2006
Taxes, Wages, and the Labor Supply of Older Americans
WP 2006-139 , UM06-08
The aging of the U.S. population, combined with an increasing probability that any given older individual will work, means that the importance of older workers to the labor force is rising. One possible solution to the solvency problems facing the…
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Retirement Savings Portfolio Management
WP 2006-138 , UM06-20
We assess the welfare implications of alternative retirement plan investment options given that households may not invest according to optimal portfolio choice theory but may instead use simple decision rules. We simulate the performance of lifestyle, lifecycle, and other simple…
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Self-Assessed Retirement Outcomes: Determinants and Pathways
WP 2006-141 , UM06-14
There is increasing interest among policy makers in measuring well-being in ways that go beyond purely economic indicators, also with special focus on older individuals who constitute an increasing fraction of the population. However there is little consensus on which…
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Consumption, Retirement, and Social Security: Evaluating the Efficiency of Reform with a Life-Cycle Model
WP 2006-142 , UM05-19
This paper analyzes the effect of a potential reform to the Social Security system on individuals’ retirement and consumption choices. We first estimate the coefficients for a life—cycle model. We assume intratemporally nonseparable preference orderings and endogenous retirement. Our framework…
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Home Production by Dual Earner Couples and Consumption During Retirement
WP 2006-143 , UM06-10
To study the role of home production in life—cycle behavior, this paper creates a theoretical model in which both spouses in a couple allocate their time between market and home work. It then derives a pair of regression equations for…
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How the Distribution of After-Tax Income Changed Over the 1990s Business Cycle: A Comparison of the United States, Great Britain, Germany and Japan
WP 2006-145
We find that, over their 1990s business cycles, the entire distribution of after-tax household size-adjusted income moved to the right in the United States and Great Britain while inequality declined. In contrast, Germany and Japan had less income growth, a…
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Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education Programs
WP 2006-144 , UM06-05
Economists are beginning to investigate the causes and consequences of financial illiteracy to better understand why retirement planning is lacking and why so many households arrive close to retirement with little or no wealth. Our review reveals that many households…
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Life-Cycle Asset Allocation with Annuity Markets: Is Longevity Insurance a Good Deal?
WP 2006-146 , UM06-11
We derive the optimal portfolio choice over the life-cycle for households facing labor income, capital market, and mortality risk. In addition to stocks and bonds, households also have access to incomplete annuity markets offering a hedge against mortality risk. We…
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Crowd-out, Adverse Selection and Information in Annuity Markets: Evidence from a New Retrospective Data Set in Chile
WP 2006-147 , UM06-19
Annuitization is often considered a socially desirable payout mode from pension plans, because it provides a lifelong income stream and therefore ensures that retirees will not run out of money. However, annuitization is rare in most countries. This project examines…
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The Importance of Objective Health Measures in Predicting Early Receipt of Social Security Benefits: The Case of Fatness
WP 2006-148 , UM06-23
Theoretical models argue that poor health will contribute to early exit from the labor market and the decision to take early Social Security retirement benefits (Old-Age or OA benefits). However, most empirical estimates of the causal importance of health on…
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