Differential mortality, aging and social security: delaying the retirement age when educational spillovers matter

2016 ◽  
Vol 16 (3) ◽  
pp. 395-418 ◽  
Author(s):  
GILLES LE GARREC ◽  
STÉPHANE LHUISSIER
Keyword(s):  
Social Security ◽  
Population Aging ◽  
Spillover Effects ◽  
Economic Incentives ◽  
Differential Mortality ◽  
Retirement Age ◽  
Industrialized Countries ◽  
The Social ◽  
Unskilled Workers ◽  
The Postponement

AbstractTo lower the forecasted increase in the social security burden linked to population aging, delaying the legal age of retirement has been privileged throughout industrialized countries. Compared with a uniform delay, some argue that those who have entered precociously the labor market should be allowed to retire earlier. They assert that such a ‘long career’ exception is all the more justified that those unskilled workers live also less long due to heavier and potentially health-damaging jobs. In this paper, we then study macroeconomic and distributional consequences of global gain in life expectancy, with or without the postponement of the legal age of retirement and with or without a ‘long career’ exception. By considering a framework where individuals decide to acquire skills depending on economic incentives and differential mortality, we focus particularly on spillover effects possibly generated by education. We show in particular that introducing a ‘long career’ exception cannot be to the advantage of future unskilled workers unless education yields no spillover effects.

scholarly journals The social security reform process in Italy: where do we stand?

2004 ◽  
Vol 3 (2) ◽  
pp. 165-195 ◽  
Author(s):  
AGAR BRUGIAVINI ◽  
VINCENZO GALASSO
Keyword(s):  
Social Security ◽  
Pension System ◽  
Social Security System ◽  
Economic Incentives ◽  
Security System ◽  
The Political ◽  
Reform Process ◽  
Italian Population ◽  
Positive Effects ◽  
The Social

A reform process is underway in Italy. Achieving financial sustainability of the social security system has been the first objective characterizing the reforms of 1990s, but these have also introduced rules which aim at a more actuarially fair system. Indeed the social security system prevailing in Italy, financed on a PAYG basis, was, at the end of the 1980s, clearly unsustainable and also extremely unfair to some group of workers, enacting a form of perverse redistribution which is typical of ‘final salary’ defined benefit systems. It was also a system characterized by strong incentives to retire early.In this paper we briefly describe the different regimes of the Italian pension system in its recent history and focus on some aspects of the reform process taking place during the 1990s. Since economists and policy makers are still struggling to assess the results and the long-term effects of these reforms we provide both a survey of this debate and some fresh evidence on the evaluation of the policy changes. We carry out this analysis with a particular emphasis on two aspects which are relevant in the debate. On the one hand we stress the role of economic incentives and the overall fiscal implications of changing the systems as well as these incentives. On the other hand we emphasize the intergenerational considerations and the political implications of the ageing process of the Italian population. From our description it emerges that the overall design of the Italian reform is probably a good one, and yet some more steps need to be taken to speed up some of the positive effects of the reform process that, due the adverse demographic trends affecting PAYG systems as well as the political arena, could easily evaporate.

scholarly journals Raising the Social Security Entitlement Age

2016 ◽  
Vol 39 (1) ◽  
pp. 166-189 ◽  
Author(s):  
Julie Zissimopoulos ◽  
Barbara Blaylock ◽  
Dana P. Goldman ◽  
John W. Rowe
Keyword(s):  
Social Security ◽  
Old Age ◽  
Economic Capital ◽  
Public Expenditures ◽  
Retirement Age ◽  
Federal Spending ◽  
Tax Revenues ◽  
Productive Activities ◽  
The Social ◽  
Public Revenues

An aging America presents challenges but also brings social and economic capital. We quantify public revenues from, and public expenditures on, Americans aged 65 and older, the value of their unpaid, productive activities and financial gifts to family. Using microsimulation, we project the value of these activities, and government revenues and expenditures, under different scenarios of change to the Old Age and Survivors Insurance eligibility age through 2050. We find the value of unpaid productive activities and financial gifts are US$721 billion in 2010, while net (of tax revenues) spending on the 65 years and older is US$984 billion. Five-year delay in the full retirement age decreases federal spending by 10%, while 2-year delay in the early entitlement age increases it by 1.5%. The effect of 5-year delay on unpaid activities and transfers is small: US$4 billion decrease in services and US$4.5 billion increase in bequests and monetary gifts.

scholarly journals The Postretirement Well-Being of Workers With Disabilities

2018 ◽  
Vol 30 (1) ◽  
pp. 46-55 ◽  
Author(s):  
April Yanyuan Wu ◽  
Jody Schimmel Hyde
Keyword(s):  
Social Security ◽  
Older Workers ◽  
Well Being ◽  
Vulnerable Groups ◽  
Retirement Age ◽  
Social Security Administration ◽  
Retirement Benefits ◽  
The Social ◽  
Social Security Disability ◽  
Better Than

