THE ROLE OF FINANCIAL LITERACY IN DETERMINING RETIREMENT PLANS

Workers nearing retirement face many important, and often irreversible, choices. We collected detailed demographic and financial literacy data on over 1,500 workers nearing retirement at three large companies to assess how individuals are planning for retirement. Many respondents display limited knowledge and understanding of public and company‐provided retirement benefits. Controlling for basic demographics and wealth, we find that misconceptions about eligibility ages and plan generosity influence workers' expected age of retirement. Although retirement‐related decisions will affect workers' well‐being for the remainder of their lifetimes, many do not possess enough basic financial knowledge to confidently make optimal choices. (JEL J26, J320, J240)     

Are baby boomer women redefining retirement?

As the baby boomers enter later life, unprecedented numbers of women are retiring. The first generation of women to encounter retirement since its institutionalisation as an expected male life course transition in the mid‐20th century, these women are leaving the labour force at a time when the meanings associated with “retirement” are changing. Longer life expectancy, improved health outcomes, and transformations in work driven by globalisation have produced greater diversity in when, why, and how people exit the labour force. Many boomer women are disadvantaged in later life by their histories of discontinuous employment and care‐giving. Consequently, we argue, opportunities to engage in “retirement” projects of their own choosing are unequal across this population. This essay reviews qualitative studies in sociology that examine boomer women's experiences of retirement and is organised in terms of the three main approaches that inform this under‐studied field: critical/feminist gerontology, identity theory, and life course approaches. Based on our review, we posit the need for socially inclusive research, beyond the prevailing emphasis on White, middle‐class professional women; more studies examining the impact of earlier life course transitions on women's later years; and attention to the effects of “successful ageing” discourses on women's lived experiences.     

Post-employment covenants in the United States: Legal framework and market behaviours

In response to fundamental market changes that are giving labour a much more central role in product market competition, employers often seek to extend their control over human capital beyond termination of the employment relationship. Although empirical studies are scarce, the use of restrictive post‐employment covenants is indeed believed to be widespread. But to what extent can employers lawfully restrict the freedom of their former employees? The author examines the criteria that courts in the United States have considered in balancing employers' legitimate economic interests against labour market efficiency and workers' post‐employment freedom and mobility.     

Permanent liminality: The impact of non‐standard forms of employment on workers' committees in Israel

Workers' committees in Israel are adapting to the neoliberal economy, and the resulting changes in the labour market, by increasingly accepting various non‐standard forms of employment. At the same time, however, they are resisting this reconfiguration of the capitalist economy, in an effort to safeguard workers' rights. Torn between the two positions, workers' committees find themselves in a state of permanent “liminality”, their role reduced to merely seeking compromises and ad hoc solutions. As a result, opposition to the adverse effects of non‐standard employment remains localized and fragmented, thereby consolidating such employment arrangements.     

Using Work Values to Predict Post‐Retirement Work Intentions

Work values might be proximal predictors of individuals' late‐career intentions because they serve as guiding principles for the selection, evaluation, and justification of vocational behavior. The purpose of this study was to examine the relationship between work values and post‐retirement work intentions. The authors investigated individual work values within the structure of 4 higher order values elaborated on by Schwartz et al. ( 2012 ). Relationships between work values and 4 types of post‐retirement work intentions were examined. Data from 1,071 employees of a German logistics company were used to test the hypotheses. The results of a structural equation model indicated that work values were differentially related to the 4 types of post‐retirement work intentions. The identified work value–work type combinations add to the literature on post‐retirement work. Practice implications for promoting positive individual and organizational outcomes are drawn from the results.     

Informality and Contributory and Non‐Contributory Programmes. Recent Reforms of the Social‐Protection System in Uruguay

Several countries in Latin America are expanding their social‐protection systems. There is an on‐going debate about the trade‐offs implied by these expansions, and by the resulting interactions between contributory and non‐contributory programmes with informality in the labour market. This article analyses the potential incentive effects for formal and informal employment from a set of social‐protection reforms implemented in Uruguay in the 1990s and 2000s. It presents empirical evidence of the expansion of health insurance to formal workers' dependants, and finds that this reform significantly increased formal employment. Finally, it discusses possible alternatives to extend social‐protection systems while maintaining incentives for formal work in Latin America's labour markets.     

