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Book part
Publication date: 10 November 2014

Alan L. Gustman and Thomas L. Steinmeier

This paper advances the specification and estimation of econometric models of retirement and saving in two earner families. The complications introduced by the interaction…

Abstract

This paper advances the specification and estimation of econometric models of retirement and saving in two earner families. The complications introduced by the interaction of retirement decisions by husbands and wives have led researchers to adopt a number of simplifications. Our analysis relaxes these restrictions. The model includes three labor market states, full-time work, partial retirement, and full retirement; reverse flows from states of lesser to greater work; an extended choice set created when spouses make independent retirement decisions; heterogeneity in time preference; varying taste parameters for full-time and part-time work; and the possibility of changes in preferences after retirement.

Details

Factors Affecting Worker Well-being: The Impact of Change in the Labor Market
Type: Book
ISBN: 978-1-78441-150-3

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Article
Publication date: 8 March 2011

Karen M. Gibler and J. Sherwood Clements

Expectations of an aging population increases the need for accurate models and reliable forecasts of housing demand in the later stages of life. This paper aims to examine…

Abstract

Purpose

Expectations of an aging population increases the need for accurate models and reliable forecasts of housing demand in the later stages of life. This paper aims to examine whether the only published forecasting model predicts the actual movement of older Americans into retirement housing.

Design/methodology/approach

A logistic regression model is used to test which older movers chose retirement housing using data from the 2002 and 2004 Health and Retirement Survey.

Findings

Age is found to have a positive relationship with the choice to move into retirement housing, but the other socioeconomic variables are not significant and the model is not robust.

Research limitations/implications

More investigation is necessary to identify the variables that will provide a reliable estimate of those choosing retirement housing. Segmented by housing type may be necessary rather than estimating total retirement housing demand.

Originality/value

The paper tests whether a model previously used to forecast senior housing demand actually predicts housing choice. It demonstrates that additional research is needed to develop models that can more accurately estimate demand in this growing segment of the housing market in aging countries.

Details

International Journal of Housing Markets and Analysis, vol. 4 no. 1
Type: Research Article
ISSN: 1753-8270

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Article
Publication date: 6 July 2012

Pierre‐Jean Messe

The purpose of this paper is to investigate whether employers’ attitudes towards older workers, especially regarding promotions, really affect their retirement intentions…

Abstract

Purpose

The purpose of this paper is to investigate whether employers’ attitudes towards older workers, especially regarding promotions, really affect their retirement intentions, distinguishing between men and women.

Design/methodology/approach

First, the author uses the 1992 wave of the Health and Retirement Study to estimate, through a Fields decomposition, the relative contribution of the feeling of an older worker to be discriminated against regarding promotions; and to explain the self‐reported probability to work full time after 62, decomposing by gender. Second, using the two first waves of HRS, the author removes any bias due to time‐constant unobserved heterogeneity, to test whether the individual feeling of being passed over for promotion may be misreported, owing to a strong preference for leisure. Finally, the author examines the effect of a change in this variable over time on the intentions to exit early.

Findings

The Fields decomposition shows that feeling passed over for promotion plays a non‐negligible role to predict retirement plans but only for women. In addition, using panel data allows a misreporting bias to be exhibited that may lead to underestimating of the negative effect of discriminatory practices towards older workers on their retirement plans. Lastly, an increase between 1992 and 1994 in the age‐discrimination towards older workers encouraged women to leave their job early, while it had no effect on retirement plans of men.

Practical implications

Empirical results put forward the idea that retirement intentions may differ across gender, owing to the different nature of the employer‐employee relation. While for men, this relation is characterized by delayed‐payment arrangements signed ex ante with the employer, as already shown by Adams, it is not true for women. Consequently, the age‐based preference of employers for promotion, leading to a lower probability of promotion for older workers, is treated by men as a consequence of ex ante arrangements and does not affect their retirement plans. However, women can attribute such attitudes of their employer to a kind of blatant discrimination, reducing therefore their attachment to their job.

