The portfolio effect of pension reforms: evidence from Italy

2010 ◽  
Vol 10 (1) ◽  
pp. 75-97 ◽  
Author(s):  
RENATA BOTTAZZI ◽  
TULLIO JAPPELLI ◽  
MARIO PADULA
Keyword(s):  
Real Estate ◽  
Social Security ◽  
Household Income ◽  
Pension Reforms ◽  
Italian Survey ◽  
Social Security Wealth ◽  
Portfolio Effect ◽  
Pension Benefits ◽  
Social Security Benefits

AbstractWe estimate the portfolio effect of changes in social security wealth exploiting a decade of Italian pension reforms. The Italian Survey of Household Income and Wealth records detailed portfolio data and elicits expectations of retirement outcomes, thus allowing us to measure expected social security wealth and assess to what extent Italian households perceive the innovations brought about by the reforms. We find that households have responded to cuts in pension benefits mostly by increasing real estate wealth, and that this response is stronger among households able more accurately to estimate future social security benefits. We also compute that for the average household consumable wealth increases by 40 percent of the reduction in social security wealth.

scholarly journals Mismeasurement of pensions before and after retirement: the mystery of the disappearing pensions with implications for the importance of Social Security as a source of retirement support

2013 ◽  
Vol 13 (1) ◽  
pp. 1-26 ◽  
Author(s):  
ALAN L. GUSTMAN ◽  
THOMAS L. STEINMEIER ◽  
NAHID TABATABAI
Keyword(s):  
Social Security ◽  
Pension Plans ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Bottom Line ◽  
Pension Income ◽  
Before And After ◽  
Social Security Wealth ◽  
Pension Benefits ◽  
Pension Wealth

AbstractA review of the literature suggests that when pension values are measured by the wealth equivalent of promised defined benefit pension benefits and defined contribution balances for those approaching retirement, pensions account for more support in retirement than is suggested when their contribution is measured by incomes received directly from pension plans by those who have already retired. Estimates from the Health and Retirement Study for respondents in their early fifties suggest that pension wealth is about 82% as valuable as Social Security wealth. In data from the Current Population Survey (CPS), for members of the same cohort, measured when they are 65–69, pension incomes are about 58% as valuable as incomes from Social Security. Our empirical analysis uses data from the HRS to examine the reasons for these differences in the contributions of pensions as measured in income and wealth data. Key factors accounting for these differences include: a difference in methodology between surveys affecting what is included in pension income; some pension wealth ‘disappears’ at retirement because respondents change their pension into other forms that are not counted as pension income; and the form of annuitization may influence the measure of pension income. A series of caveats notwithstanding, the bottom line is that CPS data on pension incomes received in retirement understates the full contribution pensions make to supporting retirees.

scholarly journals THE ENDOGENOUS DETERMINATION OF RETIREMENT AGE AND SOCIAL SECURITY BENEFITS

2012 ◽  
Vol 18 (1) ◽  
pp. 93-113 ◽  
Author(s):  
Francisco Cabo ◽  
Ana García-González
Keyword(s):  
Social Security ◽  
Public Debt ◽  
Nonlinear Dependence ◽  
Retirement Age ◽  
The Public ◽  
Long Run ◽  
The Government ◽  
Pension Benefits ◽  
Social Security Benefits

An aging population in modern societies has put stress on public pension systems. To prevent social security deficits from increasing to unbounded levels of public debt we focus on two policies: reducing the generosity of pension benefits, determined by the government, and postponing the effective retirement age, chosen by employees. An atomistic employee would disregard the effect of his retirement decision on the public debt and would retire as soon as possible. Conversely, an ideal farsighted agency considering all current and future employees would postpone retirement, thereby alleviating the pressure on public debt and allowing a more generous long-run pension. The government may design a proper incentive strategy to induce myopic atomistic decision makers to act nonmyopically. This strategy is a two-part incentive with nonlinear dependence on the stock of public debt. It is credible if deceiving employees slightly adjust their retirement-age decisions to increments in the public debt.

scholarly journals Deciding When To Initiate Social Security Benefits

2010 ◽  
Vol 8 (4) ◽  
Author(s):  
Allen Atkins ◽  
Craig Bain
Keyword(s):  
Social Security ◽  
Married Couple ◽  
Font Size ◽  
Real Rate ◽  
Trade Offs ◽  
Investment Returns ◽  
Long Time ◽  
Social Security Wealth ◽  
The Government ◽  
Social Security Benefits

