrauded by financial predators. Because older persons are at or past the peak of their wealth accumulation, they are often the targets of fraud. Our project analyzes a module we developed and fielded in the 2016 Health and Retirement Study (HRS). Using this dataset, we evaluate...

August 18, 2018
Aging, Articles, Labor Market, Savings, Slider-Left, ,
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11Aug

The Power of Working Longer

By Gila Bronshtein This paper compares the relative strengths of working longer vs. saving more in terms of increasing a household’s affordable, sustainable standard of living in retirement. Both stylized households and actual households from the Health and Retirement Study are examined. We assume that workers commence Social Security benefits when they retire. The basic result is that delaying retirement by 3-6 months has the same impact on the retirement standard of living as saving an additional one-percentage point of...

August 11, 2018
Aging, Articles, Labor Market, Savings, Slider-Left, ,
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11Aug

Behavioral Household Finance

John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian NBER Program(s):Aging, Public Economics This chapter provides an overview of household finance. The first part summarizes key facts regarding household financial behavior, emphasizing empirical regularities that are inconsistent with the standard classical economic model and discussing extensions of the classical model and explanations grounded in behavioral economics that can account for the observed patterns. This part covers five topics: consumption and savings, borrowing, payments, asset allocation, and insurance. The second part...

August 11, 2018
Articles, Investing, Savings
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