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SOCIAL SCIENCE RESEARCH NETWORK
E M P L O Y E E B E N E F I T S , C O M P E N S A T I O N
& P E N S I O N L A W
Vol. 8, No. 4: February 1, 2007
Editor: PAMELA J. PERUN
Urban Institute
PAMELA@PLANETNOW.COM
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Topic of This Issue:
Social Security
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T A B L E O F C O N T E N T S
"Financial Incentives and the Timing of Retirement: Evidence from
Switzerland"
BARBARA HANEL
University of Erlangen-Nürnberg
REGINA T. RIPHAHN
University of Erlangen-Nürnberg - Department of
Economics, Institute for the Study of Labor (IZA)
"The Adequacy of Retirement Resources Among the Soon-to-Retire,
1983-2001"
EDWARD N. WOLFF
New York University - Department of Economics, National
Bureau of Economic Research (NBER), Bard College - Levy
Economics Institute
"The Farm, the City, and the Emergence of Social Security"
THOMAS F. COOLEY
New York University - Department of Economics, National
Bureau of Economic Research (NBER)
"Net Intergenerational Transfers from an Increase in Social
Security Benefits"
GUAN GONG
University of Texas at Austin - Department of Economics
MICHAEL D. HURD
The RAND Corporation, State University of New York -
Department of Economics, National Bureau of Economic
Research (NBER)
"Social Security's Delayed Retirement Credit and the Labor Supply
of Older Men"
JONATHAN F. PINGLE
Board of Governors of the Federal Reserve
"Reactions to Social Security Retirement Reform Proposals in the
United States"
FRED W. BECKER
Affiliation Unknown
"Social Security Pensionable Ages in OECD Countries: 1949-2035"
JOHN TURNER
AARP - AARP Public Policy Institute
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"Financial Incentives and the Timing of Retirement: Evidence from
Switzerland"
IZA Discussion Paper No. 2492
Author: BARBARA HANEL
University of Erlangen-Nürnberg
Email: Barbara.Hanel@wiso.uni-erlangen.de
Auth-Page: http://ssrn.com/author=733130
Contact: REGINA T. RIPHAHN
University of Erlangen-Nürnberg - Department of
Economics, Institute for the Study of Labor (IZA)
Email: regina.riphahn@wiso.uni-erlangen.de
Auth-Page: http://ssrn.com/author=47117
Full Text: http://ssrn.com/abstract=955799
ABSTRACT: We use reforms in the Swiss public retirement system to
identify the responsiveness of retirement timing to financial
incentives. A permanent reduction of retirement benefits by 3.4
percent induces more than 70 percent of females to postpone their
retirement. The responsiveness of male workers, who undergo a
different treatment, is lower.
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"The Adequacy of Retirement Resources Among the Soon-to-Retire,
1983-2001"
Levy Economics Institute Working Paper No. 472
Contact: EDWARD N. WOLFF
New York University - Department of Economics,
National Bureau of Economic Research (NBER), Bard
College - Levy Economics Institute
Email: edward.wolff@nyu.edu
Auth-Page: http://ssrn.com/author=46052
Full Text: http://ssrn.com/abstract=925701
ABSTRACT: A central issue confronting soon-to-retire workers
(i.e., those aged 47-64) is whether they will have command
over enough resources (both private and public) to maintain a
decent standard of living in retirement. Typically, the adequacy
of projected retirement income is judged in relation to some
absolute standard (e.g., poverty threshold) and preretirement
income ("replacement rate"). Using data from the Federal Reserve
Board's Survey of Consumer Finances for 1983, 1989, and 2001, I
find that expected retirement income grew robustly from 1989 to
2001 (by 38 percent in real terms) and the share with expected
retirement income less than twice the poverty line fell by 5
percentage points. The percentage-point decline was even greater
for minority households (11.6) and single females (5.7). The
change in the share with replacement rates over 50 percent was
4.5 percentage points, though in this case much lower for
minorities (0.9 percentage points) and single females (1.8
percentage points). However, percentage point changes for
minorities and single females were much smaller, at 75 percent
and a 100 percent replacement rates, respectively. Moreover,
retirement wealth is very unevenly distributed. Whites and
married couples had substantially larger wealth accumulations
than their respective counterparts.
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"The Farm, the City, and the Emergence of Social Security"
NBER Working Paper No. W12854
Author: THOMAS F. COOLEY
New York University - Department of Economics,
National Bureau of Economic Research (NBER)
Email: tcooley@stern.nyu.edu
Auth-Page: http://ssrn.com/author=17456
Full Text: http://ssrn.com/abstract=959130
ABSTRACT: During the period from 1880 to 1950, publicly managed
retirement security programs became an important part of the
social fabric in most advanced economies. In this paper we study
the social, demographic and economic origins of social security.
