Projecting a Life-cycle Income – a Simulation Model for the Slovak Pension Benefit Statement
Ján Šebo
Faculty of Economics, Matej Bel University in Banská BystricaDaniela Danková
Faculty of Economics, Matej Bel University in Banská BystricaIvan Králik
Faculty of Economics, Matej Bel University in Banská BystricaResumen
The introduction of a regulation requiring pension asset managers to provide savers with an estimation of pension benefits opened a wide range of scientific questions on the projection methods and estimation of input parameters. One of them is the estimation of life-cycle income for calculating expected contributions and the estimation of the benefit ratio at the moment of retirement. We present an estimation of life-cycle income functions for various age and educational cohorts influenced by temporary labor market shocks. By employing the resampling simulation method for incorporating macroeconomic shocks, we have shown that using longitudinal data on the income process from a large closed economy could bring valid results for a country with a small open economy as well where the longitudinal data on income processes of individuals are unavailable. Our findings could serve a practical use when pension or other social benefits tied to individual income should be modelled.
Palabras clave:
microsimulation, pension benefits, life-cycle income, labor market shocksAgencias de apoyo
Citas
Balco, M., Šebo, J., Mešťan, M., & Šebová, Ľ. (2018). Application of the Lifecycle Theory in Slovak Pension System. Journal of Economics, 1(66), 64-80. Google Scholar
Cooper, D. (2014). The Effect of Unemployment Duration on Future Earnings and Other Outcomes. Working Papers 13-8, Federal Reserve Bank of Boston. Google Scholar
Faber, H.S. (1998). Are lifetime jobs disappearing? Job duration in the United States: 1973–1993. Chicago: University of Chicago Press. Google Scholar
Fodor, J., & Cenker, J. (2019). Default strategy in pension saving. The case of Slovakia. Economics analysis, 51. Institute for Financial Policy - Ministry of Finance of Slovak Republic. Retrieved from https://www.finance.gov.sk/sk/financie/institut-financnej-politiky/publikacie-ifp/ekonomicke-analyzy/51-default-strategy-pension-savings-case-slovakia.html. Google Scholar
Guvenen, F. (2009). An empirical investigation of labor income processes. Review of Economic Dynamics, 12(1), 58-79.
Crossref
Google Scholar
Guvenen, F., & Smith, A. (2014). Inferring labor income risk and partial insurance from economic choices. Econometrica, 82(6), 2085-2129.
Crossref
Google Scholar
Guvenen, F., Karahan, F., Ozkan, S., & Song, J. (2015). What Do Data on Millions of U.S. Workers Reveal about Life-Cycle Earnings Risk? Reports number 710, Federal Reserve Bank of New York Staff.
Crossref
Google Scholar
Haider, S., & Solon, G. (2006). Life-Cycle Variation in the Association between Current and Lifetime Earnings. American Economic Review, 96(4), 1308-1320.
Crossref
Google Scholar
Jarmołowicz, W., & Kuźmar, S. (2017). Employment and Labour Productivity vs Economic Development of Polish Regions (2000–2013). Olsztyn Economic Journal, 12(3), 233-245. https://doi.org/10.31648/oej.2808.
Crossref
Google Scholar
Julian, T., & Kominski, R. (2011). Education and Synthetic Work-Life Earnings Estimates. American Community Survey Reports. ACS-14. Washington, DC: U.S. Census Bureau. Google Scholar
Katz, L.F., & Murphy, K.M. (1992). Changes in relative wages, 1963–87: Supply and demand factors. Quarterly Journal of Economics, 107, 35-78.
Crossref
Google Scholar
Lagakos, D., Moll, B., Porzio, T., Qian, N., & Schoellman, T. (2018). Life Cycle Wage Growth across Countries. Journal of Political Economy, 126(2).
Crossref
Google Scholar
Low, H., Meghir, C., & Pistafferi, L. (2010). Wage risk and employment risk over the life cycle. American Economic Review, 100(4), 1432-1467.
Crossref
Google Scholar
Mincer, J. (1958). Investment in Human Capital and the Personal Income Distribution. Journal of Political Economy, 66, 281-302.
Crossref
Google Scholar
Raymo, J.M., Warren, J.R., Sweeney, M.M., Hauser, R.M., & Ho, J.H. (2010). Later-life Employment Preferences and Outcomes: The Role of Mid-life Work Experiences. Research on Aging, 32(4), 419-466.
Crossref
Google Scholar
Skrętowicz, B., & Wójcik, M. (2016). Unemployment in Selected EU Countries. Olsztyn Economic Journal, 11(3), 211-226. https://doi.org/10.31648/oej.2926.
Crossref
Google Scholar
The 2018 Ageing Report: Economic and Budgetary Projections for the EU Member States (2016-2070). (2018). Institutional Paper 079. May 2018. Brussels: European Commission. https://doi.org/10.2765/615631. Google Scholar
US Business Cycle Expansions and Contractions. (2018). National Bureau of Economic Research. Retrieved from https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions (5.09.2020). Google Scholar
Faculty of Economics, Matej Bel University in Banská Bystrica
Faculty of Economics, Matej Bel University in Banská Bystrica
Faculty of Economics, Matej Bel University in Banská Bystrica
Licencia
![Creative Commons License](http://i.creativecommons.org/l/by-nc-nd/4.0/88x31.png)
Esta obra está bajo una licencia internacional Creative Commons Atribución-NoComercial-SinDerivadas 4.0.
An Author declares that his paper has not been published before (under the same or another title, or is a part of another publication) and does not infringe copyrights of other persons**. At the same time, the Author transfers to the Publisher the exclusive right to publish and to circulate this work in print in the form of a non-serial journal publication and in a form of an electronic publication.
The journal is available on Creative Common license CC-BY-NC-ND