Two essays on life cycle models

This dissertation consists of two essays. In "A Life-Cycle Model: Retirement, Savings, and Portfolio Allocation", I analyze the interrelationships among retirement, saving, and asset allocation. I show that optimal portfolio allocation can be very sensitive to plans about retirement timing and to the presence and characteristics of Social Security. I also show how portfolio decisions have impact on when to retire. In order to take into account these important effects, Social Security reform proposals should be evaluated with models that incorporate portfolio choice. In the second essay, "Asset Allocation, Bequests, and Wealth Dynamics of the Elderly", I build and estimate a life cycle model of asset allocation and saving with a fixed cost of stock market entry, medical expenditure risk, and a general bequest function that captures risk preferences over bequests. The estimates imply that there is no operative bequest motive, and that medical expenditure risk is a very strong motivation for saving at older ages. Even though the model explains reasonably well both the observed average age profiles and the heterogeneity in saving and portfolio allocation, the cross-equation restrictions that are required for internal consistency are strongly rejected. This is mainly due to the fact that, in constant relative risk aversion utility, a single parameter - coefficient of relative risk aversion - governs both wealth and portfolio paths. While a very high level of risk aversion is required to explain portfolio choices, a very low level of risk aversion is required to explain wealth dynamics. Despite its internal inconsistency, the model is one of the richest versions of the standard model and I use the estimates to do some policy simulations with caution. I used the estimates to simulate the impact of reducing the Social Security benefit of a 70-year old female retiree by a specific amount, and giving her a lump sum equal to the expected present discounted value of the benefit cut, which is to be invested in her individual account. I find that this reform would be undesirable. Main reason behind this is that, most retirees are either optimally annuitized or under-annuitized

New Estimates of Public Employment and Training Program Net Impacts: A Nonexperimental Evaluation of the Workforce Investment Act Program

This paper presents nonexperimental net impact estimates for the Adult and Dislocated Worker programs under the Workforce Investment Act (WIA), the primary federal job training program in the U.S, based on administrative data from 12 states, covering approximately 160,000 WIA participants and nearly 3 million comparison group members. The key measure of interest is the difference in average quarterly earnings or employment attributable to WIA program participation for those who participate, estimated for up to four years following entry into the program using propensity score matching methods. The results for the average participant in the WIA Adult program show that participating is associated with a several-hundred-dollar increase in quarterly earnings. Adult program participants who obtain training have lower earnings in the months during training and the year after exit than those who don’t receive training, but they catch up within 10 quarters, ultimately registering large total gains. The marginal benefits of training exceed, on average, $400 in earnings each quarter three years after program entry. Dislocated Workers experience several quarters for which earnings are depressed relative to comparison group workers after entering WIA, and although their earnings ultimately match or overtake the comparison group, the benefits they obtain are smaller than for those in the Adult program.nonexperimental program evaluation, workforce investment act

A taxonomy of supply chain innovations

In this paper, a taxonomy of supply chain and logistics innovations was developed and presented. The taxonomy was based on an extensive literature survey of both theoretical research and case studies. The primary goals are to provide guidelines for choosing the most appropriate innovations for a company, and help companies in positioning themselves in the supply of chain innovations landscape. To this end, the three dimensions of supply chain innovations, namely the goals, supply chain attributes, and innovation attributes were identified and classified. The taxonomy allows for the efficient representation of critical supply chain innovations information, and serves the mentioned goals, which are fundamental to companies in a multitude of industries

Coping with production time variability via dynamic lead-time quotation

In this paper, we propose two dynamic lead-time quotation policies in an M/GI/1 type make-to-stock queueing system serving lead-time sensitive customers with a single type of product. Incorporating non-exponential service times in an exact method for make-to-stock queues is usually deemed difficult. Our analysis of the proposed policies is exact and requires the numerical inversion of the Laplace transform of the sojourn time of an order to be placed. The first policy assures that the long-run probability of delivering the product within the quoted lead-time is the same for all backlogged customers. The second policy is a refinement of the first which improves the profitability if customers are oversensitive to even short delays in delivery. Numerical results show that both policies perform close to the optimal policy that was characterized only for exponential service times. The new insight gained is that the worsening impact of the production time variability, which is felt significantly in systems accepting all customers by quoting zero lead times, decreases when dynamic lead-time quotation policies are employed

New Estimates of Public Employment and Training Program Net Impacts: A Nonexperimental Evaluation of the Workforce Investment Act Program

This paper presents nonexperimental net impact estimates for the Adult and Dislocated Worker programs under the Workforce Investment Act (WIA), the primary federal job training program in the U.S. The key measure of interest is the difference in average quarterly earnings or employment attributable to WIA program participation for those who participate, estimated for up to four years following entry into the program. These estimates of WIA program impact are based on administrative data from 12 states, covering approximately 160,000 WIA participants and nearly 3 million comparison group members. Propensity score matching methods are used to compare WIA program participants with comparison groups of individuals who are observationally equivalent across a range of demographic characteristics, social welfare benefit receipt, geographic area, and prior labor market experiences but who either did not receive WIA services or did not receive WIA training. The results for the average participant in the WIA Adult program show that participating is associated with a several-hundred-dollar increase in quarterly earnings. The marginal benefits of training may exceed $400 in earnings each quarter three years after program entry. Dislocated Worker program participants experience smaller benefits than for those in the Adult program. Although it is not possible to rule out the possibility that some of our estimates may be influenced by systematic selection, we undertake a variety of robustness tests suggesting that the general pattern of the results almost surely reflects actual program impacts on individual participants

Adjuvant radiotherapy in the management of porocarcinoma with lymphatic micrometastasis

Background. Porocarcinoma is a rare skin tumor originating from dermal sweat glands. Surgical procedures are the first choice of treatment, but the role of adjuvant therapies, such as chemotherapy and radiotherapy (RT), is not clear. In this case report and review of the literature, we aimed to present a patient who underwent adjuvant RT for the diagnosis of porocarcinoma with lymphatic micrometastasis and a review of the current literature.  Case summary. A 61-year-old male was admitted to the dermatology department for a nodular lesion on the left knee skin. An excisional biopsy was performed, and the pathology result was reported as porocarcinoma. The closest surgical margin of the tumor was 0.2 cm. In the inguinal sentinel lymph node sampling, two of the three removed lymph nodes had micrometastases. Then, adjuvant RT was applied to the left inguinofemoral lymphatics and primary tumor bed. No recurrence was observed in the patient with a follow-up period of 24 months. No acute or late toxicity was observed including lymphedema, subcutaneous fibrosis, or stiffness of the knee joint. Conclusions. Although adjuvant RT is not a routinely recommended treatment, it can be applied to increase local and regional control in patients with high-risk factors for recurrence or with lymph node metastases. There is a great need for clinical studies clarifying the role of RT, but for now, all patients should undergo multidisciplinary evaluation when a decision on adjuvant therapies is made