UMD Theses and Dissertations
Permanent URI for this collectionhttp://hdl.handle.net/1903/3
New submissions to the thesis/dissertation collections are added automatically as they are received from the Graduate School. Currently, the Graduate School deposits all theses and dissertations from a given semester after the official graduation date. This means that there may be up to a 4 month delay in the appearance of a given thesis/dissertation in DRUM.
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Item Essays on the Determinants of Pension Savings and Retirement Management Decisions(2011) Lara-Ibarra, Gabriel de Atocha; Kearney, Melissa S; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In recent years, governments have become increasingly concerned about the low levels of households wealth accumulation upon retirement, and the capacity of individuals to keep the standard of living they had during their working lives. Among the reasons behind these concerns are the high relative poverty rates among elderly households, the low replacement rates provided by compulsory pension systems, and the higher responsibility placed on individuals to fund their retirement due to changes in pension systems and the increased complexity of financial instruments. Government officials in various countries have developed a series of policies that aim at encouraging retirement savings among the population. The evaluation of the effectiveness of such policies has been a continuous objective of economists. This dissertation contributes to the public economics literature in accomplishing this objective via two cases whose analysis will hopefully inform policy makers and help better design policies geared towards improving individuals' retirement wealth accumulation. In chapter 2, I investigate the effect of the introduction of tax free retirement accounts on the savings behavior of Mexican households. This chapter contributes empirical evidence to the debate about whether preferential tax treatment is an effective policy tool to encourage household savings. The empirical strategy is a difference-in-difference approach that utilizes an arguably exogenous change in access to tax free accounts for a well-defined set of workers. The data provide evidence of heterogeneous effects across demographic subgroups and across quantiles of the savings distribution that accord with predictions of a standard model of savings behavior. In particular, the data show an increase in the savings rate of treated workers in the year following the introduction of the accounts. The effect is driven by prime age workers and by high income workers. Among prime age workers, the lower savers experience the largest effects of the policy change. I perform multiple robustness checks on these findings, including estimating propensity score matching models and tests for potential confounding factors such as changes in retirement accounts' returns or fees, or changes in workers' income. In chapter 3, I analyze whether information framing related to the performance of Pension Funds Administrators affects the retirement management decisions of Mexican workers. I conduct a survey to collect information on recommendations for Fund Administrator made by Mexican workers when faced with randomly framed scenarios. The scenarios feature framing based on choice avoidance and framing exploiting loss aversion. I find evidence that reducing the number of possible choices increases the probability that individuals choose a Fund Administrator with a higher net return or with lower fees. A loss aversion framing increases the probability that individuals choose a Fund Administrator with a higher net returns. Finally, I find evidence that higher levels of financial literacy decrease the effects of framing on Fund Administrator choice.Item Three Essays in Public Finance(2007-08-01) Singleton, Perry Douglas; Duggan, Mark G; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Much of public economics research examines the public sector's use of policy to influence the behavior of individuals to achieve societal goals. Because there may be many different policies to achieve the same societal goal, public economists are generally concerned with policy efficiency: Which policy among many will yield the desired result with the least amount of distortion or welfare loss? The aim of these three essays is to contribute to this discussion by examining the intended and unintended consequences of contemporary social policy. The first essay estimates the elasticity of taxable earnings to taxation. Taxation may improve social welfare by redistributing income and to support public infrastructure. However, taxation may also generate disincentives to work; so as tax rates rise, the amount of income subject to taxation plausibly declines. Because the net effect of proposed tax reform on government revenue depends on how elastic taxable earnings are to taxation, the response of earnings to taxation is fundamental in assessing the efficiency of the US tax code. The second essay examines the impact of increasing the Social Security normal retirement age from 65 to 67 on the Social Security Disability Insurance (DI) rolls. Although increasing the full retirement age was intended to decrease program expenditures by providing incentives to delay the transition to retirement, the policy simultaneously increased the incentive to receive DI benefits. DI benefits are are generally more generous and received over a longer period of time relative to retirement benefits; so the effect of increasing the normal retirement age on program expenditures may be overstated if the rise in the DI rolls is not taken into account. The third and final essay examines a recent policy change to Title 38 which granted disability benefits to Vietnam veterans for diabetes considered {\em presumptively} related to herbicide exposure during military service. In this essay, we explore the impact of this policy on the rolls and expenditures of the VA disability compensation program.