Older workers who develop significant limitations in health or functioning face declines in income and consumption and an increased likelihood of poverty in the years prior to retirement. We assess the extent to which those differences persist after reaching retirement age. We use the Health and Retirement Study (HRS) linked to Social Security Administration (SSA) records to compare the postretirement financial well-being of workers who experienced disability onset during their working years with those who did not, based on their claiming behavior for Social Security disability and retirement benefits. We find that even after full retirement age, gaps that emerged prior to retirement persist; those who experienced disability prior to retirement had lower incomes, were more likely to be in poverty, and had significantly lower wealth. Workers with disabilities who claimed Social Security Disability Insurance (DI) fared better than those who were rejected for such benefits, yet both groups were worse off than those who delayed claiming benefits until they were eligible for Social Security Old Age and Survivors Insurance (OASI) benefits. Our findings indicate that any changes to the Social Security benefit structure must be mindful of the short- and longer term implications for already-vulnerable groups of workers.

scholarly journals Social Security Reform and Personal Saving: Evidence from Brazil

2018 ◽  
Vol 10 (9) ◽  
pp. 26 ◽  
Author(s):  
Pedro Tonon Zuanazzi ◽  
Adelar Fochezatto ◽  
Marcos Vinicio Wink Junior
Keyword(s):  
Social Security ◽  
Population Aging ◽  
Treated Group ◽  
Social Security Systems ◽  
Public Servants ◽  
Constitutional Amendments ◽  
Personal Saving ◽  
The Social ◽  
Social Security Reforms ◽  
Using Data

The population aging process has caused a financial imbalance in the social security systems of countries based on pay as you go system, as is the case in Brazil. To face this challenge, the Brazilian governments have undertaken several reforms since the 1988 Constitution. Confronting the life cycle hypothesis, the aim of this paper is to estimate the causal effects of Social Security Reforms on the Likelihood of Saving in Brazil by exploring two exogenous events, the 41th (of 2003) and 47th (of 2005) Constitutional Amendments, that reduced the expectations of benefits only for public servants. Using data from the House Budget Surveys, the results of differences-in-differences models show that the reform increased in a range of 2.1 to 2.9 percentage points in the probability of saving of the treated group. The results are in line with the recent literature indicating that reforms contribute to an increase in personal savings.

scholarly journals (IN) contributory justice in the general social security regime: RGPS from the point of view of actuarial science from the point of view of income and the actuarial social security factor

2019 ◽  
pp. 135-161
Author(s):  
Matheus Carneiro Rocha ◽  
Jamille Carla Oliveira Araújo ◽  
Neuma Teixeira Dos Santos
Keyword(s):  
Social Security ◽  
Point Of View ◽  
Retirement Age ◽  
Actuarial Science ◽  
Contribution Rate ◽  
Retirement Benefits ◽  
Matlab Program ◽  
Security Regime ◽  
The Social ◽  
Very High

Issues related to public social security have generated widedebate between society and government. The average citizen cares about the fair measure between what he pays in the present and how much he will receive from retirement in the future. In view of this, this article aims to define according to the foundations of actuarial science, the fair measure between the value of contributions (payments) and the value of benefits (retirement) managed by the General Social Security Regime – RGPS as a tool of social (in)justice. The methodology used to obtain all parameters relevant to the RGPS as well as to the actuarial social security regime was the creation of situations involving men and women under specific conditions of entry into the social security system of initial age, retirement age and contribution salary and from these input data, the values of contribution and benefits were calculated through the Matlab program , where calculations were operationalized as a calculation routine. The results were segmented by gender (male or female) and income range, it was observed that social security contribution rate, the most important parameter to define the value of contributions to the RGPS, from 28% to 31% is very high in comparison with the rate calculated by actuarial science of 16% to 17% for men and 13% to 14% for women. It is concluded that for the ordinary citizen subject to the rules of the RGPS in force, the amounts of the contributions paid that reflect the retirement benefits received differ from the fair measure, calculated by actuarial science, therefore, it was not observed factors that attest that the RGPS is fair to the taxpayer and therefore to society.

Resetting Social Security

Daedalus ◽  
2015 ◽  
Vol 144 (2) ◽  
pp. 68-79 ◽  
Author(s):  
S. Jay Olshansky ◽  
Dana P. Goldman ◽  
John W. Rowe
Keyword(s):  
Social Security ◽  
Population Aging ◽  
Safety Net ◽  
Life Extension ◽  
Retirement Age ◽  
Retirement Benefits ◽  
The Poor ◽  
Unequal Access ◽  
Financial Burdens ◽  
Financial Safety Net

Social Security retirement benefits were first introduced in 1935 as a financial safety net for a large and rapidly growing older American population. The program was intended to be economically selfsustaining, but population aging and rising life expectancies threaten the program's solvency. The 1983 Social Security Amendments mandated that the full retirement age increase to 67 by the year 2027. In this essay, we present evidence demonstrating that the rate of improvement in life extension at older ages accelerated after 1983. If the 1935 ratio of working years to retired years is maintained, early and full retirement ages of 66.5 and 69.4, respectively, were justified in 2009. Additional delays in the age of eligibility beyond those currently in effect would place significant financial burdens on individuals with lower life expectancies, the poor and near-poor, and the very old, and – absent additional reform – would exacerbate existing unequal access to entitlements within the system.

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