January 2021

The Informal Economy and its Relation to Global poverty

The informal economy, also known as the informal sector, is the diversified set of economic activities, enterprises, jobs and workers that are not regulated or protected by the state. The definition of the informal economy has also recently expanded to include wage employment in unprotected jobs, such as daily wage jobs. However, generalizations of the informal economy often include terms such as “illegal” or “black market.” On the contrary, the vast majority of informal workers simply attempt to earn an honest...

December 2020

Understanding Debt in the Older Population

By Annamaria Lusardi, Olivia S. Mitchell, Noemi Oggero Poor financial capability can erode well-being in later life. To explore debt and debt management among older Americans, age 51-61, we designed and analyzed a new module in the 2018 Health and Retirement Study along with information from the 2018 National Financial Capability Study. Even though this group should be at the peak of their retirement savings, it nevertheless carries debt due to student loans and unpaid medical bills; having children...

Study: Over 142 million people aged 60 years are unable to meet their basic daily needs

At least 14% of all people aged 60 years and over ̶ more than 142 million people ̶ are currently unable to meet all their basic daily needs according to the Baseline report for the Decade of Healthy Ageing, released by the World Health Organization today. Read also UN organizations launch new initiative to improve the lives of older people The Baseline report brings together data available for measuring healthy ageing, defined by WHO as "the...

Malta. Three in ten pensioners at risk of poverty

The proportion of pensioners at risk of living in poverty in Malta is increasing year on year, reaching 29.1 per cent of over 65s last year. And older women are more likely to teeter on the brink of poverty due to having to rely solely on their husband's pension. While all other age groups have seen a reduction in poverty since 2013, those aged over 65 have seen an increase. The latest details were revealed in an evaluation of...

Ireland. A new model for pensions required

Sir, – Reading of the restoration of pension payments to 4,000 of the highest-paid public office-holders and pay increases for judges under the public pay agreement is infuriating. One wonders why these are being restored at all during a crisis, with unprecedented public spending commitments to compensate thousands who have lost their jobs and livelihoods during the pandemic. We are also informed that a number of senior HSE executives will receive lump-sum payments of €300,000 upon retirement and annual...

The Age Profile of Life-Satisfaction after Age 65 in the U.S

By Péter Hudomiet, Susann Rohwedder Although income and wealth are frequently used as indicators of well-being, they are increasingly augmented with subjective measures such as life satisfaction to capture broader dimensions of individuals’ well-being. Based on data from large surveys of individuals, life satisfaction in cross-section increases with age beyond retirement into advanced old age. It may seem puzzling that average life satisfaction would be higher at older ages because older individuals are more likely to experience chronic or...

November 2020

South Africa. The scary facts about the gender pension gap

Echoing concerns raised by the World Economic Forum earlier this year, 10X Investments’ new South African Retirement Reality Report adds more data showing this worrying trend of women falling further behind men. 10X’s third annual Retirement Reality Report (RRR20) shows that the retirement savings gap between the genders has grown in the last year, not only because the gender pay gap has widened, but because many women continue to reject the best option they have for narrowing the gap,...

The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival

By Charles Goodhart, Manoj Pradhan This original and panoramic book proposes that the underlying forces of demography and globalisation will shortly reverse three multi-decade global trends – it will raise inflation and interest rates, but lead to a pullback in inequality. “Whatever the future holds”, the authors argue, “it will be nothing like the past”. Deflationary headwinds over the last three decades have been primarily due to an enormous surge in the world’s available labour supply, owing...

October 2020

Life-Care Tontines

By Peter Hieber, Nathalie Lucas This paper builds on the advantage of pooling mortality and morbidity risks, and their inherent natural hedge. We focus on classical mutual risk pooling schemes, i.e. tontines, and introduce a ``life-care tontine", which in addition to retirement income targets the needs of long-term care coverage for an ageing population. This scheme reduces adverse selection costs and is actuarially fair at each time. Pooling heterogeneous risks (i.e. different age groups) is shown to reduce overall...

Changes to Household Retirement Savings Since 1989

By Andrew G. Biggs This report uses two new data sources to provide insights on the evolution of retirement savings over the past three decades and how future retirees may fare. First, the Federal Reserve’s Survey of Consumer Finances and Distributional Financial Accounts (DFA) provide estimates of both household savings in retirement accounts and any benefits households accrued under a traditionally defined benefit pension. The DFA data show that, from 1989 through 2016, household retirement savings increased for every...