New papers from the Social Science Research Network

"Evidence of Increasing Differential Mortality: A Comparison of the HRS and SIPP" 
Center for Retirement Research at Boston College Working Paper No. 2015-13

BARRY BOSWORTH, Brookings Institution - Economic Studies Program
Email: bbosworth@brookings.edu
KAN ZHANG, Brookings Institution
Email: KZhang@brookings.edu

This paper uses data from the Survey of Income and Program Participation (SIPP) and the Health and Retirement Study (HRS) to explore the extent of a widening in life expectancies by socioeconomic status (SES) for older persons. We construct four alternative measures of SES, using educational attainment, average (career) earnings in the prime working ages of 41-50, wealth, and occupational classifications.

The paper finds that: There is strong statistical evidence in both the SIPP and HRS of a growing inequality of mortality risk by SES across birth cohorts from 1910 to 1961. Growing inequality in mortality risk is evident using all four indicators of SES, but it is strongest for the measures based on career earnings and educational attainment. The secular changes in differential mortality are very large, but their influence on the length of time for which people receive benefits has been dampened by legal restrictions on early retirement for low-SES individuals and by voluntary postponement of retirement at the top of the distribution. Self-reported health status is a highly significant predictor of mortality risk, but its inclusion in the statistical models has only a marginal effect on the evidence of differential mortality operating through the various SES indicators. The combination of survey measures of the various SES indicators and the administrative records covering earnings, death records, and OASDI benefits provides a particularly large and rich data set for the analysis of mortality experience and its implications for the distribution of benefits.

The policy implications of the findings are: Indexing the retirement age to increases in average life expectancy to stabilize OASDI finances may have substantial unintended distributional consequences, because most mortality gains have been concentrated among workers with relatively high SES.

"Facing a Biased Adviser While Choosing a Retirement Plan. The Impact of Financial Literacy and Fair Disclosure." 
Journal of Consumer Affairs, 2015 Forthcoming

EYAL CARMEL, Ben-Gurion University of the Negev
Email: carmeley@gmail.com
DANA CARMEL, Ben-Gurion University of the Negev - Department of Psychology
Email: bomzedana@gmail.com
DAVID LEISER, Dept. of Psychology - Ben Gurion University of the Negev
Email: dleiser@bgu.ac.il
AVIA SPIVAK, Ben-Gurion University of the Negev - Department of Economics
Email: avia@bgumail.bgu.ac.il

Buying a retirement saving plan in Israel involves meeting with an agent whose interests may differ from those of his or her customers. The aim of the present study was to explore the effect of the advice given by the agent, along with that of two further factors: a fair disclosure statement regarding ‎the agent’s ‎conflict of interest, and the customer's degree of financial literacy. Two experiments conducted among undergraduate students in Israel showed that customers ‎mostly ‎follow the agent's recommendation, even against their best ‎interest, and despite the presence of a fair disclosure statement. Only participants with high financial literacy, who received a disclosure statement, did examine the alternatives closely and rejected the advice when the recommendation was damaging. We also ruled out the existence of a negative psychological reactance response to a disclosure statement that would work to the detriment of financially literate participants.

"Shifting the Place of Social Security: Welfare Reform and Social Rights Under the Coalition Government's Austerity Programme" 
Jed Meers, 'Shifting the Place of Social Security: Welfare Reform and Social Rights under the Coalition Government's Austerity Programme' (2015)

JED MEERS, University of York, York Law School, Students

Email: jed.meers@york.ac.uk

The overall focus of the changing nature of social rights protection under austerity needs to be linked, of course, with specific investigations of the administration of social welfare law and policy in the age of austerity. As part of this, a report has been complied analysing the UK Coalition Government’s welfare reform agenda by Jed Meers.

It seeks to outline and analyse the key reforms and legal challenges stemming from the Welfare Reform Act 2012, and identify key problems with the current legal tools available to challenge reforms and key themes arising in the case law