Social security wealth and retirement decisions in Italy

This paper uses administrative data to study the retirement decisions of Italian privatesector non-agricultural employees during the period 1977—1997. Our analysis tries to assess the importance of the financial incentives built into the social security system. The basic idea is very simple: at any given age, and based on the available information, workers compare theexpected present value of two alternatives: retiring today or working one more year, and then choose the best one. A key role in this kind of comparisons is played by social security wealth, whose level and changes reflect the expectations about the profile of future earnings and the institutional features of the social security system. The various incentive measures that we consider differ in the precise weight given to the social security wealth that workers accrue as they continue to work. Our model does not provide a structural representation of the retirement process. A worker’s decision is modeled here following a “quasi reduced-form” approach, with the incentive measures entering as predictors of the worker’s choice in addition to standard variables. The estimated models are then used to predict retirement probabilities under alternative policies that change social security wealth and derived incentive measures

Annuity puzzle: Evidence from a Swiss pension fund

We analyze individual annuitization decisions at retirement in an environment with mandatory participation in a funded pension pillar and low average annuity price. Using administrative data from a large Swiss insurance company over the period 2011–2015, we document that, even in this favorable environment, only 42.7% of the retirees fully annuitize, against 45% taking full lump sum. We show that individual annuitization decisions strongly respond to financial incentives, measured by the Money Worth Ratio, and to the tax rates on annuity and lump-sum payments. Lump-sum payments are more common among French- and Italian-speaking individuals. Using Survey of Health, Ageing and Retirement in Europe data, we show that French- and Italian-speaking Swiss are more likely to leave inheritance—thus suggesting that preferences for bequests may affect annuitization decisions. Finally, we provide evidence of asymmetric information, using the unused observable test, to show that individuals living in high mortality municipalities are less likely to annuitize and more likely to cash out their pension wealth

Occupation and working outcomes during the Coronavirus Pandemic

Using data from the first wave of the SHARE COVID-19 Survey and additional information collected from the previous waves of SHARE (Survey of Health Ageing and Retirement in Europe), we explore the effects of job characteristics on two outcomes: (i) the probability of work interruptions and (ii) the length of such interruptions during the first phase of the Coronavirus Pandemic. In order to assess the relationship between job features and labour market outcomes, we define two indexes proxying the pre-COVID-19 technical remote work feasibility as well as the level of social interaction with other people while working. Moreover, we use an indicator that classifies ISCO-08 3-digit job titles based on the essential nature of the good or service provided. We find that job characteristics have been major determinants of the probability of undergoing work interruptions and their duration. In addition, we show that women have been negatively affected by the Pandemic to a much larger extent than men, suggesting the relevance of the intrinsic characteristics of jobs they are mainly involved in, and the role of gender selection into specific activities. Not only females were more likely to have undergone work interruptions but they also exhibited larger probabilities of longer work breaks. A similar impact is seen for self-employed and less-educated workers

Did the pandemic change retirement trends?

The average retirement age increased during the pandemic. Only a few individuals reported retiring earlier than planned due to the pandemic. Mental health issues led to earlier retirement. Working from home and receiving financial support from the government were associated with later retirement. Giving older workers the chance to work remotely may provide a bridge to retirement, as eliminating commuting time and allowing employees to work in a familiar environment may induce them to prolong their working life

The Length of Working Lives in Europe

In this paper we ask what is the length of working life in Europe, whether it differs by gender, birth cohort, and schooling level, and what are the main differences across countries. We also ask whether there is a trend towards shorter working lives, and to what extent it is due to the delayed entry into the labor force or earlier withdrawal from the labor force

Dinamiche demografice e politiche pubbliche

L’intervento pubblico in economia non può prescindere dalle dinamiche demografiche. La demografia determina (almeno in parte) quanta parte della popolazione è in età lavorativa, e quanta parte invece in età scolare o in età di pensionamento. E' necessario abbandonare politiche economiche e di welfare che andavano bene cinquant’anni fa, quando gli anziani erano pochi, a settant’anni gran parte di loro era in cattiva salute, e le famiglie avevano due, tre o quattro figli

Health, Welfare and Inequality

This paper uses data from the Health and Retirement Study (HRS) to study the relationship between health status and economic welfare at household level. We develop a model to estimate the welfare cost of ill health by exploiting the methodology of the equivalence scales. The crucial variables in this approach are, be sides the health status (measured in several dimensions), the economic decisions of the house hold which can be directly related to health conditions, such as health-related expenses. By estimating a demand system we derive health-equivalence scales to learn about the cost of health conditions on economic welfare, controlling for other covariates. Ou r estimates suggest that – when taking account of health – the welfare of households in poor health drops substantially and inequality increases. There are important social welfare costs associated with differences in the health status of the elderly in the USA