Originality/value

The paper presents a longitudinal approach towards the determinants of retirement intentions that allows the unobserved heterogeneity constant over time to be removed and to estimate to what extent the feeling of being passed over for promotion may be attributed, for each gender, to some arrangements signed ex ante with the employer.

Details

International Journal of Manpower, vol. 33 no. 4
Type: Research Article
ISSN: 0143-7720

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Book part
Publication date: 6 August 2018

Alan L. Gustman and Thomas L. Steinmeier

A dynamic model of the evolution of health for those over the age of 50 is embedded in a structural, econometric model of retirement and saving. Effects of smoking…

Abstract

A dynamic model of the evolution of health for those over the age of 50 is embedded in a structural, econometric model of retirement and saving. Effects of smoking, obesity, alcohol consumption, depression, and other proclivities on medical conditions are analyzed, including hypertension, diabetes, cancer, lung disease, heart problems, stroke, psychiatric problems, and arthritis. Compared to a population in good health, the current health of the population reduces retirement age by about one year. Including detailed health dynamics in a retirement model does not influence estimates of the marginal effects of economic incentives on retirement.

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Article
Publication date: 15 December 2020

Kavita Karan Ingale and Ratna Achuta Paluri

Numerous exploratory, conceptual and empirical enquiries on financial behaviour and literacy have been conducted in the areas of economics, finance, business and…

Abstract

Purpose

Numerous exploratory, conceptual and empirical enquiries on financial behaviour and literacy have been conducted in the areas of economics, finance, business and management. However, no attempt was made to present a comprehensive science mapping of the area so far. Hence, the study intends to elicit the trend in the research field through synthesis of knowledge structures.

Design/methodology/approach

Bibliometric analysis in the field of financial literacy and financial behaviour was performed on a sample of 1,138 documents based on a scientific search strategy run on the Web of Science database for the period 1985–2020. Biblioshiny, which is a web-based application included in Bibliometrix package developed in R-language (Ariaa and Cuccurullo, 2017), was used for the study. With the help of automated workflow in the software, prominent journals, authors, countries, articles, themes were identified; and citation, co-citation and social network analysis were conducted.

Findings

Results show that the themes of financial literacy and financial behaviour have evolved over a period of time as an interdisciplinary field. In the initial stages, researchers focused on demographic and socio-economic determinants, but gradually the field embraced topics like behavioural and psychological constructs influencing financial behaviour. Along with conceptual structure, this research reveals the intellectual and social structure of the domain. This study provides important insights on areas that need further investigation.

Research limitations/implications

The current research is a bibliometric analysis and hence limitations related to such studies are applicable. For future researchers to derive a strong conceptual framework, a systematic review of literature would be helpful. Science mapping for this study is limited to the Web of Science database owing to its wider coverage of good quality journals, structured formats which are compatible with the Bibliometrix software.

Practical implications

The current study provides important insights on financial literacy and financial behaviour and their inter-linkages. It highlights the most addressed issues in the area and leads towards the prospective areas for research. It informs the future researchers about the emergent themes, contexts and possibilities of collaborations in this area by revealing social and intellectual structure of the domain.

Social implications

The paper can provide important insights for policy formulation in the areas of financial education and literacy.

Originality/value

There has been lot of conceptual and empirical work done in the past, across countries, spanning the disciplines such as economics, finance, psychology and consumer behaviour. A major contribution of this study is that it consolidates fragmented literature in the area, highlights significant sources, authors and documents, while exploring the relation between financial literacy and financial behaviour.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

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Article
Publication date: 12 November 2019

John Case and Michael Quarrey

The purpose of this paper is to review and analyze policies where employee share ownership might be relevant to the inequality debate in the USA.

Abstract

Purpose

The purpose of this paper is to review and analyze policies where employee share ownership might be relevant to the inequality debate in the USA.

Design/methodology/approach

Description and analysis of policy alternatives designed to increase the prevalence of employee ownership in the USA economy.

