2005
Will China Eat Our Lunch or Take Us to Dinner?—Simulating the Transition Paths of the U.S., E.U., Japan, and China
RB 2005-082 , UM05-03
This paper develops a dynamic, life-cycle, general equilibrium model to study the interdependent demographic, fiscal, and economic transition paths of China, Japan, the U.S., and the EU. Each of these countries/regions is entering a period of rapid and significant aging…
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Valuing Lost Home Production for Dual-Earner Couples
RB 2005-081 , UM04-14
Economists’ principal tool for studying household behavioral responses to changes in tax and other government policies, and the magnitude and determinants of private saving, is the life—cycle model. The purpose of this paper is to attempt to incorporate into that…
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Changes in Consumption and Activities in Retirement
RB 2005-080 , UM04-13
The simple one-good model of life-cycle consumption requires “consumption smoothing.” According to previous results based on partial spending and on synthetic panels, British and U.S. households apparently reduce consumption at retirement. The reduction cannot be explained by the simple one-good…
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The Impact of Health Status and Out-of-Pocket Medical Expenditures on Annuity Valuation
RB 2005-079 , UM04-03
This paper describes how differences in health status at retirement can influence the decision to purchase a life annuity. We extend previous research on annuitization decisions by incorporating the effect of health differentials via differences in survival throughout the latter…
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Saving Shortfalls and Delayed Retirement
WP 2005-094 , UM04-C1
Prior research has suggested that many older Americans have not saved enough to maintain consumption levels in old age. One way older persons might respond to inadequate savings would be to extend their worklives by delaying retirement. This paper examines…
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Using a Structural Retirement Model to Simulate the Effect of Changes to the OASDI and Medicare Programs
RB 2005-075 , UM04-06
In this paper, we specify a dynamic programming model that addresses the interplay among health, financial resources, and the labor market behavior of men in the later part of their working lives. The model is estimated using data from the…
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Grasshoppers, Ants and Pre-Retirement Wealth: A Test of Permanent Income Consumers
RB 2005-072 , UM04-S1
This paper shows that households who enter retirement with low wealth consistently followed non-permanent income consumption rules during their working years. Using the Panel Study of Income Dynamics (PSID), household wealth in 1989 is predicted for a sample of 50-65…
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Global Aging: Issues, Answers, and More Questions
WP 2005-068 , UM04-Q1
Global aging will be a major determinant of long run economic development in industrial and developing countries. The extent of the demographic changes is dramatic and will deeply affect future labor, financial and goods markets. The expected strain on public…
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Betting on Death and Capital Markets in Retirement: A Shortfall Risk Analysis of Life Annuities versus Phased Withdrawal Plans
RB 2005-053 , UM04-12
How might retirees consider deploying the retirement assets accumulated in a defined contribution pension plan? One possibility would be to purchase an immediate annuity. Another approach, called the “phased withdrawal” strategy in the literature, would have the retiree invest his…
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Obesity, Disability, and Movement Onto the Disability Insurance Rolls
WP 2005-073 , UM04-08
Between the early 1980s and 2002, both the prevalence of obesity and the number of beneficiaries of the Social Security Disability Insurance program doubled. We test whether these trends are related; specifically, we test whether obesity causes disability and movement…
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