Tuesday, July 26, 2016

NBER Summer Institute Agenda and Papers (Aging)


SI 2016 Aging

David M. Cutler, and Jonathan S. Skinner, Organizers

July 25-29, 2016


Nicole Maestas, Harvard University and NBER
Kathleen Mullen, RAND Corporation
David Powell, RAND Corporation
Till M. von Wachter, University of California at Los Angeles and NBER
Jeffrey B. Wenger, RAND Corporation
American Working Conditions

Daniel K. Fetter, Wellesley College and NBER
Lee Lockwood, Northwestern University and NBER
Government Old-Age Support and Labor Supply: Evidence from the Old Age Assistance Program

David M. Cutler, Harvard University and NBER
Wei Huang, Harvard University
Adriana Lleras-Muney, University of California at Los Angeles and NBER
Economic Conditions and Mortality: Evidence from 200 Years of Data

Ruixue Jia, University of California at San Diego
Hyejin Ku, University College London
The Price of the East Asian Miracle: Generational Cultural Shift and Elderly Suicide

Itzik Fadlon, University of California at San Diego and NBER
Torben Heien Nielsen, University of Copenhagen
Intra-Household Dependencies in Health and Health Behaviors

Gopi Shah Goda, Stanford University and NBER
Matthew Levy, London School of Economics
Colleen Flaherty Manchester, University of Minnesota
Aaron Sojourner, University of Minnesota
Joshua Tasoff
The Role of Time Preferences and Exponential-Growth Bias in Retirement Savings

Daniel J. Benjamin, University of Southern California and NBER
Mark Fontana
Miles S. Kimball, University of Michigan and NBER
Reconsidering Risk Aversion

Partha Bhattacharyya, National Institutes of Health
NIH Funding for Health Economics

Lorenz Kueng, Northwestern University and NBER
Evgeny Yakovlev, Acumen LLC
Long-Run Effects of Public Policies: Endogenous Alcohol Preferences and Life Expectancy in Russia

Sumit Agarwal, National University of Singapore
Jessica Pan, National University of Singapore
Wenlan Qian, National University of Singapore
Age of Decision: Pension Savings Withdrawal and Consumption and Debt Response

Paul Bingley, The Danish National Centre for Social Research
Alessandro Martinello, Lund University
The Effect of Schooling on Wealth Accumulation Approaching Retirement

Xi Chen, Yale University
Lipeng Hu, Peking University
Jody Sindelar, Yale University and NBER
Leaving Money on the Table? Social Pension Enrollment and Well-being of the Aging Population in China

Thomas DeLeire, Georgetown University and NBER
Andre Chappel, U.S. Department of Health and Human Services
Kenneth Finegold, U.S. Department of Health and Human Services
Emily Gee, U.S. Department of Health and Human Services
Do Individuals Respond to Cost-Sharing Subsidies in their Selections of Marketplace Health Insurance Plans?

Jonathan Gruber, Massachusetts Institute of Technology and NBER
Jason Abaluck, Yale University and NBER
Addressing Choice Inconsistencies in Choice of Health Insurance Plans

Pietro Tebaldi, Stanford University
Estimating Equilibrium in Health Insurance Exchanges: Price Competition and Subsidy Design Under the ACA

Amanda Starc, University of Pennsylvania and NBER
Robert Town, University of Pennsylvania and NBER
Internalizing Behavioral Externalities: Benefit Integration in Health Insurance

Leemore Dafny, Northwestern University and NBER
Kate Ho, Columbia University and NBER
Robin S. Lee, Harvard University and NBER
Price Effects of Cross-Market Combinations: Theory and Evidence from Hospital Markets

Nicolas R. Ziebarth, Cornell University
Stefan Pichler, ETH Zurich
The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Shirking Behavior

Benjamin Friedrich, Yale University
Martin Hackmann, Pennsylvania State University
Parental Leave Programs, Nurse Shortages, and Patient Health


David W. Silver, University of California at Berkeley
Haste or Waste? Peer Pressure and the Distribution of Marginal Returns to Health Care

Diane E. Alexander, Princeton University
How do Doctors Respond to Incentives? Unintended Consequences of Paying Doctors to Reduce Costs

Zack Cooper, Yale University
Amanda E. Kowalski, Yale University and NBER
Eleanor N. Powell, University of Wisconsin-Madison
What Does a Hospital Do with Eighteen Million Dollars? Evidence From the Passage of Medicare Part D

Scott Barkowski, Clemson University
The Effect of Specialist Cost Information on Primary Care Physician Referral Patterns

Read more!

