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Welfare Reform on the Web (May 2012): Pensions - overseas

The increasing labor force participation rates of older workers and its effect on the income of the aged

M.V. Leonesio and others

Social Security Bulletin, vol.72, no.1, 2012, p. 59-77

For much of the past two decades, public officials and financial planners in the US have encouraged people to work longer and to delay claiming state pension benefits. This strategy shortens the retirement period that needs to be funded and can generate additional savings. The evidence presented in this article indicates that earnings have indeed become a much greater share of total income of the older population since the mid-1990s. Around the middle of the 1980s, labour force participation rates for older men ended a downward trend that had endured since World War II. After stabilising for about a decade they began to rise by the mid-1990s. The increased labour force participation is associated with substantial increases in the labour market earnings of the older population, particularly among those aged 65-74, and especially among Social Security beneficiaries. This article discusses the emerging importance of earnings as an income source for older Americans and the factors that may be driving this change.

The privatisation of pensions: risks and opportunities

M. Hyde (guest editor)

Journal of Comparative Social Welfare, vol.28, 2012, p. 91-177

This special issue is concerned with the impact of the privatisation of pensions on societal and individual wellbeing. It seeks to evaluate privatisation in terms of a specific conception of the public interest, one which requires egalitarian distributive outcomes to facilitate social solidarity. It has long been argued that the market cannot be relied on to distribute income in ways that are equitable and just. The broad conclusion of this special edition is that the case against the privatisation of pensions has been overstated. Privatisation can generate risks , but can also produce opportunities for new and more sustainable ways of financing retirement benefits, for providing where the state is unable to provide, for promoting accountable institutional arrangements, and for augmenting individual rights. Provided that they are appropriately designed and regulated by the state, and supplemented by adequate statutory provision, private pension arrangements can generate the inclusive, trust-building outcomes that are traditionally associated with welfare states.

This is not your parents' retirement: comparing retirement income across generations

B.A. Butrica, K.E. Smith and H.M. Iams

Social Security Bulletin, vol.72, no.1, 2012, p. 37-58

This article examines how retirement income at age 67 is likely to change for baby boomers and persons born in generation X compared with current US retirees, using the Social Security Administration's Modeling Income in the Near Term (MINT) microsimulation model. Future retirees are projected to have higher incomes and lower poverty rates, and so their prospects look better than current retirees in absolute terms. However, future retirees are also projected to have lower replacement rates, and so their prospects are actually worse than current retirees in relative terms. Gains in retirement income largely go to higher socioeconomic groups, leading to rising retirement income inequalities.

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