Should Old-Age Benefits Be Earnings-Tested? We study the welfare effects of earnings testing flat-rate old-age benefits in a quantitative overlapping generations model with idiosyncratic labor income risk. In our model economy, even a moderate earnings testing reduces individuals’ expected lifetime utility, whenever other taxes are taken into account. Moreover, it also lowers the realized lifet...

Abstract This paper examines racial disparities in mortgage processing time prior to the global financial crisis. We find that Black borrowers are underrepresented and experience a longer than white among mortgages securitized by government-sponsored enterprises (GSEs). At same time, borrower overrepresented face similar privately (PLS) mortgages. Additionally, strongly associated with faster s...

In this paper I discuss the role a progressive income tax system and a redistributive pay as you go (PAYGO) social security system can play in insuring and reallocating idiosyncratic as well as aggregate risk. I also argue that the underlying source of market failures generating such a role for government intervention may be crucial when determining the normative consequences of such social ins...

This paper examines retirement behaviour and household income for older persons in Chile. It pays close attention to the sources of household income, income inequalities, and the economic vulnerability of older persons. This is important in order to evaluate whether labour market and social security reform in Latin America will improve the welfare of older groups, and especially their vulnerabi...

Rent extraction by public sector workers may be limited by the ability of taxpayers to vote with their feet. But rent extraction may be higher in regions where high amenities mute the migration response. This paper develops a theoretical model that predicts such a link between public sector wage differentials and local amenities, and the predictions are tested by analyzing variation in these di...

Disclosure of private medical information allows insurance companies to better predict medical expenditures. The premiums the companies charge the insured employees reflect these expenditures. This paper studies incentives of employees to disclose their medical information. I find that healthier employees prefer to disclose medical information that results in a disclosure plan having a lower pr...

We study the effect of incorporating heterogeneity into default rules by examining the choice between retirement plans at a firm which transitioned from a defined benefit (DB) to a defined contribution (DC) plan. The default plan for existing employees varied discontinuously depending on their age. Employing regression discontinuity techniques, we find that the default increased the probability...

This paper examines household decisions about whether or not to annuitize retirement resources. A lifecycle model of consumption, implemented with the use of dynamic programming techniques, is used to construct a utility-based measure of annuity value for individuals and couples in the Health and Retirement Survey. Variation in the calculated “annuity equivalent wealth” arises from differences ...