Social Security Rules and Labor Force Participation of Older Workers: Evidence from Chile

Recent research has argued that incentives stemming from social security systems influence the worker’s decision to retire. The experience of Chile, which radically changed its system in 1981, offers an opportunity to test this hypothesis. The new system tightened access to early pensions, replaced an actuarially unfair defined benefit plan with an actuarially fair defined contribution plan, exempted pensioners from the pension payroll tax and allowed widows to keep their own pension in addition to their survivor’s benefit. Although the old system is being phased out, since 1981 the two systems have co-existed. Using probit analysis of the behavior of a retrospective sample of new and old system affiliates, we estimate the impact of the new social security rules on the probability of dropping out of the labor force, for older workers. We find large effects. Age of pensioning has been postponed. Labor force participation is much higher among affiliates of the new system compared with the old, especially for pensioners and women. This is not simply due to selection: Aggregate participation rates have increased as the new system’s share of total affiliates has risen.

Crowd-out, Adverse Selection and Information in Annuity Markets: Evidence from a New Retrospective Data Set in Chile

Annuitization is often considered a socially desirable payout mode from pension plans, because it provides a lifelong income stream and therefore ensures that retirees will not run out of money. However, annuitization is rare in most countries. This project examines workers’ choices during the payout stage in Chile, the only country that has had mandatory personal accounts long enough to have had substantial experience with payouts. Upon retirement, workers in Chile have limited options for payouts: they must either annuitize or take gradual withdrawal. Two-thirds have annuitized. We expect that retirees are less likely to annuitize if their accumulation finances a pension in the vicinity of the minimum pension, whose value is guaranteed by the state. In that case, publiclyfinanced longevity insurance is likely to crowd out private annuity insurance. We expect that retirees with health problems are also less likely to annuitize, possibly leading to adverse selection. Finally, we expect that individuals with greater risk aversion, smaller time preference and better knowledge about the system are more likely to annuitize. A new retrospective data set from Chile yields evidence that is broadly consistent with these hypotheses.

Do Individual Accounts Postpone Retirement: Evidence from Chile

Postponing retirement will become increasingly important as a means to increase the labor force, its output and old age security, as populations age. Recent research has focused on incentives stemming from the social security system that influence the worker’s decision to retire. Defined benefit systems (both public and private) often contain penalties for postponing access to pensions or continuing to work while receiving a pension. In contrast, the tight link between contributions and accumulations and the actuarial conversion of accumulations into pensions in privately managed defined contribution systems may lead workers to postpone pensions or to continue working after withdrawals begin. The experience of Chile, which implemented its new system in 1982, offers an opportunity to test if the change in incentives has indeed produced the expected change in retirement behavior. Using probit analysis of household survey data from 1960 to 2002, we estimate the impact of the pension reform on the probability of 1) becoming a pensioner and 2) dropping out of the labor force, for older workers. We find strong effects of the new system on both propensities, in the aggregate and at the individual level after controlling for individual and macro-economic variables. In particular, restricted access to early pensions and the exemption of pensioners from the pension payroll tax appear to exert a powerful effect on labor force participation rates.

The gender impact of pension reform : a cross-country analysis

Pension systems may have a different impact on gender because women are less likely than men to work in formal labor markets and earn lower wages when they do. Recent multipillar pension reforms tighten the link between payroll contributions and benefits, leading critics to argue that they will hurt women. In contrast, supporters of these reforms argue that it will help women by the removal of distortions that favored men and the better targeted redistributions in the new systems. To test these conflicting claims and to analyze more generally the gender effect of alternative pension systems, the authors examine the differential impact of the new and old systems in three Latin American countries-Argentina, Chile, and Mexico. Based on household survey data, they simulate the wage and employment histories of representative men and women, the pensions they are likely to generate under the new and old rules, and the relative gains or losses of men and women because of the reform. The authors find that women do accumulate private annuities that are only 30-40 percent those of men in the new systems. But this effect is mitigated by sharp targeting of the new public pillars toward low earners, many of whom are women, and by restrictions on payouts from the private pillars, particularly joint annuity requirements. As a result of these transfers, total lifetime retirement benefits for women reach 60-80 percent those of men, and for"full career"women they equal or exceed benefits of men. Also as a result, women are the biggest gainers from the pension reform. For women who receive these transfers, female/male ratios of lifetime benefits in the new systems exceed those in the old systems in all three countries. Private intra-household transfers from husband to wife in the form of joint annuities play the largest role.Pensions&Retirement Systems,Public Health Promotion,Health Monitoring&Evaluation,Population&Development,Gender and Development,Health Monitoring&Evaluation,Pensions&Retirement Systems,Population&Development,Agricultural Knowledge&Information Systems,Anthropology

Exploring grassroots feedback about cancer challenges in South Africa: a discussion of themes derived from content thematic analysis of 316 photo-narratives

