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Comments on ‘Retirement Patterns in Europe and the U.S.’ Patrick Aubert (DREES and CREST)

Comments on ‘Retirement Patterns in Europe and the U.S.’ Patrick Aubert (DREES and CREST). The idea of the paper. Illustrate the effect of all potential explanations of retirement patterns: monetary factors (financial incentives):

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Comments on ‘Retirement Patterns in Europe and the U.S.’ Patrick Aubert (DREES and CREST)

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  1. Comments on ‘Retirement Patterns in Europe and the U.S.’ Patrick Aubert (DREES and CREST)

  2. The idea of the paper • Illustrate the effect of all potential explanations of retirement patterns: • monetary factors (financial incentives): • replacement incomes provided by Social Security schemes (pension, but also disability, unemployment, pre-retirement schemes, …) • tax system • non-monetary factors: health, preferences (leisure/consumption trade-off), cultural norms, ... • Cross-country comparison

  3. The Method • Alternative to the Gruber & Wise approach (i.e. gathering country studies with specific data for each country, but common analytical framework) • Kapteyn & Andreyeva’s approach: • a single multi-country dataset • non-monetary factors: individual variables in the data • monetary factors : proxied by OECD indicators, built at the country*gender level • no country dummies • A growing literature using this approach: • Blanchet & Debrand (2007), Debrand & Sirven (2009), … • Here, authors are going a bit further : using the results of the estimates to simulate policy reforms

  4. Questions about the model • Enrich the specification? • More flexible age pattern ? • Distance to minimum eligibility age? • Indicators for generosity of Unemployment Insurance? • Age pattern of incentives? • using accrual of pension wealth (cf. Whitehouse and Queisser, 2006) • Theoretical vs. Observed indicators for generosity of Social Security schemes?

  5. Questions about the model (2) • Finding variability in indicators for pension schemes’ generosity? • Model of staying in work => possibility to define earnings at previous, and thus use OECD indicators for replacement rate by level of earnings? • Time variability (use several SHARE waves)?

  6. Questions about Policy Recommendations • The Authors’ main recommendation as regard monetary factor is to enforce financial incentives (move toward actuarially fair schemes, introduction of DC, consider incentive effects of replacement rate, etc.) • How to reconcile these recommendations with adequacy goals? • Role (means-tested) minimum pension? • Ex-ante calibration? • Design incentive patterns under adequacy constraints?

  7. References • Blanchet D. and T. Debrand [2007], “Souhaiter prendre sa retraite le plus tôt possible : santé, satisfaction au travail et facteurs monétaires”, Economie et statistique n°403-404, pp. 39-62 • Debrand T. and N. Sirven [2009], “Quelles sont les motivations des départs à la retraite en Europe : situation personnelle, familiale, professionnelle ou rôle de la protection sociale ?” IRDES Working Paper n°26 • Whitehouse E. and M. Queisser [2006], “Retirement Incentives: Draft Special Issue of Pensions at a Glance”, OECD Working Paper DELSA/ELSA/WP1(2006=2

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