How Changes in Social Security Affect Retirement Trends

For married men, we find the conventional view of retirement trends -- that the long term trend to early retirement has been reversed -- is partially contradicted by recent data. Specifically, descriptive data collected from both the Census and the Health and Retirement Study (HRS) suggest that for those in their fifties, over the periods 1992 to 1998 and 1998 to 2004, the trend to early retirement reasserted itself and labor force participation fell. In contrast, for those in their sixties, there was an increase in work. Similarly, for those 65 and over, the amount of work increased. Simulations with a structural retirement model suggest that the recent acceleration of the trend to early retirement for those in their fifties is not the result of the change in Social Security rules. According to our model, changes in Social Security rules are expected to reduce the number of those in their early sixties who are working. This suggests that forces other than changing Social Security rules account for the observed increase in work by those in their early sixties, and that the effects of these forces are stronger than those suggested by the trends in descriptive data. Lastly, the analysis suggests that changing Social Security rules do help to explain the increase in work by those age 65 and older. The effects of these rule changes encourage workers to remain in their long term jobs for a longer time, encourage some to return from retirement to full time work, and encourage more partial retirement. Nevertheless, the changes in retirement induced by Social Security changes have been modest. Due to Social Security changes, the number of 65 year old married men at work increases by about two percentage points at ages 65 and 66, with slightly smaller changes at 67 to 69. Given the low basic labor force participation at 65 and 66, with 20 to 25 percent at full time work, and another 17 percent at part time work, the percentage increases in work due to Social Security changes are three or four times higher.

Financial Risk, Retirement, Saving and Investment

This paper considers the prospects for adding choice of portfolio composition to a life cycle model of retirement and saving, while preserving the ability of the model to continue to explain the course of saving and retirement. If eventually successful, such a modification might be used to improve understanding of retirement and saving behavior both under the current Social Security system, and under variations involving personal accounts. In particular we consider the implications of separating parameters that now reflect both risk aversion and time preference. We explore a number of barriers to developing a specification that is consistent with observed saving, retirement and investment choices. In our previous model with exponential consumption, individuals would hold portfolios exclusively in stocks, contrary to observation. Changing the exponent of consumption can reduce stock holdings below 100%, but at the cost of implausible retirement behavior. Introducing a separate parameter for risk aversion can restore plausible retirement behavior, but the pattern of stock holdings is too high, especially at younger ages, for plausible values of the risk aversion parameter. At the moment, no easy solution is at hand to this fundamental problem now being engaged by financial economists. This suggests that models of retirement and saving may, for the immediate future, be forced to constrain portfolio composition to correspond with levels observed in the data, postponing the inclusion of portfolio mix as a choice variable until further progress is made in modeling that behavior. This does not necessarily reduce the efficiency of life cycle models of retirement and saving. Rather it recognizes that portfolio choice may be influenced by behavior that is not fully consistent with that posed by a life cycle model. Individuals may, for example, be accepting recommendations from planners or firms that they would not otherwise follow if they fully understood how to balance risk and return in portfolio choice in the same way they balance risk and return in their saving and retirement decisions. If these behavioral considerations govern their portfolio choice, while retirement and saving are determined by life cycle considerations, a model that correctly constrains portfolio composition may in fact generate parameter estimates that accurately reflect the forces governing retirement and saving behavior.

Comparison of satellite-derived dynamical quantities for the stratosphere of the Southern Hemisphere

As part of the international Middle Atmosphere Program (MAP), a project was instituted to study the dynamics of the Middle Atmosphere in the Southern Hemisphere (MASH). A pre-MASH workshop was held with two aims: comparison of Southern Hemisphere dynamical quantities derived from various archives of satellite data; and assessing the impact of different base-level height information on such derived quantities. The dynamical quantities examined included geopotential height, zonal wind, potential vorticity, eddy heat and momentum fluxes, and Eliassen-Palm fluxes. It was found that while there was usually qualitative agreement between the different sets of fields, substantial quantitative differences were evident, particularly in high latitudes. The fidelity of the base-level analysis was found to be of prime importance in calculating derived quantities - especially the Eliassen-Palm flux divergence and potential vorticity. Improvements in base-level analyses are recommended. In particular, quality controls should be introduced to remove spurious localized features from analyses, and information from all Antarctic radiosondes should be utilized where possible. Caution in drawing quantitative inferences from satellite data for the middle atmosphere of the Southern Hemisphere is advised

A Simple Test of the Shirking Model

Although popular in some circles, efficiency wage models of the labour market have proved surprisingly difficult to test and direct evidence for the central tenets of the theory is rare to non-existent. In this paper we propose a simple test of the Shapiro-Stiglitz shirking model which is based on the following idea. In the traditional search model the distribution of accepted wages should be truncated below by the reservation wage. But, if shirking is important then the employer will never want to employ a worker at their reservation wage and the distribution of accepted wages should be truncated below by the reservation wage plus something. That something is a measure of the importance of shirking. We test this prediction using data from the UK Survey of Incomes In and Out of Work. The results are not particularly supportive of the shirking model.

Comparison of satellite derived dynamical quantities in the stratosphere of the Southern Hemisphere

The proceedings are summarized from a pre-MASH planning workshop on the intercomparison of Southern Hemisphere observations, analyses and derived dynamical quantities held in Williamsburg, Virginia during April 1986. The aims of this workshop were primarily twofold: (1) comparison of Southern Hemisphere dynamical quantities derived from various satellite data archives (e.g., from limb scanners and nadir sounders); and (2) assessing the impact of different base-level height information on such derived quantities. These tasks are viewed as especially important in the Southern Hemisphere because of the paucity of conventional measurements. A further strong impetus for the MASH program comes from the recent discovery of the springtime ozone hold over Antarctica. Insight gained from validation studies such as the one reported here will contribute to an improved understanding of the role of meteorology in the development and evolution of the hold, in its interannual variability, and in its interhemispheric differences. The dynamical quantities examined in this workshop included geopotential height, zonal wind, potential vorticity, eddy heat and momentum fluxes, and Eliassen-Palm fluxes. The time periods and data sources constituting the MASH comparisons are summarized

Gravitational-Wave Constraints on the Progenitors of Fast Radio Bursts

The nature of fast radio bursts (FRBs) remains enigmatic. Highly energetic radio pulses of millisecond duration, FRBs are observed with dispersion measures consistent with an extragalactic source. A variety of models have been proposed to explain their origin. One popular class of theorized FRB progenitor is the coalescence of compact binaries composed of neutron stars and/or black holes. Such coalescence events are strong gravitational-wave emitters. We demonstrate that measurements made by the LIGO and Virgo gravitational-wave observatories can be leveraged to severely constrain the validity of FRB binary coalescence models. Existing measurements constrain the binary black hole rate to approximately $5\%$ of the FRB rate, and results from Advanced LIGO's O1 and O2 observing runs may place similarly strong constraints on the fraction of FRBs due to binary neutron star and neutron star--black hole progenitors.Comment: 5 pages, 2 figures, published in ApJL. Additional minor updates to match published version, updating metadat