1,721,005 research outputs found
The Italian gender gap in pensions: A cohort of birth approach
No full textIntroduction: The text discusses the gender pension gap in rich countries, focusing specifically on Italy. The paper delves into the evolution of this gap across different generations, analyzing social security reforms and their impact on retirement incomes. The study emphasizes the importance of understanding these disparities for designing effective pension systems that address gender inequalities and ensure well-being in retirement.
Objective: The aim of the article is to investigate the gender pension gap, specifically in the
context of Italy, by analyzing the factors contributing to this disparity, including late entry into the job market, wage gaps, and caregiving responsibilities. The study focuses on understanding the impact of social security reforms and the pension system on these gender inequalities, aiming to provide insights for the design of equitable pension systems.
Materials and methods: The article utilized administrative data from the Italian National
Institute for Social Security (INPS) covering pension payments from 1995 to 2022. The study employed a cohort perspective, analyzing the evolution of the gender pension gap across generations and examining the impact of social security reforms and labor market arrangements.
Results: The main conclusion of the study indicates that while the absolute gender disparity in mean retirement income has increased across cohorts of Italian retirees born between 1930 and 1954, the relative gender gap, when considering men’s average pension, has decreased over time. Additionally, the impact of survivor’s benefits has been significant in reducing the gender disparity in pensions, particularly in the later stages of life. Furthermore, the study found that the impact of social security reforms in Italy has been limited, primarily affecting the youngest cohorts, with most retirees still relying on the dominant defined benefit component for their pensions
Financial literacy and subjective expectations questions: A validation exercise
No full textI use subjective expectations data on future asset returns from the Italian Survey of Household Income and Wealth to validate widely used financial literacy questions. I argue that financial literacy and the willingness to answer these expectations questions are conceptually related constructs. In fact, both build on financial knowledge and skills and on confidence to use that knowledge. From the estimation of simple probit models, I find evidence of positive correlation between responding expectations questions and answering correctly the questions used to appraise individual financial literacy. If these latter questions captured just numeracy or generic cognitive skills, the size and significance of their coefficients would go to zero when one controls for formal education. This is not the case, which suggests that they capture knowledge and skills that may indeed be at the basis of financial competence. Besides this, the likelihood of answering correctly these questions does not seem to depend on individual information on the state of the economy and finance. Furthermore, based on decomposition analysis, I find that the questions with the largest information content are those eliciting knowledge and skills which are at the basis of day-to-day financial decision making. Implications are finally drawn for the literature
The Forgone Gains of Incomplete Portfolios
No full textThis article proposes a test for the cost-based explanation of nonparticipation, by
estimating a lower bound to the forgone gains of incomplete portfolios; these are in turn a lower bound to the costs that could rationalize nonparticipation in financial markets: high bounds would imply implausibly high costs. Assuming isoelastic utility
and a relative risk aversion of three or less, for the stock market I estimate an average lower bound of between 0.7 and 3.3 percent of consumption. Since total annual (observable plus unobservable) participation costs are likely to exceed these bounds, the cost-based explanation is not rejected by this test
Does Wealth Affect Consumption? Evidence for Italy
No full textThis paper analyzes the dynamics of Italian households’ net worth over the 1990s and assesses the strength of the wealth effects on consumption, using as a benchmark the United States. Overall, wealth effects in Italy appear to be small and unlikely to be direct. Financial wealth effects have been small because Italian households are not large scale owners of financial assets, even though their marginal propensity to consume out of financial wealth lies close to that reported for the US. By contrast, housing market effects have been small, despite widespread homeownership, because the marginal propensity to consume out of real assets is very low
Risk Aversion, Wealth, and Background Risk
Full text linkWe use household survey data to construct a direct measure of absolute risk aversion based on the maximum price a consumer is willing to pay for a risky security. We relate this measure to consumers.endowments and attributes and to measures of background risk and liquidity constraints. We .nd that risk aversion is a decreasing function of the endowment. thus rejecting CARA preferences. We estimate the elasticity of risk aversion to consumption at about 0.7, below the unitary value predicted by CRRA utility. We also .nd that households. attributes are of little help in predicting their degree of risk aversion, which is characterized by massive unexplained heterogeneity. We show that the consumer.s environment affects risk aversion. Individuals who are more likely to face income uncertainty or to become liquidity constrained exhibit a higher degree of absolute risk aversion, consistent with recent theories of attitudes toward risk in the presence of uninsurable risk
The Stock Market, Housing and Consumer Spending: A Survey of the Evidence on Wealth Effects
No full textHeterogeneity in Financial Market Participation: Appraising its Implications for the C-CAPM
No full textThis paper presents empirical evidence that accounting for heterogeneity in financial market participation is important for evaluating the empirical performance of the Consumption-based Capital Asset Pricing Model (C-CAPM). Using the U.S. Consumer Expenditure Survey as a common testing ground, I re-assess three well-known characterizations of the 'equity premium puzzle': (i) the inconsistency of the representative agent's IMRS with Hansen and Jagannathan bounds; (ii) Mehra and Prescott's calibration of a large representative agent's risk aversion; (iii) Hansen and the Singleton's large structural estimates of the preference parameters based on aggregate data. In all three cases, the estimates of risk aversion conditional upon financial market participation are not as far from reasonable values as the corresponding unconditional ones. The differences suggest that part of the 'equity premium puzzle' can be accounted for by the use of a 'representative agent' assumption rather than a more appropriate 'representative stockholding agent' assumption. Copyright 2004, Oxford University Press.
A Note on the Validation of Financial Literacy Questions
No full textI use expectations data to validate the financial literacy measures that researchers and policy makers use and draw methodological implications for survey design
Intertemporal Consumption Choices, Transaction Costs and Limited Participation in Financial Markets: Reconciling Data and Theory
No full textThis paper builds a unifying framework based on the theory of intertemporal consumption choices that brings together the limited participation-based explanation of the Consumption Capital Asset Pricing Model’s poor empirical performance and the transaction costs-based explanation of incomplete portfolios. Using the implications of the consumption model and observed household consumption and portfolio choices, we identify the preference parameters of interest and a lower bound for the costs rationalizing non-participation in financial markets. Using the US Consumer Expenditure Survey and assuming isoelastic preferences, we estimate the coefficient of relative risk aversion at 1.7 and a cost bound of 0.4% of non-durable consumption.
Our estimate of the preference parameter is theoretically plausible and the bound sufficiently small to be likely to be exceeded by the actual total (observable and unobservable) costs of participating in financial markets
Household Savings in the USA
No full textIn this paper we study the saving behaviour of U.S.A. households.
We use micro data from the Consumer Expenditure Survey
from 1982 to 1995. We employ synthetic cohort techniques
to characterize the life cycle profile of saving rates and other variables of interest. In particular, we pay attention to the
distinction between mandatory saving and discretionary saving.
We then relate our evidence to the recent policy debate on saving incentives and their usefulness
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