Introduction: Cancer is an important health problem in Africa with projections that incidence could double by 2030. While sparse, the literature on cancer control in African low- and middle-income countries suggests poor cancer planning, overburdened services and poor outcomes. South Africa has established oncology health care services but also has low cancer awareness, poor cancer surveillance and widespread service challenges.Methods: Data for this study was derived from 316 photovoice interviews with cancer patients, families of cancer patients and oncology workers across South Africa. The objectives of the study were to collect first-hand feedback about cancer challenges and to develop recommendations for the improvement of cancer control strategies.Results: 9 themes of cancer challenges were distinguished via thematic content analysis of the photo-narratives. The identified themes of cancer challenges were physical and treatment challenges, emotional, poor services, transport, finances, information, powerlessness, stigma, and schooling challenges.Conclusion: The findings of this study offer the patient and family perspective of cancer challenges as a valid contribution to our body of cancer knowledge. The 9 themes of cancer challenges profile the emotional, physical and social impact of cancer on patients and families, and offer detailed subjective information about problem occurrence in the trajectory of care. Recommendations following from the 9 themes of cancer challenges include training for improved patientcentred care standards, the need for cancer surveillance, innovative and locally appropriate cancer awareness campaigns, private and government health care partnerships and the development of psychosocial services. The advocating of findings and recommendations to influence cancer control strategies in South Africa, is indicated.Keywords: South Africa, cancer challenges, patient-centred care, advocacy, stigm

Crowd-out, Adverse Selection and Information in Annuity Markets: Evidence from a New Retrospective Data Set in Chile

Annuitization is often considered a socially desirable payout mode from pension plans, because it provides a lifelong income stream and therefore ensures that retirees will not run out of money. However, annuitization is rare in most countries. This project examines workers’ choices during the payout stage in Chile, the only country that has had mandatory personal accounts long enough to have had substantial experience with payouts. Upon retirement, workers in Chile have limited options for payouts: they must either annuitize or take gradual withdrawal. Two-thirds have annuitized. We expect that retirees are less likely to annuitize if their accumulation finances a pension in the vicinity of the minimum pension, whose value is guaranteed by the state. In that case, publiclyfinanced longevity insurance is likely to crowd out private annuity insurance. We expect that retirees with health problems are also less likely to annuitize, possibly leading to adverse selection. Finally, we expect that individuals with greater risk aversion, smaller time preference and better knowledge about the system are more likely to annuitize. A new retrospective data set from Chile yields evidence that is broadly consistent with these hypotheses.http://deepblue.lib.umich.edu/bitstream/2027.42/49333/2/wp147.pd

The Impact of Private Participation on Disability Costs: Evidence from Chile

Social security systems in many countries face problems of high and escalating disability costs. This paper analyzes how disability costs have been controlled in Chile. The disability insurance system in Chile is much less well-known than the pension part, but it is equally innovative. It differs from traditional public disability insurance in two important ways: 1) it is largely pre-funded, sufficient to cover a lifetime disability annuity and 2) the disability assessment procedure includes participation by private pension funds (AFPs) and insurance companies, who finance the benefit and have a direct pecuniary interest in controlling costs. We hypothesize that these procedures and incentives will keep system costs low, by cutting the incidence of successful disability claims. Using the Cox proportional hazard model based on a retrospective sample of new and old system affiliates (ESP 2002), we conclude that observed behavior is broadly consistent with this hypothesis. Disability hazard rates are only 20-35% as high in the new system as in the old, after controlling for other co-variates. Furthermore, analysis of mortality rates among disabled pensioners (using probit and proportional hazard models) suggests that the new system has accurately targeted those with more severe medical problems.Social Security Administrationhttp://deepblue.lib.umich.edu/bitstream/2027.42/57574/1/wp161.pd

Structure factor of polymers interacting via a short range repulsive potential: application to hairy wormlike micelles

We use the Random Phase Approximation (RPA) to compute the structure factor, S(q), of a solution of chains interacting through a soft and short range repulsive potential V. Above a threshold polymer concentration, whose magnitude is essentially controlled by the range of the potential, S(q) exhibits a peak whose position depends on the concentration. We take advantage of the close analogy between polymers and wormlike micelles and apply our model, using a Gaussian function for V, to quantitatively analyze experimental small angle neutron scattering profiles of semi-dilute solutions of hairy wormlike micelles. These samples, which consist in surfactant self-assembled flexible cylinders decorated by amphiphilic copolymer, provide indeed an appropriate experimental model system to study the structure of sterically interacting polymer solutions

Improving the science-policy dialogue to meet the challenges of biodiversity conservation: having conversations rather than talking at one-another

A better, more effective dialogue is needed between biodiversity science and policy to underpin the sustainable use and conservation of biodiversity. Many initiatives exist to improve communication, but these largely conform to a ‘linear’ or technocratic model of communication in which scientific “facts” are transmitted directly to policy advisers to “solve problems”. While this model can help start a dialogue, it is, on its own, insufficient, as decision taking is complex, iterative and often selective in the information used. Here, we draw on the literature, interviews and a workshop with individuals working at the interface between biodiversity science and government policy development to present practical recommendations aimed at individuals, teams, organisations and funders. Building on these recommendations, we stress the need to: (a) frame research and policy jointly; (b) promote inter- and trans-disciplinary research and “multi-domain” working groups that include both scientists and policy makers from various fields and sectors; (c) put in place structures and incentive schemes that support interactive dialogue in the long-term. These are changes that are needed in light of continuing loss of biodiversity and its consequences for societal dependence on and benefits from nature