One of the major findings of this paper, which studied the multiplier effects of pensions received at each Portuguese municipality since 2003, is that pensions stimulate the incomes of municipalities. We studied these effects also considering the spillovers from/to the surrounding areas. After discussing several models of spatial analysis, we chose the Dynamic Spatial Durbin Model. Our results were obtained after considering a proper set of control variables.

In this paper, we analyze gender and socioeconomic differences in the length of working lives and pension income in Finland. Based on internationally unique data covering 50 years of recorded information on individual employment histories and first-year old-age pension income of a cohort retiring in 2011, we trace life-time work histories and their relation to pension income with greater precision than previous studies. While gender and socioeconomic income differences in the lengths of working lives are modest, differences in pension income are more pronounced. The residence-based national pension targeted at those with no or only low earning-related pension accrual plays an important role in cushioning old-age income differences. The results suggest that unequal life-time earnings and occupational segregation remain main challenges for equalizing pension income in old age.

The low demand for immediate annuities at retirement has been a long-standing puzzle. We show that a hyperbolic discount model can explain this behaviour and results in the attractiveness of long-term deferred annuities. With a set of benchmark assumptions, we find that retirees would be willing to pay a much higher price than the actuarial fair price for annuities with longer deferred periods. Moreover, if governments were to introduce a pre-commitment device which requires pensioners to make annuitisation decisions around 10 years before retirement, the take up rate of annuities could become higher.

In this paper, we examine reforms characterized by the establishment of mandatory funded privately-managed schemes in the social security framework. We construct a new dataset to analyze the determinants of pension reforms over 1980–2012 in about 100 medium and large economies around the world. Our results highlight the fundamental importance of economic forces in explaining the speed of reforms after adjusting for the confounding effects of demographic and geopolitical factors. Countries with greater globalization growth and a history of economic crisis experienced a shorter time until reform. These findings are robust to variations in empirical methodology.

This paper models the decumulation period of a Personal Pension with Risk sharing (PPR). We derive several relationships between the contract parameters. Individuals can adopt two approaches to the decumulation period of a PPR: the investment approach and the consumption approach. In the investment approach, individuals specify how to invest wealth and how much wealth to withdraw. Retirement consumption follows endogenously. In the consumption approach, in contrast, individuals specify retirement consumption exogenously. Investment and withdrawal policies follow endogenously. We explore these two approaches in detail. Consistent with habit formation, we allow for excess smoothness and excess sensitivity in retirement consumption.

We compare two contracts for managing systematic longevity risk in retirement: a collective arrangement that distributes the risk among participants, and a market-provided annuity contract. We evaluate the contracts’ appeal with respect to the retiree's welfare, and the viability of the market solution through the financial reward to the annuity provider's equityholders. We find that individuals prefer to bear the risk under a collective arrangement than to insure it with a life insurers' annuity contract subject to insolvency risk (albeit small). Under realistic capital provision hypotheses, the annuity provider is incapable of adequately compensating its equityholders for bearing systematic longevity risk.

Over the past two decades, the share of individuals claiming Social Security at the Early Eligibility Age has dropped and the average retirement age has increased. At the same time, Social Security rules have changed substantially, employer-sponsored retirement plans have shifted from defined benefit (DB) to defined contribution (DC), health has improved, and mortality has decreased. In theory, all of these changes could lead to a trend toward later claiming. Disentangling the effect of any one change is difficult because they have been occurring simultaneously. This paper uses the Gustman and Steinmeier structural model of retirement timing to investigate which of these changes matter most by simulating their effects on the original cohort (1931–1941) of the Health and Retirement Study (HRS). The predicted behavior is then compared with the actual retirements of the Early Boomer cohort (1948–1953) to see how much of the later cohort's delayed claiming and retirement can be explained by these changes. The Early Boomer cohort was less likely to be fully retired than the HRS cohort at both age 62 (36.7% vs. 44.0%) and age 64 (49.5% vs. 53.9%). The model suggests that the shift from DB toward DC plans was the biggest contributor to these declines, followed by better health. Social Security rules and improvements in mortality played smaller roles.