Journal ArticleDOI
Effects of COVID-19 Early Release of Pension Funds. The Case of Chile
TLDR
In this article, the authors quantified the effects of a 10% early release of pension funds and proposed four policies to mitigate these effects and address the current challenges of most defined contribution pension schemes.Abstract:
Amid the extraordinary economic effects of COVID-19, some policymakers have turned to retirement accounts to support individuals in financial hardship. Given the haste, the long-term impacts and their heterogeneity have scarcely been analyzed. Using Monte Carlo simulations on the Chilean Social Protection Survey linked with administrative data, this study quantifies the effects of a 10% early release of pension funds. Each withdrawn dollar brings losses of 1.59 dollars in future retirement savings, reducing monthly pension benefits by 7.26%. This policy raises income inadequacy and inequality in retirement, increasing government expenditure by 4.33% to counteract these effects for 65-year-old retirees. We propose four policies to mitigate these effects and address the current challenges of most defined contribution pension schemes. Increasing contributions combined with an intragenerational solidarity component shows the biggest impacts. Contribution enforcement, reducing tax evasion, and delaying retirement by at least 1 year via incentives have lower but significant effects.read more
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The economics of pensions
Nicholas Barr,Peter A. Diamond +1 more
TL;DR: In this paper, the authors set out the economic analytics of pensions, including the effects of different pension arrangements on labour markets, on national savings and growth, and on the distribution of burdens and benefits.
Journal ArticleDOI
A Road Map for Efficiently Taxing Heterogeneous Agents
TL;DR: The authors characterizes optimal labor-income taxes that depend on age, household assets, and filing status (one or two earners) within a life-cycle model with heterogeneous, two-member households and endogenous human capital.
Journal ArticleDOI
Allowing early access to retirement savings: Lessons from Australia
Nathan Wang-Ly,Ben R. Newell +1 more
TL;DR: In response to the COVID-19 pandemic, many governments around the world introduced policies aiming to provide citizens with financial relief through early access to their retirement savings, such as the Early Release of Super (ERS) scheme as discussed by the authors , which allowed eligible citizens to withdraw up to A$20,000 in funds between April and December 2020.
References
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Journal ArticleDOI
A new look at the statistical model identification
TL;DR: In this article, a new estimate minimum information theoretical criterion estimate (MAICE) is introduced for the purpose of statistical identification, which is free from the ambiguities inherent in the application of conventional hypothesis testing procedure.
Journal ArticleDOI
Estimating the Dimension of a Model
TL;DR: In this paper, the problem of selecting one of a number of models of different dimensions is treated by finding its Bayes solution, and evaluating the leading terms of its asymptotic expansion.
Estimating the dimension of a model
TL;DR: In this paper, the problem of selecting one of a number of models of different dimensions is treated by finding its Bayes solution, and evaluating the leading terms of its asymptotic expansion.
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Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence
Robert E. Hall,Robert E. Hall +1 more
TL;DR: In this paper, the marginal utility of consumption evolves according to a random walk with trend, and consumption itself should evolve in the same way, and the evidence supports a modified version of the life cycle permanent income hypothesis.
Journal ArticleDOI
Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence
TL;DR: In this article, the authors show that no variable apart from current consumption should be of any value in predicting future consumption, except real disposable income, which has no predictive power for consumption, but rejected for an index of stock prices.