EMPLOYMENT AND DEADWEIGHT LOSS EFFECTS OF OBSERVED NONWAGE LABOR COSTS

To assess the employment effects of labor costs, it is crucial to have reliable estimates of the labor cost elasticity of labor demand. Using a matched firm‐worker data set, we estimate a long‐run unconditional labor demand function, exploiting information on workers to correct for endogeneity in the determination of wages. We evaluate the employment and deadweight loss effects of observed employers' contributions imposed by labor laws (health insurance, training, and taxes) as well as of observed workers' deductions (social security and income tax). We find that nonwage labor costs reduce employment by 17% for white collars and by 53% for blue collars, with associated deadweight losses of 10% and 35% of total contributions, respectively. Since most firms undercomply with mandated employers' and workers' contributions, we find that full compliance would imply employment losses of 4% for white collars and 12% for blue collars, with respective associated deadweight losses of 2% and 6%. (JEL J23, J32)     

Using a Political Economy and Life Course Approach to Understand Gendered Pension Provision in the UK

The future sustainability of pensions has gained considerable international attention over recent years. These concerns have been fuelled by increasing longevity and rising pension deficits. In addition there has been further awareness of the extent of female pensioner poverty. In order to explore this situation a suitable analytical framework is required. As pensions received in retirement are dependent on earlier events in individuals’ lives, most notably their employment history, this paper explores the need for a life course approach to examine the gendered nature of pensions in the UK. Initially the life course approach, a key mode of analysis in political economy theory, is defined. It is then used to examine the notion of the changing ‘institution’ of retirement and its subsequent de‐standardisation. Then, linked to the political economy approach, it is utilised to introduce ways in which employment experiences of men and women impact upon inequalities in retirement. Finally, the article concludes that by employing such an approach to understanding pensions it enables a better appreciation of savings behaviour and opportunities.     

Laboring under Uncertainty: Identity Renegotiation among Contingent Workers

Relying on interviews with contingent workers in diverse jobs, this article explores the motivations underlying worker consent, in particular, workers' commitment to employers who did little to encourage it. Driven by the need to address the “spoiled identity” problem brought on by contingent employment, workers engaged in identity‐management strategies that included the following: defining a willingness to work hard rather than the job per se as determinative of personal value, asserting an alternative vocation as one's appropriate identity‐conferring occupation, and aligning with managers as a reference group. These strategies had the ideological effect of reaffirming a managerial ideology that hampered the ability to formulate a critique of existing employment relations. A much smaller group, made up of disillusioned day laborers with few illusions about middle‐class respectability, rejected identity‐management strategies and regarded their relationship with employers in the purely instrumental terms that the business press assumes would apply to all workers. The article concludes that cultural lag and the raw appeal of the notion of a caring employer may underlie the persistence of the accommodationist orientations displayed by most of these workers.     

Retirement and marital decision making: Effects on retirement satisfaction

This study explores how partner's employment and preretirement decision‐making structures affect retirement satisfaction, using pooled data from Waves 1 to 4 of the Health and Retirement Surveys. Based on resource theory, the analyses indicate that retired husbands are least satisfied if their wives remain employed and had more say in decisions prior to the husband's retirement. Retired wives are least satisfied if their husbands remain employed and had more say in decisions prior to the wife's retirement. These results suggest that retirement transitions undermine married retirees’ satisfaction if they enhance the other partner's influence in the relationship. More research should address linkages between work and family realms during transitions such as retirement and explore the negotiation processes surrounding such transitions.     

Labour Contracting and Changing Employment Relationships in South Korea

Not only has there been a growth in the utilisation of non‐standard workers in South Korea in recent years, but a qualitative shift has also occurred in the nature of contracting practices. This article attempts to improve understanding of this trend by shedding light on the contradictory nature of the contracting system, while also addressing problems associated with the deployment of an external labour force with fewer employment entitlements on user‐firm sites, and the implications of these phenomena for employment practices and workers' rights.     

Work and Family in the 1990s

This review highlights four themes emerging from the work and family literature of the 1990s. The first theme evolves from the historical legacy of the maternal employment literature with its focus on children's well‐being. The second theme, work socialization, is based on the premise that occupational conditions, such as autonomy and complexity, shape the values of workers who in turn generalize these lessons off the job. Research on work stress, the third theme, explores how experiences of short‐ and long‐term stress at work make their mark on workers' behavior and well‐being off the job. Finally, the multiple roles literature focuses on how individuals balance roles, such as parent, spouse, and worker, and the consequences for health and family relationships. In addition to these four major themes, advances in work and family policy initiatives over the past decade are discussed. Suggestions for future research focus on addressing issues of causality, attending to the complexity of social contexts, linking research to policy, and developing interdisciplinary theories and research designs.     

