Agar Brugiavini

Social Security and Households' Saving

This paper provides new evidence on the substitutability between private and pension wealth by exploiting the Italian pension reform of 1992. We use a difference-in-difference estimator that exploits the differential effects of the reform on individuals belonging to several year-of-birth cohorts and different occupational groups. We find convincing evidence that saving rates increase as a result of a reduction in pension wealth. By allowing for the possibility that substitutability changes with age, we find that substitutability is particularly high (and precisely estimated) for workers between 35 and 45.

Uncertainty resolution and the timing of annuity purchases

Abstract This paper considers the question of why the annuity market is thin. A model is presented in which consumers have the option of purchasing annuities before discovering their survival probability; they can then recontract the initial choice after the resolution of this form of uncertainty. It is shown that consumers purchase insurance against their own survival-probability type at a very young age and do not undertake further transactions. This characterization is then used to analze the effects of introducing future income uncertainty and to investigate the trade-off between old age insurance motive and portfilio flexibility.

Risk Pooling, Precautionary Saving and Consumption Growth

In this paper we model the evolution of income risk and consumption growth. We decompose the time series innovation of the income process into its common and cohort-specific components. From these we compute conditional variances which are used as separate risk terms in a consumption growth equation. Using a long series of British household data we exploit the time-series variation to identify precautionary saving effects and find strong evidence of their importance. Specifically, after allowing for demographic and labour market status, there is an independent role for income risk in explaining consumption growth. Rather than the component that is common across cohorts, however, it is the cohort-specific element that is important in determining changes in consumption growth. This result points to a failure of between-cohort insurance mechanisms.

The role of institutions and health in European patterns of work and retirement

This article uses the Survey of Health, Ageing and Retirement in Europe (SHARE) to investigate the role of pension and social security institutions in shaping the European patterns of work and retirement. The key novelty of our article is a careful account of the health status of the respondents. We provide new evidence on the extent of health-adjusted ‘unused capacity’ in the labour force, on the institutional determinants of the pathways to retirement, and on the relationship between actual health status and disability-benefit recipiency. We find that institutional differences between countries explain much of the cross-national differences in work and retirement, while differences in health and demographics play only a minor role.

The long-run effect of maternity leave benefits on mental health: Evidence from European countries

This paper examines whether maternity leave policies have an effect on womens mental health in older age. We link data for women aged 50 years and above from countries in the Survey of Health, Ageing and Retirement in Europe (SHARE) to data on maternity leave legislation from 1960 onwards. We use a difference-in-differences approach that exploits changes over time within countries in the duration and compensation of maternity leave benefits, linked to the year women were giving birth to their first child at age 16 to 25. We compare late-life depressive symptom scores (measured with a 12-item version of the Euro-D scale) of mothers who were in employment in the period around the birth of their first child to depression scores of mothers who were not in employment in the period surrounding the birth of a first child, and therefore did not benefit directly from maternity leave benefits. Our findings suggest that a more generous maternity leave during the birth of a first child is associated with a reduced score of 0.38 points in the Euro-D depressive symptom scale in old age.

The Social Security Reform Process in Italy: Where Do We Stand?

A reform process is under way in Italy. Achieving financial sustainability of the social security system has been the first objective characterizing the reforms of 1990s, but these have also introduced rules which aim at a more actuarially fair system. Indeed the social security system prevailing in Italy, financed on a PAYG basis, was, at the end of the 1980s, clearly unsustainable and also extremely unfair to some group of workers, enacting a form of perverse redistribution which is typical of “final salary” defined benefit systems. It was also a system characterized by strong incentives to retire early. In this paper we briefly describe the different regimes of the Italian pension system in its recent history and focus on some aspects of the reform process taking place during the 1990s. Since economists and policy makers are still struggling to assess the results and the long-term effects of these reforms we provide both a survey of this debate and some fresh evidence on the evaluation of the policy changes. We carry out this analysis with a particular emphasis on two aspects which are relevant in the debate. On the one hand we stress the role of economic incentives and the overall fiscal implications of changing the systems as well as these incentives. On the other hand we emphasize the intergenerational considerations and the political implications of the ageing process of the Italian population. From our description it emerges that the overall design of the Italian reform is probably a good one, and yet some more steps need to be taken to speed up some of the positive effects of the reform process that, due the adverse demographic trends affecting PAYG systems as well as the political arena, could easily evaporate.

