Individual savings accounts for social insurance: rationale and alternative designs

Using Danish data, we find that about three-fourths of the taxes levied to finance public transfers actually finance benefits that redistribute income over the life cycle of individual taxpayers rather than redistribute resources across people. This finding and similar results for other countries provide a rationale for financing part of social insurance via mandatory individual savings accounts. We discuss the advantages and disadvantages of mandatory individual savings accounts for social insurance and survey some recent alternative proposals for such accounts.      

Optimal retirement with unemployment risks

This paper investigates the optimal retirement of an individual in the presence of involuntary unemployment risks and borrowing constraints in a complete market with frictions. We use an intensity model and loading factors to illustrate the involuntary unemployment risks and frictions in unemployment insurance markets. Using reasonably calibrated parameters, we observe that high involuntary unemployment intensity and loading factors could be important explanations for the empirical findings emphasized in recent studies. We also find that an individual with high leisure demand after retirement reduces consumption during retirement and increases stockholdings as retirement time approaches.     

Private retirement savings and mandatory annuitization

The present paper studies the growth, welfare, and efficiency consequences of tax-favored retirement accounts in a general equilibrium overlapping generations model with idiosyncratic lifespan and labor income uncertainty. We focus on the implicit differential taxation of savings motives and the mandatory annuitization of withdrawals after retirement. The simulations performed for the German economy indicate that the differential taxation of savings motives has only modest efficiency effects but especially low-income households benefit. On the other hand, mandatory annuitization improves overall economic efficiency significantly by about 0.4% of aggregate resources, but future generations are hurt due to intergenerational income effects from reduced accidental bequest.     

Unemployment insurance in a three-state model of the labor market

The paper extends the model of Krusell et al. (2010) to study the welfare effects of unemployment insurance. The model unemployment insurance program includes four realistic features: 1) a 50% replacement rate up to a benefit cap; 2) finite duration of eligibility during a jobless spell; 3) limited eligibility; and 4) and an imperfectly monitored job search requirement. The model is parameterized to fit the size of scope of unemployment insurance in the United States. Removing unemployment insurance from the model leads to only a 0.1% consumption equivalent increase in average welfare. Simplifying assumptions about the structure of unemployment insurance, such as allowing all job losers to receive benefits, lead to much larger welfare effects similar to the effects found in the past literature. Understanding the welfare effects of unemployment insurance requires careful modeling of the structure of the program.     

An analysis of the Medical Savings Account as an alternative retirement savings Vehicle

Personal savings as a percentage of disposable income have dropped steadily since the early 1980s. Savings have continued to decline in 1999, as the savings rate—savings as a percentage of after-tax income—dropped to a record low of minus 0.7% in April 1999, according to the Department of Commerce. The study finds that MSA-type accounts are a viable supplement to retirement savings, but should not be used as a replacement for existing retirement alternatives given their current structure. Results show that future health care expenditures are an important factor in the success or failure of MSAs as supplemental retirement accounts. Medical Savings Accounts are currently eligible for long-term care expenses, and to the extent that such expenses occur during retirement, MSA balances could be used to pay for retirement expenses. In that respect the accounts already capture the characteristics of a retirement savings account. A comparison of the Roth IRA with the MSA as defined by the 1996 HIPAA legislation is also conducted.     

亚洲社会保障最低标准：基本项目及实施路径

建立亚洲社会保障最低标准,是推动亚洲社会福利水平提高的重要途径。以人类基本需求为出发点结合亚洲发展现状,这一标准至少应包括社会救助、老年和遗属年金、医疗保险、工伤保险以及失业保险几大基本项目。通过制定有效措施,分步骤、分层次地推动社会保障覆盖面的扩大是需要优先解决的问题。这既需要政府作为首要责任主体加以引导和支持,以及非政府组织和私营部门的监督和共同努力,也应加强国家和地区之间的交流与合作。     

中国失业保险制度改革方向:纳入社会救助——基于历史背景与功能定位的分析

失业保险在建立和长期发展过程中,具有缓和劳资矛盾、天然双向平滑经济波动、提供失业保障和平滑个人收入的基本功能。但随着各国劳动保护及福利制度的发展,失业保险在政治和经济方面的功能减弱,且其失业收入损失补偿功能常常引发失业陷阱,于是各国进行了以促进积极就业为导向的改革。中国失业保险制度曾经为经济体制转型起到了“减震器”的作用。随着劳动保护和社会保障制度的发展和政府就业政策的完善,在二元就业结构、户籍制度、公共部门人力资源管理制度及政府承担就业促进任务的影响下,我国失业保险的政治、经济、失业人口收入补偿、就业促进功能未能有效发挥。在比较了若干改革方案后,本文认为,取消失业保险并将其功能并入社会救助体系是新时代背景下我国失业保险制度的最优改革路径。     

