Rational Pension Reform

This paper is motivated by the idea to create, wherever possible, rational mechanisms that adapt pension systems automatically to a changed economic and demographic environment, rather than to leave such adaptations to discretionary high-profile pension reforms which all too often stir political opposition. The paper delineates the theory behind such rational mechanisms, shows the advantages and limits of „self-stabilizing“ pension systems, and compares the Swedish and the German approaches to rule-bound pension policy

Saving incentives, old-age provision and displacement effects: evidence from the recent German pension reform

In response to population aging, pay-as-you-go pensions are being reduced in almost all developed countries. In many countries, governments aim to fill the resulting gap with subsidized private pensions. This paper exploits the recent German pension reform to shed new light on the uptake of voluntary, but heavily subsidized private pension schemes. Specifically, we investigate how the uptake of the recently introduced "Riester pensions” depends on state-provided saving incentives, and how well the targeting to families and low-income households works in practice. We show that, after a slow start, private pension plans took off very quickly. While saving incentives were effective in reaching parents, they were less successful in attracting low-income earners, although Riester pensions exhibit a more equal pattern by income than occupational pensions and unsubsidized private pension plans. We also provide circumstantial evidence on displacement effects between saving for old-age provision and other purposes. Households who plan to purchase housing are less likely to have a Riester pension. The same holds for households who attach high importance to a bequest motive. Occupational pensions and other forms of private pensions, however, act as complements rather than as substitute

Pathways to Disability: Predicting Health Trajectories

The paper considers transitions in the health and disability status of persons as they age. In particular, we explore the relationship between health and disability at younger ages (say 50) and health and disability in future ages. We consider for example, the future health path of persons who are in good health at age 50 compared to the future health path of persons who are in poor health at age 50. To do this, we develop a model that jointly considers health and mortality. The key feature of the model is the assumption of underlying “latent” health that determines both mortality and self-reported responses to categorical health and disability questions. Latent health allows for heterogeneity among individuals and allows for correlation of health status over time, thus allowing for state dependence as well as heterogeneity. The model also allows for classification errors in self-reported response to categorical health and disability questions. All of these are important features of health and disability data as we show with descriptive data. The model accommodates the strong relationship between self-reported health status and mortality, which is critical to an understanding of the paths of health and disability of the survivors who are observed in panel data files. Our empirical analysis is based on all four cohorts of the Health and Retirement Study (HRS) -- the HRS, AHEAD, CODA and WB cohorts). We find that self-reported health and self-reported disability correspond very closely to one another in the HRS. We find that both self-reported health and disability are strong predictors of mortality. Health and disability at younger ages are strongly related to future health and disability paths of persons as they age. There are important differences in health and disability paths by education level, race, and gender

Social isolation, physical inactivity and inadequate diet among European middle-aged and older adults

Social isolation is a growing public health concern for older adults, as it has been associated with poor health and premature mortality. On the other hand, physical inactivity and an inadequate diet are important health risk behaviours associated with physical and mental health problems. Considering that there is no research examining the possible relationship between social isolation and the above mentioned health risk behaviours of European middle-aged and older adults, this cross-sectional study aims to contribute to filling this gap.Fundação Calouste Gulbenkia

Rentabilitätsvergleiche im Umlage- und Kapitaldeckungsverfahren : Konzepte, empirische Ergebnisse, sozialpolitische Konsequenzen

Die demographischen Veränderungen sind Auslöser einer grundsätzlicheren Debatte über Alterssicherungsverfahren, nämlich der Wahl eines effizienten Finanzierungsverfahrens der Altersvorsorge. Im Zentrum der Debatte steht immer wieder der Renditevergleich zwischen dem Umlage- und dem Kapitaldeckungsverfahren. Ihm gilt dieses Papier. Er ist keineswegs so einfach, wie es oft suggeriert wird, da Versicherungs- und Risikoaspekte, vor allem aber das Übergangsproblem berücksichtigt werden müssen. Der vorliegende Beitrag stellt den wirtschaftstheoretischen Hintergrund mit den wichtigsten relevanten Konzepten dar und präsentiert empirische Schätzungen zur heutigen und Simulationsergebnisse zur zukünftigen Entwicklung der relevanten Renditen. Wir schließen mit den sozialpolitischen Konsequenzen für eine reformierte Altersvorsorge