February 2024
02Feb

Redistributive effects of pension reforms: who are the winners and losers?

By Miguel Sánchez-Romero, Philip Schuster & Alexia Prskawetz As the heterogeneity in life expectancy by socioeconomic status increases, many pension systems imply a wealth transfer from short- to long-lived individuals. Various pension reforms aim to reduce inequalities that are caused by ex-ante differences in life expectancy. However, these pension reforms may induce redistribution effects. We introduce a dynamic general equilibrium-overlapping generations model with heterogeneous individuals that differ in their education, labor supply, lifetime income, and life expectancy. Within this framework we...

February 2, 2024
Articles, System Sustainability, ,
Read more...

January 2024
12Jan

Pension Systems (Un)Sustainability and Fiscal Constraints: A Comparative Analysis

By Michael Wickens  Using an overlapping generations model, two new indicators of public pension system sustainability are proposed: the pension space, which measures the capacity to pay for pension expenditures out of labour taxation, and the pension space exhaustion probability reflecting demographic uncertainties. These measures reveal that the pension spaces of advanced economies are strikingly different. Most nations have little scope to further finance pensions out of labour income  taxation over the next thirty years. There is no one-size-fits-all solution....

January 12, 2024
Articles, System Sustainability, , ,
Read more...

December 2023
15Dec

Charting a Course Towards Universal Social Protection: Resilience, Equity, and Opportunity for All

By World Bank Group Charting a Course Towards Universal Social Protection: Resilience, Equity, and Opportunity for All, known as the Social Protection and Jobs Compass updates the World Bank strategy for social protection amid rapid change both within the sector and beyond. The Compass puts at its heart the vision of universal social protection. It recognizes that the progressive realization of universal social protection, which ensures access to social protection for all whenever and however they need it, is critical...

December 15, 2023
Books, Books, Reports, System Sustainability, , , ,
Read more...

October 2023
20Oct

Artificial Intelligence Policy: A Primer and Roadmap

By Ryan Calo Talk of artificial intelligence is everywhere. People marvel at the capacity of machines to translate any language and master any game. Others condemn the use of secret algorithms to sentence criminal defendants or recoil at the prospect of machines gunning for blue, pink, and white-collar jobs. Some worry aloud that artificial intelligence will be humankind’s “final invention.” This essay, prepared in connection with UC Davis Law Review's 50th anniversary symposium, explains why AI is suddenly on everyone's mind and...

October 20, 2023
Articles, System Sustainability, , , , , ,
Read more...

August 2023
18Aug

Public Employee Pensions and Municipal Insolvency

By Sean Myers  This paper studies how municipal governments jointly manage spending, credit market borrowing, and public employee pensions. I model governments as levered investors who must meet non-defaultable pension obligations and may value government spending more than citizens. I quantify the model using California city-level data, including a new record of fiscal emergencies, tax increases required to maintain essential services. After the financial crisis depleted pension funds, cities engaged in excessive risk-taking: the fiscal emergency option encouraged gambling for...

August 18, 2023
Articles, System Sustainability, , , , ,
Read more...

June 2023
09Jun

Sustainability of pension schemes. Building a smooth automatic balance mechanism with an application to the US social security

By Frédéric Gannon, Florence Legros & Vincent Touzé We build a “smooth” automatic balancing mecanism (S-ABM) which would result from an optimal tradeoff between increasing the receipts and reducing the expenditures of a pension scheme. The S-ABM obtains from minimizing a sum of discounted quadratic loss function under the constraint of an intertemporal budget balance. One advantage of this model of “optimal” adjustment is its ability to analyse various configurations in terms of ABMs by controlling the adjustment pace. Notably,...

June 9, 2023
Books, Books, System Sustainability, , ,
Read more...
09Jun

A Complaint Template for Legal Challenges to the Validity of the Statutory ‘Debt Ceiling’

By Robert C. Hockett The Statutory ‘Debt Ceiling’ appearing at 31 USC 3101(b), rooted in the Second Liberty Bond Act of 1917 aimed at expanding Treasury financing options during the First World War, is not valid in any application that would occasion default on U.S. sovereign debt, other contractual obligations, or Social Security or Veterans’ pension obligations. There are at least seven mutually reinforcing legal grounds for so saying. These include preemption of such application of the Ceiling by the...

June 9, 2023
Articles, System Sustainability, , , , ,
Read more...

May 2023
26May

Pension Reform: Conceptual Foundations and Practical Challenges

By Seamus Duffy & Oliver Giesecke Underfunded pension are the largest liability for state and local governments across the United States. As a result of increasing recognition of the associated risks, recent statutory funding mandates led to a sharp increases in required contributions, threatening city services and employee bases. As funding pressure mounts, pension reforms offer a viable tool for prudent economic policy. We propose five general principles that guide pension reform considerations and discuss how these principle stand in...

May 26, 2023
Articles, System Sustainability, , , ,
Read more...
26May

‘Earned, Not Given’? The Effect of Lowering the Full Retirement Age on Retirement Decisions

By Mathias Dolls & Carla Krolage This paper analyzes behavioral responses to a 2014 reform in the German public pension system that lowered the full retirement age (FRA) of individuals with a long contribution history by up to two years and framed the new FRA as reference age for retirement. Using administrative data from public pension insurance accounts, we first document a substantial bunching response at the FRA exceeding the control group’s bunching by 83%. Second, we show in a...

May 26, 2023
Articles, System Sustainability, , ,
Read more...
12May

“Milliman’s Pension Funding Index. May 2023”

By Milliman The funded status of the nation’s 100 largest corporate defined benefit pension plans decreased by $7 billion during April, as measured by the Milliman 100 Pension Funding Index (PFI). A decrease in the benchmark corporate bond interest rates used to value pension liabilities led to an increase in these liabilities of $10 billion for the month. As of April 30, the funded ratio fell to 99.5%, from 100.1% at the end of March. April saw the funding surplus...

May 12, 2023
Books, Books, Reports, System Characterization, System Sustainability, , ,
Read more...