社会资本与中国农村养老保险——基于CHIPS数据的实证研究

党的十八大以来,习近平总书记多次发表重要论述,阐明自己的"民生观",指出中国养老问题的重要性。改革开放以来,中国经济、社会、政治都发生了巨大变化。福利一词也越来越多为人所谈论。本文以农村养老保险为切入口,研究社会资本、党员身份与农村养老保险的参与程度、知情程度、未来参与意愿之间的关系,从一个侧面反映中国农村的福利情况。通过文献综述,提出了六个假设。根据中国家庭收入调查(CHIPS)数据,建立Logistic回归模型,发现社会资本对是否参加农村养老保险、是否知道个人账户有多少钱、将来是否加入农村养老保险都有积极作用;党员身份与是否参加农村养老保险、是否知道自己的个人账户有多少钱、将来是否可能参加无关。结果表明,提高村民的社会资本,加强他们的社会交往有助于他们获取信息,改善福利,所以可以提高村民小组活动和村民大会的频率以增加农民的社会资本。     

Unemployment insurance and incentives

In this paper we present a partial economic equilibrium model of the labor market in which we maximize the workers' expected discounted utility level, while implying a zero expected profit for the firms. The model we use for the labor market takes into consideration transitions between the various states of employment and the time periods spent in each state. The probability distribution of these time periods may be arbitrary, not restricted to being exponential, as is the case for ordinary time-continuous Markov processes. The basic principles and difficulties arising from monitoring problems and moral hazard are discussed. In order to analyze unemployment insurance schemes that include incentives for workers to avoid unemployment, we depart from the simplest form of the principle of equivalence in insurance. Several different alternatives are discussed, all giving rise to partial insurance and thus incentives. We also analyze the effects that early retirement have on unemployment. Here, we include social security benefits in the economic model. Finally, we show that the optimal solutions entail quantity rationing.     

How important is intra-household risk sharing for savings and labor supply?

While it is recognized that the family is a risk-sharing institution, little is known about the quantitative effects of this source of insurance on savings and labor supply. In this paper, we present a model where workers (females and males) are subject to idiosyncratic employment risk and where capital markets are incomplete. A household is formed by a female and a male, who decide on consumption, savings and labor supplies. In a calibrated version of our model we find that intra-household risk sharing has its largest impact among wealth-poor households. While the wealth-rich use mainly savings to smooth consumption across unemployment spells, wealth-poor households rely on spousal labor supply. For instance, for low-wealth households, average hours worked by wives of unemployed husbands are 8% higher than those worked by wives of employed husbands. This response in wives’ hours makes up 9% of lost family income. We also study consumption losses upon an unemployment spell, precautionary savings and the crowding out effects of the public unemployment insurance program on the extent of risk sharing within the household.     

Exploring the future for pensions pillarisation

The pensions pillarisation agenda envisages a reduction in the role of social insurance while simultaneously advocating the parallel expansion of fully funded private sector, occupational and personal retirement contingencies. Widespread perception of looming state failure in the field of pensions delivery highlights the inherent limitations of current pension delivery arrangements. However, moves to de-emphasise the provision afforded by, predominantly, monopillar state-mandated pension systems by expanding private privision represent short-term palliative responses to deep rooted structural and demographic problems. Multipillar systems appear no more capable of guaranteeing system funding in the face of demographic ageing and structural unemployment than existing monopillar systems. Moreover, a diminished role for social insurance will leave the low paid and unemployed significantly more vulnerable in old age. Consequently, this paper argues for a pension reform agenda which, in terms of levels of income substitution, will secure an adequate social insurance element into the future.     

养老金替代率对私人储蓄的影响：一个理论模型

在养老保险制度中,养老金替代率是一个非常重要的参数。养老金替代率不仅决定退休者的养老保障水平以及基金的收支平衡,而且对私人储蓄也产生一定的影响。在经济达到竞争均衡的条件下,养老金替代率与私人储蓄之间存在负相关关系,即养老金替代率的提高将引起资本存量的下降。因此,为保持合理的资本存量,就应该使养老金替代率保持适度的水平。     

Employment and Welfare Effects of a Two-Tier Unemployment Compensation System

In Germany, as in many OECD countries, such as the United Kingdom, unemployment compensation consists of unemployment insurance and unemployment assistance. Unemployment assistance is provided subsequent to the expiration of entitlement to unemployment insurance and is lower. The effects of this two-tier unemployment compensation system are studied in a general equilibrium job search model with endogenous distributions of income, wealth, and employment which is calibrated with regard to the characteristics of the German economy. Our results are as follows: (i) employment is a decreasing function of both unemployment insurance and unemployment assistance. (ii) Aggregate savings are (not) a monotone decreasing function of unemployment assistance (unemployment insurance) payments. (iii) Optimal unemployment compensation payments are found to be a decreasing function over time.     