We describe a model economy in which demographics, technology,
and social security are linked together. We study an economy with
two locations (sectors), the farm (agricultural) and the city
(industrial). The decision to migrate from rural to urban
locations is endogenous and linked to productivity differences
between the two locations and survival probabilities.
Furthermore, the level of social security is determined by
majority voting. We show that a calibrated version of this
economy is consistent with the historical transformation in the
United States. Initially a majority of voters live on the farm
and do not want to implement social security. Once a majority of
the voters move to the city, the median voter prefers a positive
social security tax, and social security emerges.
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"Net Intergenerational Transfers from an Increase in Social
Security Benefits"
Levy Economics Institute Working Paper No. 482
Contact: GUAN GONG
University of Texas at Austin - Department of
Economics
Email: ggong@eco.utexas.edu
Auth-Page: http://ssrn.com/author=371393
Co-Author: MICHAEL D. HURD
The RAND Corporation, State University of New York
- Department of Economics, National Bureau of
Economic Research (NBER)
Email: mhurd@RAND.ORG
Auth-Page: http://ssrn.com/author=158591
Full Text: http://ssrn.com/abstract=948488
ABSTRACT: When the age of death is uncertain, individuals will
leave bequests - even if they have no desired bequests - simply
because they will hold wealth against the possibility of living
longer. Bequests are accidental. Starting from a baseline level
of Social Security benefits, an increase in benefits will cause
consumption to increase. However, consumption may not increase by
as much as the increase in Social Security, which would cause
wealth to be greater than under the baseline scenario. The higher
wealth levels would translate into greater bequests. Therefore,
an increase in Social Security benefits may not be a complete
transfer from the younger generation to the older generation:
some of the increase in benefits may be bequeathed back to the
younger generation. Whether this happens depends on the form of
the utility function, the amount of bequeathable wealth, and
whether there is a bequest motive. The objective of this paper is
to quantify for single persons how much of an increase in Social
Security benefits would be bequeathed back to the younger
generation. We find that, at least for singles, increases in
Social Security benefits are unlikely to be offset by bequests.
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"Social Security's Delayed Retirement Credit and the Labor Supply
of Older Men"
FEDS Working Paper No. 2006-37
Contact: JONATHAN F. PINGLE
Board of Governors of the Federal Reserve
Email: Jonathan.F.Pingle@frb.gov
Auth-Page: http://ssrn.com/author=360676
Full Text: http://ssrn.com/abstract=951209
ABSTRACT: This paper presents estimates of the impact of Social
Security's Delayed Retirement Credit on the employment rates of
older men. The credit raises lifetime social security benefit
payments for recipients who delay receiving benefits after age 65
and offers a rare and important test of whether labor supply
incentives built in to the program can promote work at older
ages. The results suggest that the increased incentives raised
employment among workers over age 65. In addition, the recent
increases in social security's Normal Retirement Age also appear
to be pushing up labor supply.
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"Reactions to Social Security Retirement Reform Proposals in the
United States"
International Social Security Review, Vol. 60, No. 1, pp.
101-114, January-March 2007
Contact: FRED W. BECKER
Affiliation Unknown
Auth-Page: http://ssrn.com/author=732667
Full Text: http://ssrn.com/abstract=955564
ABSTRACT: For some time the actuarial imbalance between revenues
and benefit payments in the Social Security retirement program in
the United States has been a concern for decision makers,
professional analysts, and the public. In response to this
actuarial imbalance, President George W. Bush proposed in 2004
that changes be made in the method whereby Social Security
benefits are determined and that individual investment accounts
be established under the rubric of Social Security. The debate
over the issue was intense, but it was effectively stilled by the
middle of 2005. The probable legacy of the 2004-05 debate is that
limits have been placed upon future options to deal with the
Social Security program's financial difficulties. This article
identifies those constraints which, together, constitute the new
public policy template for future debates relating to the Social
Security retirement program in the United States.
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"Social Security Pensionable Ages in OECD Countries: 1949-2035"
International Social Security Review, Vol. 60, No. 1, pp.
81-99, January-March 2007
Contact: JOHN TURNER
AARP - AARP Public Policy Institute
Email: JTurner@aarp.org
Auth-Page: http://ssrn.com/author=369682
Full Text: http://ssrn.com/abstract=955563
ABSTRACT: This paper examines the pensionable or early retirement
age in social security in 23 OECD countries over the years
1949-2035. The policies for future years are those in current
law, with some not being fully effective until 2035. The paper
documents a pattern of decreasing pensionable ages that reversed
in the 1990s, with many countries raising pensionable ages since
the beginning of that decade, though generally with future
effective dates. Pensionable-age policy provides insight into
broader issues in social policy, such as whether social policies
across countries have converged over time. The paper also
examines the time pattern in the movement toward gender equality
in social programmes.
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