Findings

Since 1974, Congress has passed many provisions to encourage employee ownership, all with widespread bipartisan support. Additional policies would have an even greater impact. Congress could “level the playing field” for corporate divestitures and sales of companies by private equity firms; create Employee Ownership Investment Corporations, modeled after Small Business Investment Corporations, to provide capital for sales to employees; and create an Employee Equity Loan Program to guarantee loans for employee-ownership transactions. Such measures would have no budgetary impact. It could also create tax incentives to encourage corporate and private-equity sales to employees and establish regulations to ensure that employee-owned companies are eligible for the full benefit of recent opportunity zone legislation. Legislation could also encourage publicly traded companies to offer stock to employees at a discount and require companies that receive various forms of special treatment from the government to establish employee stock-ownership programs.

Originality/value

The academic journal literature has virtually no policy analyses on employee share ownership.

Details

Journal of Participation and Employee Ownership, vol. 2 no. 3
Type: Research Article
ISSN: 2514-7641

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Article
Publication date: 25 June 2020

Chris Gilleard

This study aims to explore whether trends in the pattern of income inequality over the past 40 years apply equally to working and retirement age households in the UK, and…

Abstract

Purpose

This study aims to explore whether trends in the pattern of income inequality over the past 40 years apply equally to working and retirement age households in the UK, and if so, why this might be so.

Design/methodology/approach

Drawing on data from the Office of National Statistics, various indices of income inequality have been calculated among retired and working-age households for the period 1977–2017.

Findings

Despite a broadly similar trend towards increasing inequality during the 1980s and into the 1990s among both types of household, income inequality among UK retired households has always remained below than that of working-age households. For retired and working-age households alike, the fortunes of those in the upper half of the income distribution have seen themselves do better. Despite the temporal contiguity, different explanations for both sets of inequalities seem to be required, and likely different strategies needed to ameliorate their more negative effects.

Originality/value

Few studies have conducted comparisons of inequality between retirement and working-age households over four decades in any country. The present study's long view suggests that factors creating inequality in the upper half of the income distribution may differ in both their cause and impact, compared with inequalities in the lower half. Arguably, the greatest need is to improve access to benefits for those retired householders at the bottom of the income distribution.

Details

International Journal of Sociology and Social Policy, vol. 41 no. 5/6
Type: Research Article
ISSN: 0144-333X

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Article
Publication date: 2 August 2011

James Obben and Monique Waayer

The combination of low rates of private saving and projected increases in the fiscal burden of financing a public pension scheme for an ageing population poses a major…

Abstract

Purpose

The combination of low rates of private saving and projected increases in the fiscal burden of financing a public pension scheme for an ageing population poses a major policy challenge in New Zealand. Policy discourses espouse pension reform and the redoubling of household saving efforts. However, some of the policy options could have offsetting effects. To inform the debate with research findings, the purpose of this paper is to revisit the relationship between social security and household saving.

Design/methodology/approach

The paper employs a constructed social security wealth (SSW) variable in a hybrid life cycle‐permanent income consumption/saving model pioneered by Feldstein. Time series techniques are used.

Findings

The results show that an increase in the constructed gross SSW variable boosts saving. This suggests that concerns with accumulating assets to match the length of the implicit life expectancy at the current pension eligibility age overwhelm the view that the pension benefit is an adequate substitute for household assets. The other findings are consistent with a priori expectations: increases in disposable income boost saving; there is a significant propensity to consume out of household net wealth; and inflation and unemployment engender significant precautionary saving.

Practical implications

A policy to raise the retirement age may reduce the gross SSW and therefore the fiscal burden of the public pension scheme. However, in shortening the expected post‐retirement period that households have to save for, the policy may also reduce the saving rate.

Originality/value

Although the Feldstein approach has been used in studies in countries like Australia, Canada and the USA, a comparable study has not been undertaken in New Zealand. This study seeks to fill that void.

