2004
The Retirement-Consumption Puzzle: Anticipated and Actual Declines in Spending at Retirement
WP 2004-069 , UM03-10
The simple one-good model of life-cycle consumption requires “consumption smoothing.” However, British and U.S. households apparently reduce consumption at retirement and the reduction cannot be explained by the life-cycle model. An interpretation is that retirees are surprised by the inadequacy…
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Elderly Households and Housing Wealth: Do They Use It or Lose It?
WP 2004-070 , UM03-D1
Over 80 percent of households in their 50s are homeowners and housing wealth accounts for over half of total household wealth for most of these homeowners. The evidence in the literature on whether the elderly are consuming their housing wealth…
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A Cross-National Comparison of the Employment for Men With Disabilities: The United States and Germany in the 1980s and 1990s
WP 2004-071 , UM03-D3
Using a single period measure to capture the population with disabilities in the Panel Study of Income Dynamics we observe the same dramatic decline in the relative employment rate of working age people with disabilities in the 1990s that is…
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Economic Adjustment of Recent Retirees to Adverse Wealth Shocks
WP 2004-075 , UM03-S1
Since the mid-nineties, the stock market has had an unprecedented impact on the wealth of current and future retirees. Using data from the Current Population Survey and the Health and Retirement Study, this report estimates consumption and labor supply responses…
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Trading with the Unborn: A New Perspective on Capital Income Taxation
WP 2004-066 , UM03-12
Security markets between generations are incomplete in the laissez-faire economy since risk sharing agreements cannot be made with the unborn. But suppose that generations could trade if, for example, a representative of the unborn negotiated on their behalf today. What…
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Life, Death, and the Economy: Mortality Change in Overlapping-Generations Model
WP 2004-072 , UM01-03
Demographers have shown that there are regularities in mortality change overtime, and have used these to forecast changes due to population aging. Such models leave out potential economic feedbacks that should be captured by dynamic models such as the general-equilibrium,…
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Random Scenario Forecasts Versus Stochastic Forecasts
WP 2004-073 , UM01-03
Probabilistic population forecasts are useful because they describe uncertainty in a quantitatively useful way. One approach (that we call LT) uses historical data to estimate stochastic models (e.g., a time series model) of vital rates, and then makes forecasts. Another…
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Modeling Lifetime Earnings Paths: Hypothetical versus Actual Workers
WP 2004-074 , UM02-C2
To assess the distributional effects of social security reform proposals, it is essential to have good information on real-world workers’ lifetime earnings trajectories. Until recently, however, policymakers have relied on hypothetical earnings profiles for policy analysis. We use actual lifetime…
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How to Evaluate the Effects of Social Security Policies on Retirement and Saving When Firm Policies Affect the Opportunities Facing Older Individuals
WP 2004-078 , UM03-03
This project uses data from the Health and Retirement Study to examine, in the context of a structural retirement model, the effects on retirement of non-wage aspects of employment emanating from firm side factors. Factors examined include minimum hours constraints,…
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Understanding Patterns of Social Security Benefit Receipt, Pensions Incomes, Retirement and Saving by Race, Ethnicity, Gender and Marital Status: A Structural Approach
WP 2004-082 , UM03-13
In this paper we use data from the Health and Retirement Study to examine differences in retirement behavior, wealth, Social Security and pension benefits by race and gender. The differences observed among groups are sometimes substantial. We then estimate models…
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