Previous literature on social security reform has used a variety of period utility functions and calibrated values for the intertemporal elasticity of substitution (IES) in labor. In this paper, we extensively study various preferences and values for IES in a general equilibrium model with...

We study the relative importance of market governance and non-market governance in retirement investments using a sample of variable annuities. Variable annuity investors are significantly less sensitive to performance and fees than mutual fund investors. Consistent with a complementary role of...

A potential component of the administration’s Social Security proposal is to shift from “wage indexing” of benefits to “price indexing.” This change sounds modest, but, in fact, would change the nature of the Social Security program. Price indexing would preserve the purchasing power...

Saving is a critical component of both retirement security for individuals and the long-term growth of the nation’s economy. Current trends in Social Security, 401(k) plans, and personal saving suggest that individuals will need to save more to ensure that they can enjoy a comfortable...

The S&P 500 Index dropped more than 40 percent between March 2000 and March 2003, and almost anyone who entrusted their retirement savings to the bull market of the late 1990s saw their portfolio shrink, often in dramatic fashion. Now that the stock market is regaining some of its lost value,...

In the past year, as the economy has weakened and unemployment has risen, the labor force participation rate for older workers (aged 55-64) has jumped by 2.0 percentage points - an increase unprecedented in post-war U.S. economic history. Recessions typically see very slow or even negative...

Over the past two decades, private pension coverage has shifted from defined benefit plans to 401(k) plans. This shift has many important implications for the retirement security of older Americans. One so-far-overlooked consequence is that it has changed the relative price of annuities for men...

As just reiterated in the 2005 Trustees Report, Social Security faces a 75-year deficit equal to roughly 2 percent of taxable payrolls. Closing this gap requires either a cut in benefits or an increase in taxes. One approach to cutting benefits under consideration by the administration is to...

Over the last 20 years, pension coverage has shifted from defined benefit plans, where benefits are based on years of service and final salary and generally paid as an annuity, to 401(k) plans, where individual and employer contributions and earnings on those contributions are awarded as a lump...

The fact that American households have debt is not a surprise: credit cards finance our purchases, car loans pay for our wheels, student loans help us with tuitions, and mortgages buy our homes. Yet the size of the debt can seem shocking. The aggregate burden runs to nearly $10 trillion, nearly...