Trends in household saving don't justify tax incentives to boost saving

Despite diverse trends in household saving in OECD countries, many governments are introducing tax incentives designed to boost saving by particular groups. Such schemes have been justified by many trends, including increasing income inequality, ageing populations, and greater cross-border competition. It is dangerous, however, to base policy on what is happening to aggregate household saving alone. First, personal saving should be viewed within a lifecycle context. Saving may look inadequate today, but households may already have made plans to redress this in future. Second, data on aggregate saving conceal significant differences between different household groups. Only disaggregation yields reliable inferences on which policy can be based. In particular, it is impossible to assess the consequences of demographic changes without analysis that distinguishes between different generations.
We reassess household saving by computing the evolution of lifetime profiles of consumption, income and saving of different cohorts over time, and then analyse the effect of demographic and other changes. We find little evidence for the assertion that tax incentives to promote national saving are needed now to stave off a future drought in household saving.     

Regenerating Neighbourhoods: A Critical Look at the Role of Community Capacity Building

This paper offers a critical analysis of the concept of 'community capacity building' identifying two approaches to practice: the strategic and developmental. Examples of these two approaches to the practice of capacity building by Groundwork Trusts in villages in South Yorkshire and County Durham are then discussed and some conclusions drawn as to the value of each.     

Retirement in the UK

In common with other OECD countries, the UK experienced morethan two decades of declining labour-market activity among oldermen from the 1970s to the early 1990s, a trend that has onlyrecently shown signs of being reversed. Retirement decisionsare heavily shaped by institutional context and in the UK thishas led to there being two distinct groups with very different‘retirement’ experiences. At the top of the wealthdistribution, early retirement has typically been influencedby private, occupational pensions; at the bottom of the wealthdistribution individuals are even more likely to be not workingin their 50s, but do not typically define themselves as retired,and draw on income support, or more usually, disability benefits.Policy-makers keen to increase effective retirement ages willneed to consider the very different circumstances of these twogroups. Footnotes ¹ E-mail addresses: j.banks{at}ifs.org.uk; sarah.smith{at}bristol.ac.uk     

Two-sided uncertainty in the monopoly agenda setter model

We extend the Romer-Rosenthal model of representative democracy to a signaling environment, in which (i) only the representatives knows the ‘status quo’ outcome resulting if her take-it-or-leave-it policy proposal is rejected by the voters, while (ii) only the voters know their true preferences over policies. A separating sequential equilibrium is shown to exist, and to uniquely satisfy a common equilibrium refinement. Furthermore, this equilibrium has the property that, relative to the environment where the status quo is known to the voter, there is a downward bias in the setter's proposal, and an associated upward bias in the probability of the proposal's acceptance by the voter.