Social Security Research at the University of Michigan Retirement and Disability Research Center

In 1998, the Social Security Administration established the Retirement Research Consortium to encourage research on topics related to Social Security and the well-being of older Americans, and to foster communication between the academic and policy communities. The Michigan Retirement Research Center (MRRC) participated in the Consortium from its inception until 2019, when the MRRC expanded and became the Michigan Retirement and Disability Research Center. This article surveys a selection of the MRRC’s output over its second 10 years (2008–2017), summarizes its innovative use of new data sources, and highlights several key themes in the center’s research contributions

Personal Care Savings Bonds: A New Way of Saving Towards Social Care in Later Life

An ageing population ushers in a completely new era requiring society to find new solutions to funding social care and looking after older people. This is not a temporary issue that will go away and there are no quick economic fixes. In the U.K. it is estimated that the population aged 75+ will double from 5 million to 10 million by 2040. Financial building blocks are needed to pay for social care that will be sustained for decades and provide extra security for the individual. This paper proposes a new savings product called Personal Care Savings Bonds (PCSBs), which are designed to encourage saving for social care by providing extra money at the time of greatest financial need. PCSBs are likely to be attractive to older people who have only a basic pension and modest savings, but also to other age groups, as they not only attract interest but also pay prizes. Based on reasonable assumptions, the paper shows how the fund could build into a substantial investment worth £70 billion with regular monthly prize pay-outs. In concept they are somewhat similar to Premium Bonds, another U.K. personal savings product that has been successfully operating since 1956

Sustainability Practices in Global IT Outsourcing

Buyers and providers of global IT outsourcing increasingly strive for sustainability. Lessons from global leaders can give strategic and responsive direction to the IT outsourcing industry and to buyers of outsourcing services

Like Father, Like Son: Inheriting and Bequeathing

Empirical evidence suggests that parents who have themselves inherited from their own parents are more likely to leave an estate to their children even after controlling for income, wealth and education. This implies an indirect reciprocal behavior between three generations by transmitting the attitude towards bequeathing from one generation to the next. We incorporate such an intergenerational chain into an overlapping generations model and show that the economy might be characterized by multiple steady states involving poverty traps. Individuals will not leave bequests unless per capita income levels exceed a threshold level. In such a situation, an unfunded social security security programme may help to overcome poverty by providing additional old age income out of which to bequeath.Empirische Ergebnisse deuten darauf hin, dass Eltern, die etwas geerbt haben, unabhängig von etwaigen Einkommens- und Vermögenseffekten, eher geneigt sind selbst auch zu vererben. Dies impliziert ein indirekt reziprokes Verhalten zwischen drei Generationen, bei dem die Einstellung gegenüber dem Vererbungsvorgang von einer Generation zur nächsten weitergegeben wird. Wir integrieren eine solche intergenerationale Verknüpfung in ein überlappendes Generationenmodell und zeigen, dass die resultierende Ökonomie durch multiple Gleichgewichte, einschließlich Armutsfallen, charakterisiert werden kann. Individuen vererben nur dann an ihre Nachkommen, wenn das eigene Pro-Kopf-Einkommen hinreichend hoch ist und einen gewissen Schwellenwert überschreitet. In einer solchen Situation kann ein umlagefinanziertes Rentensystem dazu beitragen der Armut zu entkommen, indem es den Individuen zusätzliches Alterseinkommen zur Verfügung stellt, aus dem sie vererben können

Public Pensions and Labor Supply Over the Life Cycle

Virtually all developed countries face projected budget shortfalls for their public pension programs. The shortfalls arise for two reasons. First, populations in developed countries are aging rapidly. Second, until recently older individuals in developed countries have been retiring earlier. These two developments have created serious strains on public pension programs. In order to remain fiscally solvent, many governments have reformed their public pension schemes to encourage labor supply at older ages. These reforms include reductions in the generosity of public pensions and reduced penalties for working past the normal retirement age. In this paper, we consider how reforms to public pension systems affect labor supply over the life cycle. We put the recent empirical evidence on the effect of government pensions on labor supply in a life cycle context, and we present evidence on the effectiveness of tax reforms for stimulating labor supply over the life cycle. Our main conclusion is that the labor supply of older workers is responsive to changes in retirement incentives. The labor supply of younger workers is less responsive. Thus the trend towards lower taxes on older workers in many developed countries is likely to continue to fuel the recent trend towards later retirement. This, in turn, is likely to reduce the financial strain on public pension schemes

Real-time, appliance-level electricity use feedback system: How to engage users?

Engage is a rapidly deployable, retrofit energy monitoring system developed for direct support of a novel energy use behavior investigation and a large-scale deployment in campus apartments. We describe the end-to-end system and report results related to web dashboard engagement during a year-long experiment. The objective was to determine user engagement with real-time and easily accessible information about personal energy consumption. Leveraging low-cost components, this system was designed to measure separately appliance plug load, heating and cooling, and lighting electrical load in dense-occupancy building environments. We developed and used an open source technology for measurement of plug load and developed signal processing algorithms to significantly improve measurement accuracy. We also developed proxy sensors to measure heating and cooling and lighting. Our results indicate that 90% of the dashboard activity was undertaken by 50% of the participants and that website engagement was more likely in mid-day and more effective in combination with email reminders. Energy conservation was achieved when combining the dashboard with public information about energy consumption. © 2013 Elsevier B.V. All rights reserved

The Incentive Effects of Higher Education Subsidies on Student Effort

This paper uses a game-theoretic model to analyze the disincentive effects of low-tuition policies on student effort. The model of parent and student responses to tuition subsidies is then calibrated using information from the National Longitudinal Survey of Youth 1979 and the High School and Beyond Sophomore Cohort: 1980-92. I find that although subsidizing tuition increases enrollment rates, it reduces student effort. This follows from the fact that a high-subsidy, low-tuition policy causes an increase in the percentage of less able and less highly motivated college graduates. Additionall