Details

International Journal of Social Economics, vol. 38 no. 9
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 5 May 2004

Teresa Serra, Barry K. Goodwin and Allen M. Featherstone

Off‐farm investment decisions of farm households are analyzed. Farm‐level data for a sample of Kansas farms observed from 1994 through 2000 are utilized. A system of…

Abstract

Off‐farm investment decisions of farm households are analyzed. Farm‐level data for a sample of Kansas farms observed from 1994 through 2000 are utilized. A system of censored dependent variable models is estimated to investigate the factors that influence the composition of farm households’ portfolios. The central question underlying the analysis is whether farm income variability influences off‐farm investment decisions. Previous analyses on the determinants of non‐farm investments have failed to consider the role of income variability. Results of this study indicate that higher farm income fluctuations increase the relevance of non‐farm assets in the farm household portfolio, thus suggesting these assets are used as farm household income risk management tools.

Details

Agricultural Finance Review, vol. 64 no. 1
Type: Research Article
ISSN: 0002-1466

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Article
Publication date: 4 February 2019

Oliwia Komada, Pawel Strzelecki and Joanna Tyrowicz

The purpose of this paper is to isolate and evaluate the causal effect of the changes in eligibility criteria on labor force participation (LFP) and exit to retirement of…

Abstract

Purpose

The purpose of this paper is to isolate and evaluate the causal effect of the changes in eligibility criteria on labor force participation (LFP) and exit to retirement of the cohorts affected by the reform that canceled most of the early pensions in Poland in 2009. At the individual level the reform created a huge discontinuity in treatment of different generations.

Design/methodology/approach

The authors rely on Polish Labor Force Survey and employ regression discontinuity design to evaluate the change in participation subsequent to the eligibility reform among the treated cohorts.

Findings

The authors find a statistically significant, but economically small discontinuity at the timing of the reform. The placebo test shows no similar effects in earlier or later quarters. Yet, the pure treatment effects are insignificant in vast majority of the specifications.

Research limitations/implications

There are some limitations of the data used in the research. It does not cover total population and some panel attrition can be expected. Authors also needed to cope with the lack of required details in survey questions. The main limitation of the method lies in the measurement of the immediate (short-term) effects while in many cases people require more time that 1–2 quarters for the decision after policy change.

Practical implications

The reduction of outflows to retirement was much less pronounced than could have been expected, largely due to already relatively lower propensity to retire early.

Social implications

There are two main policy implications of the study. First, constraining the pension eligibility criteria for retirement are frequently opposed by social actors. It is often considered that early retirement is a privilege – awarded on a basis of occupation or even simply employment in an industry. In many countries – e.g. France, Italy, Germany – attempts to make the eligibility criteria more strict resulted in general strikes and Poland was no exception from this rule. If treatment effects of the large and radical eligibility reform are small in participation rates and pension take-up rates, then immediate fiscal effects are bound to be small as well, even if in the desirable direction. This may explain why – given the strong social resistance – in many countries eligibility reforms are delayed or narrowed in scope. Second, the economic rationale for strong social resistance to eligibility reforms builds on assuming either a relatively high valuation of leisure time after exiting the labor market or a relatively high subjective valuation of the unemployment risk after passing the early retirement age threshold. If leisure preference is overstated, reducing eligibility may be opposed as such, but eligibility alone is irrelevant for household decision making. Meanwhile, unemployment risk may be mitigated via alternative instruments, such as employment protection legislation, as is the case in Poland. Depending on a specific composition of the two factors in a given country, the effects of the eligibility reforms may be as high as in Switzerland or as low as in Poland.

Originality/value

First, the authors provide an analysis of discontinuities in transitions from activity to retirement, rather than focusing on the labor market status. The panel dimension of the data permits to observe directly the flows into retirement/inactivity, controlling for age and birth cohort. Second, the authors complement a pure discontinuity in cohort analysis with a fuzzy design, because in addition to age eligibility the authors also analyze the effects of changes in occupational eligibility. Third, the authors provide a benchmark for the estimates in the actual quarter of the reform by a series of placebo and conditional specifications. This allows to evaluate the (immediate) size and heterogeneity of the treatment effects. The authors find small effects of age eligibility reduction and effectively no effects of occupational eligibility. Hence, increased LFP of the elderly, observed even prior to the reform, seems to be driven by factors unrelated to early pension eligibility.

Details

International Journal of Manpower, vol. 40 no. 2
Type: Research Article
ISSN: 0143-7720

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