May 2018

14May

Endogenous Retirement Behavior of Heterogeneous Households Under Pension Reforms

By Axel H. Börsch-Supan (Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)), Klaus Härtl (Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)), Duarte Nuno Leite (Max Planck Institute for Social Law and Social Policy; Universidade do Porto - CEF.UP - Center for Economics and Finance at UP) & Alexander Ludwig (Goethe University Frankfurt - Research Center SAFE; University of...

May 14, 2018
Articles, Pension design, Regulation, ,
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07May

The Use of Locally Imposed Selective Taxes to Fund Public Pension Liabilities

By Thad Calabrese (New York University (NYU) - Robert F. Wagner Graduate School of Public Service) This chapter examines a growing phenomenon in pension funding in which jurisdictions enact a new selective tax or fee, or increase an existing one, to reduce unfunded pension liabilities. Selective sales tax refers to a sales tax confined to a particular commodity or a limited number of commodities, such as a tax on sales of liquor, cigarettes, gasoline, or other petroleum products. Because this...

May 7, 2018
Articles, Pension design,
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07May

Poverty in Retirement: The Long-Term Impact of Rising Economic Inequality

By David W. Rasmussen (Pepper Institute on Aging and Public Policy) Income inequality is exacerbated by labor market trends that increase the demand for high skill occupations and those in low skill service occupations. This hollowing out of the middle of the income distribution means that an increasing portion of households will be less prepared for retirement as they approach age 65: they will have saved less, have diminished access to define benefit pension plans, and face smaller social security...

May 7, 2018
Aging, Articles, Labor Market,
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07May

Designing Pension Systems with Coherent Funded Private Pillars Including Issues for Notional Defined Contribution Schemes

By William Joseph Price (World Bank) This paper reviews the factors that should guide the design of private funded pensions to create a complete pension system alongside a notional defined contribution -- or public -- component. It argues that a mix of public and private pensions is the most effective option to deliver the best combination of pension outcomes. Pension design should start with a vision for five core outcomes: coverage, adequacy, sustainability, efficiency, and security. Thinking through these outcomes...

May 7, 2018
Articles, Pension design, Savings,
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April 2018
23Apr

Selecting Directors Using Machine Learning

By Isil Erel, Léa H. Stern, Chenhao Tan, Michael S. Weisbach Can an algorithm assist firms in their hiring decisions of corporate directors? This paper proposes a method of selecting boards of directors that relies on machine learning. We develop algorithms with the goal of selecting directors that would be preferred by the shareholders of a particular firm. Using shareholder support for individual directors in subsequent elections and firm profitability as performance measures, we construct algorithms to make out-of-sample predictions...

April 23, 2018
Articles, Corporate Governance,
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23Apr

Organizing Old Age Pensions for India's Informal Workers: A Case Study of a Sector-Driven Approach

By M.R. Narayana (University of Mysore) About 88 percent of India’s total labor force is composed of informal (officially labeled “unorganized”) workers. As many as 388 million such workers lack old age income security by way of a pension system. The Atal Pension Yojana (APY) is the latest contributory, national-level old age pension scheme for unorganized workers, with an entry age of 18–40 years. In other words, all current unorganized workers above the age of 40 are excluded. How could...

April 23, 2018
Aging, Articles, Labor Market, Pension design, , ,
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23Apr

Organizing Old Age Pensions for India’s Informal Workers: A Case Study of a Sector-Driven Approach

By M.R. Narayana (University of Mysore) About 88 percent of India’s total labor force is composed of informal (officially labeled “unorganized”) workers. As many as 388 million such workers lack old age income security by way of a pension system. The Atal Pension Yojana (APY) is the latest contributory, national-level old age pension scheme for unorganized workers, with an entry age of 18–40 years. In other words, all current unorganized workers above the age of 40 are excluded. How could...

April 23, 2018
Aging, Articles, Labor Market, Pension design, , ,
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23Apr

Retirement Drawdown Defaults: The Role of Implied Endorsement

By Jennifer Alonso-García (University of New South Wales (UNSW) - ARC Centre of Excellence in Population Ageing Research (CEPAR)), Hazel Bateman (University of New South Wales (UNSW) - School of Actuarial Studies, Centre for Pensions and Superannuation), Johan Bonekamp (Tilburg University - Department of Econometrics & Operations Research), Ralph Stevens (CPB Netherlands Bureau of Economic Policy Analysis; CEPAR) This paper explores whether implied endorsement can serve as an explanation for the stickiness of retirement drawdown defaults. Using an experimental survey...

April 23, 2018
Articles, Pension design, Savings, ,
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16Apr

Why Do Defaults Affect Behavior? Experimental Evidence from Afghanistan

By Joshua Blumenstock, Michael Callen, Tarek Ghani We report on an experiment examining why default options impact behavior. By randomly assigning employees to different varieties of a salary-linked savings account, we find that default enrollment increases participation by 40 percentage points—an effect equivalent to providing a 50% matching incentive. We then use a series of experimental interventions to differentiate between explanations for the default effect, which we conclude is driven largely by present-biased preferences and the cognitive cost of thinking...

April 16, 2018
Articles, Labor Market, Savings, ,
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15Apr

Italy: Toward a Growth-Friendly Fiscal Reform

By Michal Andrle (International Monetary Fund (IMF)), Shafik Hebous (International Monetary Fund), Alvar Kangur (International Monetary Fund (IMF)), Mehdi Raissi (International Monetary Fund (IMF) - Asia and Pacific Department) Published in late 2017, the Italian medium-term fiscal plan aims to achieve structural balanceby 2020, although concrete, high-quality measures to meet the target are yet to be specified.This paper seeks to contribute to the discussion by: (i) assessing spending patterns to identifyareas for savings (ii) evaluating the pension system (iii) analyzing the scope for...

April 15, 2018
Articles, Regulation, ,
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