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="color: black; font-size: 10pt; mso-themecolor: text1;"><span style="font-family: Times New Roman;">People nearing retirement face a well-known decision: When should to begin taking social security benefits? The answer may not seem obvious since there are key trade-offs involved. The retiree can choose low benefits for a longer period of time, or high benefits for a shorter period of time, or something in between.<span style="mso-spacerun: yes;">&nbsp; </span>The optimal initiation date that maximizes social security wealth is a quantitative question and it depends on the life expectancy of the person and on the real rate of return they expect to earn on their investments, among other things. We attempt to provide some answers to this practical and important question.<span style="mso-spacerun: yes;">&nbsp; </span>Our focus throughout is on relatively high-wealth individuals who will receive the maximum social security benefits.<span style="mso-spacerun: yes;">&nbsp; </span>We show how the government&rsquo;s social security benefit calculator can be very misleading. We also include how the decision may be different for a married couple.<span style="mso-spacerun: yes;">&nbsp; </span>We conclude with the following rough guideline.<span style="mso-spacerun: yes;">&nbsp; </span>If you expect to make a good return on your investments, you should take the benefits early (i.e. at age 62).<span style="mso-spacerun: yes;">&nbsp; </span>If you expect to make modest investment returns and you expect to live a long time, you should take the benefits later, (i.e. at age 70).</span></span></p>

Precarious Retirement for Ageing Albanian (Return) Migrants

Südosteuropa ◽  
2019 ◽  
Vol 67 (2) ◽  
pp. 211-233
Author(s):  
Veronika Duci ◽  
Elona Dhembo ◽  
Zana Vathi
Keyword(s):  
Financial Crisis ◽  
Social Security ◽  
Host Country ◽  
Return Migration ◽  
Social Security System ◽  
Security System ◽  
Policy Level ◽  
Legal Frameworks ◽  
Pension Benefits ◽  
Social Security Benefits

Abstract Return migration and pension benefits are crucial for ageing migrants whose migration project takes a significant turn due to circumstances in the receiving country. A significant number of migrants have recently returned to Albania from Greece due to the financial crisis and are struggling to start a new life. A number of those remaining in Greece wish to retire upon return to Albania, or prefer to remain in Greece if they manage to retire there. Problems arise because of the lack of portability of social security benefits from Greece to Albania. This article looks at the policy and legal frameworks of migration and the national social security system, aiming to identify the existing gaps in the policy and legislative configurations of the two countries. It appears that significant policy inconsistencies and gaps have serious implications for ageing returned migrants and also for those remaining in the host country (Greece), indicating an urgent need to address these difficulties at a transnational policy level.

scholarly journals The contribution of changes to tax and social security to stalled life expectancy trends in Scotland: a modelling study

2020 ◽  
pp. jech-2020-214770
Author(s):  
Elizabeth Richardson ◽  
Martin Taulbut ◽  
Mark Robinson ◽  
Andrew Pulford ◽  
Gerry McCartney
Keyword(s):  
Life Expectancy ◽  
Social Security ◽  
Tax Credits ◽  
The Difference ◽  
Group Sex ◽  
The Uk ◽  
Social Security Benefits ◽  
The Impact ◽  
Welfare Reforms ◽  
Detrimental Impact

BackgroundLife expectancy (LE) improvements have stalled, and UK tax and welfare ‘reforms’ have been proposed as a cause. We estimated the effects of tax and welfare reforms from 2010/2011 to 2021/2022 on LE and inequalities in LE in Scotland.MethodsWe applied a published estimate of the cumulative income impact of the reforms to the households within Scottish Index of Multiple Deprivation (SIMD) quintiles. We estimated the impact on LE by applying a rate ratio for the impact of income on mortality rates (by age group, sex and SIMD quintile) and calculating the difference between inflation-only changes in benefits and the reforms.ResultsWe estimated that changes to household income resulting from the reforms would result in an additional 1041 (+3.7%) female deaths and 1013 (+3.8%) male deaths. These deaths represent an estimated reduction of female LE from 81.6 years to 81.2 years (−20 weeks), and male LE from 77.6 years to 77.2 years (−23 weeks). Cuts to benefits and tax credits were modelled to have the most detrimental impact on LE, and these were estimated to be most severe in the most deprived areas. The modelled impact on inequalities in LE was widening of the gap between the most and least deprived 20% of areas by a further 21 weeks for females and 23 weeks for males.InterpretationThis study provides further evidence that austerity, in the form of cuts to social security benefits, is likely to be an important cause of stalled LE across the UK.

Sign in / Sign up

Export Citation Format

Share Document