Retirement and risk: the individualisation of retirement experiences?

A climate of uncertainty and risk exists in the field of retirement and pensions. Many employers have modified their pension schemes shifting the financial risk onto employees. Many individuals with private pensions have watched the value of their savings diminish. Added to this, the trend toward early retirement before state pension age has destabilised the traditional life course notion of a fixed retirement age, (especially for men). As a result, the concept of retirement itself has become more unpredictable and difficult to define. In this article we examine the extent of the individualisation of retirement experiences by reference to a study of retirement transitions in two organisations. The research investigated the influences on people's retirement decisions and the extent to which they experienced choice and control over how and when they retired. It is possible to identify a pattern of individualisation in contrast to its opposite of a mass transition into retirement, collectively understood and embedded in formal, institutionalised arrangements. However, underlying this fragmentation of experience there are clear structural patterns. The form that structured individualisation took here, was less to increase the majority of people's range of alternatives and choices over when and how to retire and more to enlarge the range of risks they had to cope with.     

The role and relevance of domain knowledge, perceptions of planning importance, and risk tolerance in predicting savings intentions

The need for individuals to increase retirement savings has been widely promoted, yet our understanding of the motivations of individuals to save at a higher rate remains sparse. This paper reports the findings of a survey of 2300 retirement savings fund members and their motivations to contribute more to savings and to actively manage their investment strategy. Utilising the theory of planned behavior, the study reveals respondent’s self-reported attitudes, subjective norms and perceptions of behavioral control account for a high proportion of the variance in behavioral intention. Contrary to expectations, the study finds that respondent’s risk tolerance adds little to the prediction of behavioral intention. By contrast, perceptions of planning importance and self-assessed planning preparedness (domain knowledge) are found to exert powerful indirect influences on behavioral intentions via the perceived behavioral control construct. This novel finding confirms the relevance of planning constructs and financial literacy to an understanding of retirement savings behavior, and establishes a need to improve levels of financial literacy in society.     

Foreign Employers as Relief Routes: Women,Multinational Corporations and Managerial Careers in Japan

This article argues that multinational corporations may provide critical relief routes for women workers' progress in managerial careers in national contexts where their career paths with domestic employers remain blocked by traditional and institutional practices. It illustrates this possibility through a study of two women managers at the local head office of a foreign‐owned multinational retailer in Japan and their career trajectories. The alternative career paths through foreign employers are not without their contingencies and constraints, and the article identifies the limitations of the transformative potential foreign employers could have in the larger realm of women's managerial employment in a restrictive context such as Japan. Noting that globalization incorporates different groups of workers into the global economy with different costs and rewards, the article concludes by calling for a more nuanced understanding of women's employment with multinationals and for further research that remains cognizant of the multiplicity of experiences in different contexts.     

SALARIES OR PIECE RATES: ON THE ENDOGENOUS MATCHING OF HARVEST WORKERS AND CROPS

The objective of this paper is to determine whether the choice of payment schemes (hourly vs. piece rates) is systematically related to the workers' risk aversion and ability. We derive the equilibrium relationship between agents' risk aversion and ability and the power of incentives (payment scheme) in a market where many heterogeneous principals and agents are endogenously matched. The equilibrium matching between principals and agents depends on the traits and is critical in determining the contract choice. Using confidential data from the National Agricultural Workers Survey (NAWS), we find evidence of matching between agricultural workers and the riskiness of their jobs (crops they harvest) based on workers' risk aversion and no matching based on ability. When controlling for matching, we find strong evidence that high risk‐averse workers choose hourly rates and low risk‐averse workers choose piece rates. We also found that high ability types choose piece rates and low ability types choose hourly rates but the evidence is weaker. (JEL J33, D82, Q12)     

The effect of education on unemployment duration

Exploiting the variation in education induced by a reform that compelled individuals to obtain additional schooling in Turkey, and using administrative unemployment insurance (UI) records, we show that high-educated unemployed workers, compared to their low-educated counterparts, use unemployment benefits longer, and they are less likely to find employment before their benefit periods expire. This suggests education increases one's selectiveness over jobs. We also show benefit generosity impacts the high- versus low-educated differentially. Extended benefits increase low-educated workers' probability of finding employment more than the high-educated. Our findings highlight the importance of considering worker attributes when designing the UI system.     