个人保险、消费和储蓄决策

本文通过失业保险,研究了家庭保险、消费和储蓄的决策问题。在连续时间情形下,本文将随机问题转化为确定性问题来考察,运用最优控制理论,考察了家庭的决策过程。分析了购买保险对于个人消费和储蓄决策的影响,以及如何通过保险稳定其财富和提高终生效用,同时探讨了人均消费和人均资本存量的动态变化过程,得到了关于经济增长路径的结论。     

Extending financial literacy to insurance literacy: a survey approach

We extend behavioural research in investment and retirement savings to insurance, by investigating factors that may influence individuals’ insurance decision making. These factors include financial literacy, specialist insurance education and some behavioural biases. Based on a definition of insurance literacy that requires both having, and applying insurance knowledge, we find from a survey of postgraduate students that financial literacy does not necessarily translate to insurance literacy, whereas more specialised education can improve insurance literacy. Results also indicate specialist education potentially reduces susceptibility to anchoring effects.     

European Pension Systems: A Simulation Analysis

Pension systems in different countries vary widely in such aspects as the dependence of benefits on earlier labour income, the minimum permitted retirement age and limits on labour supply after retirement. This paper uses a simulation model of a rational, utility-maximising household facing the detailed pension provisions of eight European countries to study microeconomic distortions induced by the different rules and regulations. We examine in particular the impact on savings, labour supply, retirement age decisions and welfare. JEL classification: H55, J26, J65.     

Do academic investment insights benefit society?

Sound investment decisions are crucial for retirement savings and the financing of education. The impact of investment mistakes on the general welfare in society can be tremendous. This paper reviews the implications of finance research for sound investment decision making and contrasts these with the evidence on actual investment practice which is infused with conflicts of interest and may damage investor welfare by promoting returns chasing, hiding bad performance and overcharging for services. The objective of this paper is to assess the current impact that academic research findings have on investment practice and social welfare, and discuss how researchers can contribute to improve the situation.     

Demographic change, social security systems, and savings

In theory, improvements in healthy life expectancy should generate increases in the average age of retirement, with little effect on savings rates. In many countries, however, retirement incentives in social security programs prevent retirement ages from keeping pace with changes in life expectancy, leading to an increased need for life-cycle savings. Analyzing a cross-country panel of macroeconomic data, we find that increased longevity raises aggregate savings rates in countries with universal pension coverage and retirement incentives, though the effect disappears in countries with pay-as-you-go systems and high replacement rates.     

Temptation and Self‐Control: Some Evidence and Applications

This paper studies the empirical relevance of temptation and self‐control using household‐level data from the Consumer Expenditure Survey. We construct an infinite‐horizon consumption‐savings model that allows, but does not require, temptation and self‐control in preferences. In the presence of temptation, a wealth–consumption ratio, in addition to consumption growth, becomes a determinant of the asset‐pricing kernel, and the importance of this additional pricing factor depends on the strength of temptation. To identify the presence of temptation, we exploit an implication of the theory that a more tempted individual should be more likely to hold commitment assets such as individual retirement account (IRA) or 401(k) accounts. Our estimation provides empirical support for temptation preferences. Based on our estimates, we explore some quantitative implications of this class of preferences for capital accumulation in a neoclassical growth model and the welfare cost of the business cycle.     

Social welfare effects of tax-benefit reform under endogenous participation and unemployment: an ordinal approach

This paper analyzes the social welfare effects of tax-benefit reforms in a framework integrating endogenous labor supply and unemployment. We adopt an ordinal approach to social welfare comparisons by searching for “socially desirable” reforms that would improve social welfare for an entire class of social welfare functions. In the model, there is a discrete distribution of individuals’ productivities and individuals are heterogeneous with respect to leisure preferences (or disability of work). Labor supply decisions are limited to the participation decision. Unemployment is modeled in a search and matching framework with individual wage bargaining. For the social welfare analysis, the model is calibrated for Switzerland. Starting from a situation with an unemployment benefit scheme, the introduction of in-work benefits is shown to be a “socially desirable” reform: it would be unanimously preferred to the current situation according to all social welfare functions based on the criteria of Pareto, anonymity, and the principle of transfers. This result holds for two different types of preference heterogeneity (leisure preferences or disability of work) and also for the case where job search effort cannot be monitored.