NBER Summer Institute Agenda and Papers (Aging/Social Security)


SI 2016 Aging/Social Security

Jeffrey B. Liebman, Organizer

July 27, 2016

Royal Sonesta Hotel


Silvia Garcia-Mandico, Erasmus University Rotterdam
Pilar Garcia-Gomez, Erasmus University Rotterdam
Anne Gielen, Erasmus University Rotterdam
Owen O'Donnell, University of Macedonia
Back to Work: Employment Effects of Tighter Disability Insurance Eligibility in the Netherlands

Dayanand S. Manoli, University of Texas at Austin and NBER
Andrea Weber, University of Mannheim
The Effects of the Early Retirement Age on Retirement Decisions

Alexander M. Gelber, University of California at Berkeley and NBER
Timothy J. Moore, George Washington University and NBER
Alexander Strand, Social Security Administration
The Effect of Disability Insurance Payments on Beneficiaries� Earnings

Marguerite Burns, University of Wisconsin
Laura Dague, Texas A&M University
The Effect of Expanding Medicaid Eligibility on Supplemental Security Income Program Participation

Xi Chen, Yale University
Does Money Relieve Depression? Evidence from Social Pension Eligibility

Xavier Gabaix, New York University and NBER
Behavioral Macroeconomics via Sparse Dynamic Programming

Read more!

New paper: “How Can We Realize the Value That Annuities Offer in a 401(k) World?”

The Center for Retirement Research at Boston College has released a new Issue in Brief:

“How Can We Realize the Value That Annuities Offer in a 401(k) World?”

by Steven A. Sass

The brief’s key findings are:

  • A growing number of people are entering retirement with more 401(k) savings and less annuity income from Social Security and traditional pensions.
  • Annuities assure a lifelong income stream and – compared to other draw-down options – can provide attractive payouts, which can help cover late-life health costs.
  • But few individuals buy annuities, partly due to behavioral barriers such as the complexity of valuing the product and the way that draw-down options are framed.
  • Options for overcoming these barriers include:
    • educating individuals to focus more on the income they can draw from their nest egg, rather than its size; and
    • automatically putting a portion of 401(k) assets in an annuity, perhaps an Advanced Life Deferred Annuity that kicks in later in retirement.
This brief is available here. Read more!

Friday, July 22, 2016

New paper: “Labor Force Dynamics in the Great Recession and its Aftermath: Implications for Older Workers”

July 2016

Labor Force Dynamics in the Great Recession and its Aftermath: Implications for Older Workers

by Gary Burtless
WP#2016-1 Abstract

Unlike prime-age Americans, who have experienced declines in employment and labor force participation since the onset of the Great Recession, Americans past 60 have seen their employment and labor force participation rates increase.  In order to understand the contrasting labor force developments among the old, on the one hand, and the prime-aged, on the other, this paper develops and analyzes a new data file containing information on monthly labor force changes of adults interviewed in the Current Population Survey (CPS).  The paper documents notable differences among age groups with respect to the changes in labor force transition rates that have occurred over the past two decades.  What is crucial for understanding the surprising strength of old-age labor force participation and employment are changes in labor force transition probabilities within and across age groups.

The paper identifies several shifts that help account for the increase in old-age employment and labor force participation:

  • Like workers in all age groups, workers in older groups saw a surge in monthly transitions from employment to unemployment in the Great Recession.
  • Unlike workers in prime-age and younger groups, however, older workers also saw a sizeable decline in exits to nonparticipation during and after the recession. While the surge in exits from employment to unemployment tended to reduce the employment rates of all age groups, the drop in employment exits to nonparticipation among the aged tended to hold up labor force participation rates and employment rates among the elderly compared with the nonelderly.  Among the elderly, but not the nonelderly, the exit rate from employment into nonparticipation fell more than the exit rate from employment into unemployment increased.
  • The Great Recession and slow recovery from that recession made it harder for the unemployed to transition into employment. Exit rates from unemployment into employment fell sharply in all age groups, old and young.
  • In contrast to unemployed workers in younger age groups, the unemployed in the oldest age groups also saw a drop in their exits to nonparticipation. Compared with the nonaged, this tended to help maintain the labor force participation rates of the old.
  • Flows from out-of-the-labor-force status into employment have declined for most age groups, but they have declined the least or have actually increased modestly among older nonparticipants.

Some of the favorable trends seen in older age groups are likely to be explained, in part, by the substantial improvement in older Americans’ educational attainment.  Better educated older people tend to have lower monthly flows from employment into unemployment and nonparticipation, and they have higher monthly flows from nonparticipant status into employment compared with less educated workers.