Australian Mandatory Retirement Challenged

Australia experienced declines in older workers' participation in the labor force similar to that of the United States during the 1970s, but it has taken more than 10 years to enact the same policy changes in age discrimination in employment. In order to promote a considered internationalism as opposed to parochialism in policy, this paper considers two questions about this case, namely, "Why did Australia take so long to change?" and "What has been learned from the North American experience?" On the first question, it is argued that Australians are beginning to move only slowly from a European view of retirement as leisure in "old age" towards the more active notions in North America and among its Asian neighbors. Elites in government are responding to a growing political consciousness among the seed seeking a new deal in rights of a access to work and other activities. On the second question, it is argued that the North American experience leads us to moderate strong claims about age discrimination and to be less optimistic about major improvements in older workers' participation arising from legislation outlawing age discrimination. This evidence has reduced the contentiousness of the issue in Australia and allowed focus on the more practical issues of how to make the legislation work to protect the rights of older people.     

Social,Economic and Demographic Consequences of Migration on Kerala

Migration has been the single most dynamic factor in the otherwise dreary development scenario of Kerala during the last quarter of the last century. It has contributed more to poverty alleviation and reduction in unemployment in Kerala than any other factor. As a result of migration, the proportion of the population below the poverty line has declined by 12 per cent. The number of unemployed persons – estimated to be only about 13 lakhs in 1998 compared with 37 lakhs reported by the Kerala Employment Exchanges – has declined by over 30 per cent. Migration has caused nearly a million married women in Kerala to live away from their husbands. Most of these so‐called “Gulf wives” experienced extreme loneliness to begin with, and were burdened with added family responsibilities to which they had not been accustomed when their husbands were with them. But over a period, and with a helping hand from abroad over the ISD, most came out of their early gloom. Their gain in autonomy, status, management skills and experience in dealing with the world outside their homes were developed the hard way and would remain with them for the rest of their lives for the benefit of their families and society. In the long run, the transformation of these million women will have contributed more to the development of Kerala society than all the temporary euphoria created by remittances and modern gadgetry. Kerala is dependent on migration for employment, subsistence, housing, household amenities, institution building, and many other developmental activities. The danger is that migration could cease, as shown by the Kuwait war of 1993, and repercussions could be disastrous for the State. Understanding migration trends and instituting policies to maintain the flow of migration is more important today than at any time in the past. Kerala workers seem to be losing out in international competition for jobs in the Gulf market. Corrective policies are needed urgently to raise their competitive edge over workers in competing countries in South and South‐East Asia. Like any other industry, migration from Kerala needs periodic technological upgrading of workers. Otherwise, there is a danger that the State might lose the Gulf market permanently. The crux of the problem is Kerala workers' inability to compete with expatriates from other South and South‐East Asian countries. The solution lies in equipping workers with better general education and job training. This study suggests a twofold approach. In the short run, the need is to improve the job skills of prospective emigrant workers. This could be achieved through ad hoc training programmes focussed on the job market in Gulf countries. In the long run, the need is to restructure the educational system, taking into consideration the future demand of workers not only in Kerala but also in potential destination countries all over the world, including the US and other developed countries. Kerala emigrants need not always be construction workers in the Gulf countries; they could also be software engineers in developed countries.     

WHY DON'T ELIGIBLE FIRMS CLAIM HIRING SUBSIDIES? THE ROLE OF JOB DURATION

Only a small fraction of firms that hire disadvantaged workers claim the federal subsidies for which they qualify, namely, the Work Opportunity Tax Credit (WOTC) and Welfare‐to‐Work Tax Credit (WtW). Subsidy benefits depend partially on job duration, with higher subsidy rates above certain job‐duration thresholds. I estimate the relationship between a firm's WOTC/WtW participation and its eligible workers' job durations. Using unique Wisconsin administrative data, I find that workers' subsidy rates (determined by hours worked) have the expected relationship to participation: Firms with a larger fraction of workers exceeding the programs' job‐duration thresholds are more likely to claim the WOTC/WtW. I also find no evidence that firms systematically modify the job duration of their workers to maximize subsidy payments. (JEL J3)