nep-age 2007-06-30 papers

on Economics of Ageing

Issue of 2007‒06‒30
two papers chosen by
Claudia Villosio
LABORatorio R. Revelli

An Update on Bridge Jobs: the HRS War Babies By Michael D. Giandrea; Kevin E. Cahill; Joseph F. Quinn
The theory of life-cycle saving and investing By Zvi Bodie; Jonathan Treussard; Paul Willen

An Update on Bridge Jobs: the HRS War Babies

By:	Michael D. Giandrea (U.S. Bureau of Labor Statistics); Kevin E. Cahill (Analysis Group, Inc.); Joseph F. Quinn (Boston College)
Abstract:	Are today's youngest retirees following in the footsteps of their older peers with respect to gradual retirement? Recent evidence from the Health and Retirement Study (HRS) suggests that most older Americans with full-time career jobs later in life transitioned to another job prior to complete labor force withdrawal. This paper explores the retirement patterns of a younger cohort of individuals from the HRS known as the "War Babies." These survey respondents were born between 1942 and 1947 and were 57 to 62 years of age at the time of their fourth bi-annual HRS interview in 2004. We compare the War Babies to an older cohort of HRS respondents and find that, for the most part, the War Babies have followed the gradual-retirement trends of their slightly older predecessors. Traditional one-time, permanent retirements appear to be fading, a sign that the impact of changes in the retirement income landscape since the 1980s continues to unfold.
Keywords:	Economics of Aging, Partial Retirement, Gradual Retirement
JEL:	J26 J14 J32 H55
Date:	2007–05–30
URL:	http://d.repec.org/n?u=RePEc:boc:bocoec:670&r=age

The theory of life-cycle saving and investing

By:	Zvi Bodie; Jonathan Treussard; Paul Willen
Abstract:	How much should a family save for retirement and for the kids’ college education? How much insurance should they buy? How should they allocate their portfolio across different assets? What should a company choose as the default asset allocation for a mandatory retirement saving plan? We believe that the life-cycle model developed by economists over the last fifty years provides guidance for making such decisions. The theory teaches us to view financial assets as vehicles for transferring resources across different times and outcomes over the life cycle, and that perspective allows households and planners to think about their decisions in a logical and rigorous way. This paper lays out and illustrates the basic analytical framework from the theory in nonmathematical terms, with the aim of providing guidance to financial service providers, consumers, and policymakers.
Date:	2007
URL:	http://d.repec.org/n?u=RePEc:fip:fedbpp:07-3&r=age

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