The policy implications of the paper are:

  • A serious recession inflicts severe and immediate harm on workers and potential workers in all age groups, in the form of layoffs and depressed prospects for finding work.
  • Unlike younger age groups, however, workers in older groups have high rates of voluntary exit from employment and the workforce, even when labor markets are strong. Consequently, reduced rates of voluntary exit from employment and the labor force can have an outsize impact on their employment and participation rates.
  • The aged, as a whole, can therefore experience rising employment and participation rates even as a minority of aged workers suffer severe harm as a result of permanent job loss at an unexpectedly early age and exceptional difficulty finding a new job.
  • Between 2001 and 2015, the old-age employment and participation rates rose, apparently signaling that older workers did not suffer severe harm in the Great Recession.
  • Analysis of the gross flow data suggests, however, that the apparent improvements were the combined result of continued declines in age-specific voluntary exit rates, mostly from the ranks of the employed, and worsening reemployment rates among the unemployed. The older workers who suffered involuntary layoffs were more numerous than before the Great Recession, and they found it much harder to get reemployed than laid off workers in years before 2008.  The turnover data show that it has proved much harder for these workers to recover from the loss of their late-career job loss.


Read more!

New research on Australia’s pension system

"Means Testing of Public Pensions: The Case of Australia"
Michigan Retirement Research Center Research Paper No. 2016-338

GEORGE KUDRNA, University of New South Wales (UNSW)
Email: g.kudrna@unsw.edu.au

The Australian age pension is noncontributory, funded through general tax revenues and means tested against pensioners, private resources, including labour earnings. This paper constructs an overlapping generations (OLG) model of the Australian economy to examine the economy wide implications of several counterfactual experiments in the means testing of the age pension. These experiments include policy changes that both relax and tighten the existing mean test. We also consider a policy change that only exempts labour earnings from the means testing. Our simulation results indicate that tightening the existing means test combined with lower income tax rates leads to higher labour supply, domestic assets and consumption per capita, as well as to welfare gains in the long run, while labour earnings exemptions from the means testing have largely positive effects on labour supply at older ages. Population ageing is shown to further strengthen the case for the pension means testing.

"How Well Does the Australian Aged Pension Provide Social Insurance?"
Michigan Retirement Research Center Research Paper No. 2016-339

EMILY DABBS, Australian National University (ANU)
Email: emily.dabbs@uqconnect.edu.au
CAGRI S. KUMRU, Australian National University (ANU)
Email: cagri.kumru@anu.edu.au

Social security plays an essential role in an economy, but if designed incorrectly can distort the labor supply and savings behavior of individuals in the economy. We explore how well the Australian means-tested pension system provides social insurance by calculating possible welfare gains from changing the settings in the current means-tested pension system. This work has been explored by other researchers both in Australia and in other pension-providing economies. However, most research ignores the fact that welfare gains can be found by reducing the cost of the program. To exclude these welfare costs, this paper fixes the cost of the system. We find that the means-tested pension system is welfare reducing, but does provide a better outcome than an equivalent-costing PAYG system. We also find that if the benefit amount is held constant, and hence the cost of the pension program is allowed to vary, a taper rate of 1.0 is optimal. However, once we fix this cost, a universal benefit scheme provides the best welfare outcome.

Read more!

Thursday, July 21, 2016

How Much Do Americans REALLY Need to Save for Retirement

There’s a big debate about how well Americans are saving for retirement. The major source of that debate is disagreement on how much a person ideally should save – some people claim you should have retirement savings equal to 8 times your final salary; others say 12; still others say 20. But what does this mean?

Over at Forbes I’ve tried to shed some light on this by including an interactive online calculator that lets the user analyze retirement saving needs for Americans of different income levels. You decide what kind of replacement rate different retirees need and the calculator figures out how much they need to save. The results may surprise you.

You can check out the article and calculator here.

retirement savings calculator

Read more!

Monday, July 18, 2016

Upcoming Event: Recent Trends in Mortality and the Impact on Entitlements with Stephen Goss






Savings and Retirement Foundation
Lunch Forum
Recent Trends in Mortality and the Impact on Entitlements
with Stephen Goss

Wednesday, July 20
Noon to 1:00pm

Cato Institute
1000 Massachusetts Ave NW
Washington, DC 20001


Lunch will be provided.
This is a widely attended event.

Steve Goss has been Chief Actuary at the Social Security Administration since 2001.  Mr. Goss joined the Office of the Chief Actuary in 1973 after graduating from the University of Virginia with a MA in Mathematics.  He graduated from the University of Pennsylvania in 1971 with a BA, majoring in mathematics and economics. Mr. Goss is a member of the Society of Actuaries, the American Academy of Actuaries, the National Academy of Social Insurance, the Social Insurance Committee of the American Academy of Actuaries, and the Social Security Retirement and Disability Income Committee of the Society of Actuaries.

Read more!