2003
The German Public Pension System: How it Was, How it Will Be
WP 2003-041 , UM03-01
Germany still has a very generous public pay-as-you-go pension system. It is characterized by early effective retirement ages and very high effective replacement rates. Most workers receive virtually all of their retirement income from this public retirement insurance. Costs are…
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The Impact of Diabetes on Work-force Participation: Results from a National Household Sample
WP 2003-034 , UM01-11
Background. Diabetes is a highly prevalent condition with substantial associated morbidity. The economic impact of diabetes is dramatic, with estimated total costs of $98 billion in 1997. We sought to investigate the effects of diabetes on work-force participation, including absenteeism,…
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Microsimulations in the Presence of Heterogeneity
WP 2003-048 , UM01-08
This paper develops a method that improves researchers’ ability to account for behavioral responses to policy change in microsimulation models. Current microsimulation models are relatively simple, in part because of the technical difficulty of accounting for unobserved heterogeneity. This is…
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Labor Supply Responses to Social Security
WP 2003-050 , UM02-03
Economists’ most basic model for studying Social Security policy issues is the so—called life—cycle model of saving behavior. This paper sets up a life—cycle model in which a household simultaneously chooses its lifetime consumption profile and retirement age. The paper…
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Saving for Retirement: Wage Growth and Unexpected Events
WP 2003-045 , UM02-05
We found that there is a perception of ‘under-saving’ for retirement among many individuals. Individuals who perceive they have saved inadequately attribute this mainly to having insufficient income. Under a lifecycle model of consumption with a known income path this…
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The Economic Status of Elderly Divorced Women
WP 2003-046 , UM02-08
Over the past 35 years the gap in poverty between divorced and married women increased from 2:1 (in 1967) to 4:1 (in 2001). Despite high poverty rates, divorced women are no less educated than married women. Labor market earnings are…
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Mental Health and Labor Force Exits in Older Workers: The Mediating or Moderating Roles of Physical Health and Job Factors
WP 2003-047 , UM01-07
This paper extends earlier health and work studies by examining how mental health affects transitions out of paid work in the years prior to the traditional Social Security retirement ages. Given recent changes in the labor market, optimal mental health…
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Lifetime Earnings Variability and Retirement Wealth
WP 2003-051 , UM01-C1
This paper explores how earnings variability is related to retirement wealth. Past research has demonstrated that the average American household on the verge of retirement would need to save substantially more, in order to preserve consumption flows in old age.…
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What to Expect when you are Expecting Rationality: Testing Rational Expectations using Micro Data
WP 2003-037 , UM02-11
This paper tests the Rational Expectations (RE) hypothesis regarding retirement expectations, controlling for sample selection, reporting biases, and unobserved heterogeneity. We find that retirement expectations in the Health and Retirement Study (HRS) are consistent with the RE hypothesis. We also…
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A Lifecycle Analysis of Defined Benefit Pension Plans
WP 2003-053 , UM02-D1
This paper employs a lifecycle model from the consumption-savings literature to examine the tradeoffs between defined benefit and defined contribution pension plans. We examine the effects of varying risk aversion, varying initial income and financial wealth, and varying wage processes…
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