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on Economics of Ageing |
| By: | Schellenberg, Grant; Ostrovsky, Yuri |
| Abstract: | In spite of the importance of registered pension plans (RPPs) in discussions of Canada's retirement income system, very few Canadian studies have examined the financial outcomes experienced by RPP members and RPP non-members. Using data from the Longitudinal Administrative Database (LAD), this paper compares the distributions of earnings replacement rates achieved by retired men who were or were not members of a registered pension plan (RPP) in 1991 and/or 1992. The distributions of earnings replacement rates of men who were not RPP members are far more dispersed than those of men who were RPP members. And while the average earnings replacement rates of the two groups are generally comparable, the median earnings replacement rates of RPP non-members are lower than those of RPP members as a result of asymmetry in the distributions. |
| Keywords: | Income, pensions, spending and wealth, Seniors, Work and retirement |
| Date: | 2010–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2010326e&r=age |
| By: | Dean Baker; David Rosnick |
| Abstract: | There has been a serious push in policy circles to cut Social Security benefits for near- and/or current retirees. The argument for such cuts has been based on the deficits in the federal budget; the finances of the Social Security program have been at most a secondary consideration. However, the finances of the current or near-retirees who would be affected by these cuts have also largely been ignored in this discussion. This is striking because this group has been hardest hit by the collapse of the housing bubble and the resulting plunge in stock prices. These workers had accumulated some wealth – mostly in the form of home equity – which they stood to lose as a result of the crisis. Since they are at or near retirement age, they will have little opportunity to replace their lost wealth. This paper assesses the cuts implied by three common proposals for reducing Social Security benefits: 1. Adopting a “progressive price” indexation (PPI) formula for the basic benefit structure, 2. Accelerating and extending the increase in the normal retirement age, and 3. Reducing the annual cost-of-living adjustment. It calculates the implied cut in benefits and projected income for various age groups and income quintiles of retirees and near-retirees. |
| Keywords: | social security, retirement, retirement age, |
| JEL: | H H6 H62 H63 H68 J J1 J14 J18 J3 J32 J38 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2010-16&r=age |
| By: | James Banks (Institute for Fiscal Studies and University College London); Richard Blundell (Institute for Fiscal Studies and University College London); Antoine Bozio (Institute for Fiscal Studies and UCL); Carl Emmerson (Institute for Fiscal Studies) |
| Abstract: | <p>This paper tries to assess whether or not we have any empirical evidence of links between early retirement and youth unemployment. Most economists would today dismiss the idea immediately as another version of the naïve 'lump-of-labor fallacy'. In its most basic form, this proposition holds that there is a fixed supply of jobs and that any reduction in labor supply will reduce unemployment by offering jobs to those who are looking for ones. Taken to the extreme, this view would support that the idea that a high level of employment of one group of individuals can only be at the expense of another group: if for instance were the population of a country to increase, younger individuals would be unemployed as older individuals would not 'release' enough jobs for the new entrants. The absurdity of this view in the long term is simply seen by considering the fact that the size of a country does not bear any relation to the share of population unemployed. </p> |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:10/02&r=age |
| By: | Rowena Crawford (Institute for Fiscal Studies); Carl Emmerson (Institute for Fiscal Studies); Gemma Tetlow (Institute for Fiscal Studies) |
| Abstract: | <p><p>It is well known that in the UK defined benefit pensions are more prevalent in the public sector than in the private sector. Furthermore, we find that the average value of accrual to members of both defined benefit pensions and defined contribution pensions is lower in the private sector than in the public sector. As a result of both these factors, we find that the average value of pension accrual is much higher in the public sector than in the private sector. Due to the long-running shift away from defined benefit pensions to less generous workplace defined contribution pensions in the private sector continuing between 2001 and 2005 the difference in average pension accrual between the sectors increased over this period. While on average over this period earnings in the public sector grew 3.5% faster than in the private sector, including pension accrual increases this difference by one-third to 4.7%. We simulate a plausible reform to the public sector defined benefit pensions - an increase in the normal pension age from 60 to 65 for future pension accrual of all current members. We find that, had this reform been implemented between 2001 and 2005, average growth in total remuneration over this period in the public sector would actually have been almost the same as that in the private sector. </p></p> |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:10/03&r=age |
| By: | Tabea Bucher-Koenen (Mannheim Research Institute for the Economics of Aging (MEA)) |
| Abstract: | The German population has good financial knowledge measured on the basis of three financial literacy questions. Around 85 % of the individuals comprehend the functioning of interest and inflation. And 60 % of the individuals understand the relationship of risk and diversification. Overall around 52 % of the individuals give correct answers to all three considered ques-tions of financial literacy. Bi-variate and multivariate analyses of the relation between giving three correct answers and socio-demographic characteristics reveal that higher wealth is asso-ciated with higher levels of financial literacy. Moreover, financial literacy relates to higher levels of income and education. There is a significant difference between men and women to give three correct answers. Individuals in East and West, are equally literate, when controlling for differences in income, wealth and education. A positive correlation of financial literacy and financial decision making is identified: more literate households are more likely to save privately for their old-age and at the same time households saving privately for their old-age acquire financial knowledge to improve their investment decisions. Interestingly, the possession of a state subsidised Riester contract is related to lower levels of financial literacy than the possession of other non-subsidised forms of private old-age provision. This indicates that Riester subsidies to some extent successfully encourage individuals with lower financial knowledge to save for old-age. Nevertheless, individuals in the lowest income quintile still have very low levels of private coverage despite the high subsidies. At the same time they show the lowest levels of financial literacy. |
| JEL: | D91 D12 D14 J26 |
| Date: | 2009–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:mea:meawpa:09192&r=age |
| By: | Margaret Denton; Jenny Ploeg; Joseph Tindale; Brian Hutchison; Kevin Brazil; Noori Akhtar-Danesh; Monica Quinlan; Jean Lillie; Jennifer Millen Plenderleith; Linda Boos |
| Abstract: | Previous findings on older adults’ awareness of community support services (CSSs) have been inconsistent and marred by acquiescence or over-claiming bias. To address this issue, this study used a series of 12 vignettes to describe common situations faced by older adults for which CSSs might be appropriate. In telephone interviews, 1,152 adults aged 50 years and over were read a series of vignettes and asked if they were able to identify a community organization or agency that they may turn to in that situation. They were also asked about their most important sources of information about CSSs. The findings show that, using a vignette methodology, awareness of CSSs is much lower than previously thought. The most important sources of information about CSSs included information and referral sources, the telephone book, doctors’ offices, and word of mouth. |
| Keywords: | aging, community support services, awareness, knowledge, acquiescence bias, vignette methodology |
| JEL: | I18 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:qseprr:440&r=age |