Michela Coppola

Savings In Times Of Demographic Change: Lessons From The German Experience

Pension reforms in many developed countries make individuals shoulder a bigger share of longevity and income risks. The desired response is that individuals accumulate private assets for retirement. Whether this actually takes place, is of paramount relevance for scientists and policy makers. We take Germany as an example: Twenty years of pension reform have transformed the monolithic German pension system into a multipillar system. Formerly generous public pension benefits are gradually being reduced, whereas substantial incentives are granted to occupational and private saving schemes. Has this transition worked out? We survey the reform steps and households’ reactions: How did individuals adjust their labor market behavior? How did private and occupational pension plans take off? How do behavioral adjustments vary in the population? Most Germans adapted to the new situation. Both actual and expected retirement decisions changed and the share of households without supplementary pensions decreased from 73% to 39% in little more than a decade. This is a remarkable success. Nonetheless, households with low education, low income and less financial education did neither adjust their retirement behavior nor pick up supplementary pension plans and are thus likely to face difficulties in bridging the gap arising in future pension income.

How Sensitive are Subjective Retirement Expectations to Increases in the Statutory Retirement Age? The German Case

Population Aging poses an evident threat to the financial sustainability of pension systems based on a “pay-as-you-go†(PAYG) scheme. To cope with this threat, pension systems have undergone numerous reforms in many countries in order to keep people longer at work. One crucial element of these reforms typically is an increase in the statutory retirement age at which workers are legally allowed to retire. Two questions still remain unanswered: Will people really work longer? Who is more likely to retire before the new legal retirement age? In this paper, we focus on subjective retirement expectations, analysing if and to what extent they are affected by such a policy change. We consider the legislative reform introduced in Germany in 2007, which gradually will increase the statutory retirement age (SRA) from 65 to 67 years. Using the SAVE survey, a representative panel of German households, we estimate the increase of the individuals’ expected retirement age (ERA) as an effect of the reform. Our results show that less productive workers living in relatively wealthier households are more likely to plan an early retirement. The introduction of the reform seems to motivate better educated workers to remain longer in the labour force although it does not seem to completely succeed in keeping women longer in the labour force: especially among the younger cohorts, whose SRA will be 67 years, women are still more likely than men to plan an early retirement. In terms of the magnitude of the effect, we find that the reform shifted the expectations of the younger cohorts by almost two years – if these expectations will be realized, this reform would have been quite successful.

Is it All About Access? Perceived Access to Occupational Pensions in Germany

This paper provides an empirical analysis of what determines access to occupational pensions as perceived by workers. We investigate this issue in Germany, where workers have the legal right to an occupational pension since 2001, but many might lack the incentive or the ability to gather and process the relevant information to make use of their right. In particular, if workers rely exclusively on the information available at their firm, employers will continue to regulate access despite workers’ rights. Our findings suggest that the current regulation in Germany has not resolved the problem of workers’ ignorance of their access to occupational pensions. Only about half the workers are aware of having access to an occupational pension. We find that there is important heterogeneity in workers’ perceptions, and that this heterogeneity is directly related to worker and firm-side factors as well as outcomes of the employer-employee match. Distorted perceptions have important consequences for workers, policy makers and firms. Workers can only make optimal savings decisions if they are aware of their savings possibilities. Policy makers could help by making information material about occupational pensions mandatory and/or by defining standardised information. A low level of knowledge of employees might also be frustrating for employers, as this would suggest that workers do not appreciate their occupational pension, limiting the power of occupational pension as a Human Resources tool.

The biological standard of living and mortality in Central Italy at the beginning of the 19th century

The biological standard of living in Central Italy at the beginning of the 19th century is analyzed using newly collected data on the height of recruits in the army of the Papal States. The results reveal a decline in height for the cohorts born under French rule (1796-1815). Although this trend was common to many parts of Europe, the estimated magnitude of the decline suggests a worsening of the biological standard of living of the working classes in the Papal States even relative to that of other countries. Despite the differences in the economic systems within the Papal States, no significant geographical variation in height has been found: even the most dynamic and advanced regions experienced a dramatic height decline. Mortality also increased during the period under consideration.

Empirical Research on Households’ Saving and Retirement Security: First Steps Towards an Innovative Triple‐Linked‐Dataset

There is an increasing interest among social scientists in merging survey data with administrative records from social security institutions. Record linkage represents one way to combine different sources using a unique identifier such as the Social Security number. The informed consent of the respondents however is required, which in turn might induce bias to the consent question and even threaten stability in a panel study. Data from the longitudinal household survey “Saving and old†age Provision in Germany†(SAVE) are used for analysis of consent rates and patterns. In the latest wave of the study participants have been asked to provide their written consent to link their answers to administrative data from the Federal Employment Agency which also includes information on the respondents’ employers. The combined data set will open new avenues for research on the link between institutions, saving behavior and old†age provision: The survey data contains information on private pension and non†pension wealth which will be complemented by complete employment histories. Moreover, from the administrative data entitlements to public pensions can be derived, while an employer survey will shed more light on the diffusion of occupational pensions. SAVE is mainly conducted as a self†administered paper and pencil (P&P) questionnaire, while existing research is based on personal interviews. Given a response rate of 81% of the participants and a consent rate of 58%, asking for consent appears feasible in a P&P design. There is evidence for mild consent bias. However, considering correlations between giving the consent and a series of socio†demographic variables, as well as variables capturing respondents’ motivation and willingness can explain variation in the consent only to a small extent. We conclude that most of the variation is random.