Extending health insurance in Ghana: effects of the National Health Insurance Scheme on maternity care

BackgroundThere is considerable interest in exploring the potential of social health insurance in Africa where a number of countries are currently experimenting with different approaches. Since these schemes have been introduced recently and are continuously evolving, it is important to evaluate their effectiveness in the enhancement of health care utilization and reduction of out-of-pocket expenses for potential policy suggestions.ObjectiveTo investigate how the National Health Insurance Schemes (NHIS) in Ghana affects the utilization of maternal health care services and medical out-of-pocket expenses.MethodsWe used nationally-representative household data from the Ghana Demographic and Health Survey (GDHS). We analyzed the 2014 GDHS focusing on four outcome variables, i.e. antenatal check up, delivery in a health facility, delivery assisted by a trained person and out-of-pocket expenditure. We estimated probit and bivariate probit models to take into account the issue of self selection into the health insurance schemes.ResultsThe results suggest that, also taking into account the issue of self selection into the health insurance schemes, the NHIS enrollment positively affects the probability of formal antenatal check-ups before delivery, the probability of delivery in an institution and the probability of being assisted during delivery by a trained person. On the contrary, we find that, once the issue of self-selection is taken into account, the NHIS enrollment does not have a significant effect on out-of-pocket expenditure at the extensive margin.ConclusionSince a greater utilization of health-care services has a strong positive effect on the current and future health status of women and their children, the health-care authorities in Ghana should make every effort to extend this coverage. In particular, since the results of the first step of the bivariate probit regressions suggest that the educational attainment of women is a strong determinant of enrollment, and those with low education and unable to read are less likely to enroll, information on the NHIS should be disseminated in ways that reach those with little or no education. Moreover, the availability of government health facilities in a region is associated with higher likelihood of enrollment in the NHIS. Accordingly, extending geographical access is an important strategy for expanding NHIS membership and improving access to health-care.

The direct impact of maternity benefits on leave taking: Evidence from complete fertility histories.

Maternity leave policies have important effects on several labour market outcomes of women, and are specifically designed to reduce gender differences in the various dimensions of working life and to contrast the negative consequence of fertility decisions. By making use of a unique data set which contains complete work and fertility histories for different European countries, combined with features of maternity leave schemes across countries and over time, we look at the effect of maternity leave benefits on job interruptions after each successive childbirth. The main result of the paper is that maternity leave legislation in Europe effectively increases job protection and female labour market attachment: a more generous paid maternity leave increases the number of weeks employed but not at work, but reduces the number of weeks spent out of the labour market.

Pensions and Retirement Incentives. A Tale of Three Countries: Italy, Spain and the USA

This paper looks at the relationship between the institutional design of the social security system and retirement from the labour force in three countries: Italy, Spain and the USA. Our works stresses the importance of dynamic incentives embedded in social security systems throughout the world and makes use of these three countries as an example. In fact they provide enough variability in their welfare programs that can be exploited to explain differences in retirement behavior. We show that social security rules are very important for individuals decisions to retire at a given age and that policy changes aimed at achieving age-neutrality of social security systems have a crucial role in shaping welfare.

The Role of Institutions in European Patterns of Work and Retirement

This paper uses the Survey of Health, Ageing and Retirement in Europe (SHARE) to investigate the role of pension and social security institutions in shaping the European patterns of work and retirement. We provide evidence on the extent of �unused capacity� in labor force, on pathways to retirement and on the relationship between actual health status and disability take up. We find that institutional differences between countries explain much of the cross-national differences in work and retirement, while differences in health and demographics play only a minor role.