971 research outputs found
The Effects of Mandating Benefits Packages
[Excerpt] The purpose of this paper is to inform policymakers and the public about the potential labor market consequences of government mandating of employee benefits. Both theoretical and empirical economic arguments for and against benefit mandating are presented and assessed. In view of the continuing policy debate over health care and parental leave, these two areas are the focus of special attention in the discussion below
Worker Knowledge of Pension Provisions
This paper evaluates the quality of workers' information regarding pension offerings using both administrative records and worker reports of pension provisions. Missing and misinformation proves to be widespread. Unionized employees, higher income workers and those in large firms, the better educated, and those with greater seniority are better informed about their pensions. There are also demographic differences: nonwhites have less pension knowledge than whites, but women are better informed than men along several pension dimensions. Myopia about pension incentive structures is troubling since workers may save or consume suboptimally, change jobs, or retire earlier than they would have if equipped with better pension information. The prevalence of missing data should also be troubling to empirical pension analysts using data sets reporting workers' assessments of pension provisions.
Building an environment for pension reform in developing countries
Fiscal problems are prompting many developing nations to amend and sometimes restructure their national old-age programs. As they do, these countries seek guidance on how to design market and regulatory structures to enhance their chances of success. This paper investigates the types of risks facing participants in retirement systems, and examines which financial, regulatory, and labor market institutions appear most supportive of retirement system reforms, and most urgently needed, in developing countries.Insurance&Risk Mitigation,Banks&Banking Reform,Pensions&Retirement Systems,Environmental Economics&Policies,Financial Intermediation
Planning and financial literacy : how do women fare?
Many older US households have done little or no planning for retirement, and there is a substantial population that seems to undersave for retirement. Of particular concern is the relative position of older women, who are more vulnerable to old-age poverty due to their longer longevity. This paper uses data from a special module we devised on planning and financial literacy in the 2004 Health and Retirement Study. It shows that women display much lower levels of financial literacy than the older population as a whole. In addition, women who are less financially literate are also less likely to plan for retirement and be successful planners. These findings have important implications for policy and for programs aimed at fostering financial security at older ages
Annuities for an ageing world
Substantial research attention has been devoted to the pension accumulation process, whereby employees and those advising them work to accumulate funds for retirement. Until recently, less analysis has been devoted to the pension decumulation process – the process by which retirees finance their consumption during retirement. This gap has recently begun to be filled by an active group of researchers examining key aspects of the pension payout market. One of the areas of most interesting investigation has been in the area of annuities, which are financial products intended to cover the risk of retirees outliving their assets. This paper reviews and extends recent research examining the role of annuities in helping finance retirement consumption. We also examine key market and regulatory factors
Financial literacy and retirement planning: new evidence from the Rand American Life Panel
The present paper introduces a new dataset, the Rand American Life Panel (ALP), which offers several appealing features for an analysis of financial literacy and retirement planning. It allows us to evaluate financial knowledge during workers’ prime earning years when they are making key financial decisions, and it offers detailed financial literacy and retirement planning questions, permitting a finer assessment of respondents’ financial literacy than heretofore feasible. We can also compare respondents’ self-assessed financial knowledge levels with objective measures of financial literacy, and most valuably, we can investigate prior financial training which permits us to identify key causal links. By every measure, and in every sample we examine, financial literacy proves to be a key determinant of retirement planning. We also find that respondent literacy is higher when they were exposed to economics in school and to company-based financial education programs. JEL Classification: D9
Effects of Social Security Reforms: An Empirical Life Cycle Model for the United States
[Excerpt] The system of publicly-provided old age pensions, known in the United States as Social Security, faces serious financial difficulties. As in other countries, the problems are of both a short run and a long run nature. The short run problem is that the U.S. Social Security system has very meager financial reserves; the revenues coming into the system are barely enough to cover commitments. In the long run (i.e., after 2010, when the post World War II baby boom generation reaches retirement age), the financial problems of Social Security will intensify, due primarily to population aging and the consequent decline in the ratio of workers to retirees. For an elaboration of these problems, see Thompson, 1983.
These problems have led to proposed reforms aimed at assuring the financial stability of the systems. The question addressed here is: what effects will these reforms have on three variables - retirement ages, retirement incomes, and the Social Security system. This paper presents estimates of the effects of four actual or proposed policy changes. The basic model and some of the estimated effects are drawn from previous work; see Fields and Mitchell (1984) and the references cited therein. However, the estimates presented here of the effects of Social Security reforms on the Social Security system itself are new
Estimating the Effects of Changing Social Security Benefit Formulas
[Excerpt] The U.S. Social Security system faces serious financial difficulties in both the short and the long run. The short-run problem is that the system has very meager financial reserves. In the long run—after the year 2010, when the post-World-War-II baby-boom generation reaches retirement age—the financial problems of Social Security will intensify because of population aging and the consequent decline in the ratio of workers to retirees.
These problems have led to proposed reforms aimed at assuring the financial stability of the system. The question addressed here is: what effects would these reforms have on three variables—retirement ages, retirement incomes, and the Social Security system? This paper highlights the estimated effects of four actual or proposed policy changes. The basic model and some of the effects are drawn from previous work. However, the estimates of the effects of Social Security reforms on the Social Security system itself are new
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