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Social Science > Demography

You are looking at 1 - 10 of 24 items for :

  • Type: Journal Issue x
  • Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors x
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Cover IMF Working Papers
Prometheus Unbound: What Makes Fintech Grow?
Serhan Cevik
The rise of financial technologies—fintech—could have transformative effects on the financial landscape, expanding the reach of services beyond the confines of geography and creating new competitive sources of finance for households and firms. But what makes fintech grow? Why do some countries have more financial innovation than others? In this paper, I use a comprehensive dataset to investigate the emergence and spread of fintech in a diverse panel of 98 countries over the period 2012–2020. This empirical analysis helps ascertain economic, demographic, technological and institutional factors that enable the development of fintech. The magnitude and statistical significance of these factors vary according to the type of fintech instrument and the level of economic development (advanced economies vs. developing countries). Finally, these findings reveal that policies and structural reforms can help promote financial innovation and cultivate fintech ventures—particularly by strengthening technological and institutional infrastructures and reducing cybersecurity threats.
Keywords:
Fintech; financial innovation; technological change; cybersecurity threat; fintech venture; copyright page; government stability foster fintech growth; fintech transaction; Digital financial services; Financial sector development; Population growth; Europe
Cover IMF Working Papers
Satellite-Based Census of Residential Buildings: Application for Climate Risk Assessment
Andinet Woldemichael
and
Iyke Maduako
Housing represents the largest asset and liability, in the form of mortgages, on most national balance sheet. For most households it is their largest investment, and when mortgages are required also represents the largest component of household debt. It is also directly tied to financial markets, both the mortgage market and insurance sector. Although many countries have a rich set of housing censuses and statistics, others have large data gap in this area and therefore struggle to formulate effective policies. This paper proposes an approach to construct a global census of residential buildings using opensource satellite data. Such a layer can be used to assess the extent these buildings are exposed to climate hazards and how their production and consumption, in turn, affect the climate. The approach we propose could be scaled globally, combining existing layers of building footprints, climate and socioeconomic data. It adds to the ongoing effort of compiling spatially explicit and granular climate indicators to better inform policies. As a case study, we compute selected indicators and estimate the extent of residential properties exposure to riverine flood risk for Kenya.
Keywords:
Census of buildings; Climate Exposure; Building Footprint; flood risk; property indicator; aggregate dwellings Capital Stock value; descriptive statistics of the data; flood hazard map; return period; Housing; Climate change; Stocks; Global
Cover Analytical Notes
Towards an Inclusive, Equitable and Sustainable National Pension System in Iraq
International Monetary Fund
,
World Bank
, and
International Labour Office
A pension system is at the heart of social protection. By ensuring income security for older persons and other vulnerable groups, it prevents poverty, reduces inequality, and facilitates consumption smoothing. A pension system also affects the working population’s labor market choices and has important fiscal implications. Iraq’s current pension system is highly fragmented, inequitable, and inefficient. First, it fails to provide adequate income protection to most of Iraqi’s old age population and other vulnerable groups, such as survivors and persons with disability. Second, the public sector pension is already putting substantial pressure on the budget and is potentially unsustainable given the projected acceleration of the total pension bill due to recent policy changes. Third, it sets an uneven playing field between the public and private sectors, contributing to the continued expansion of an already outsized civil service and holding back much-needed economic diversification and private sector growth. Thus, a comprehensive pension reform is urgently needed. Based on collaboration between the IMF, ILO and the World Bank this policy note aims to: 1) Provide an assessment of the existing public and private pension system across the four dimensions: fiscal sustainability; labor market implications; coverage; and adequacy of benefits. 2) Develop and propose options to adjust the pension system with a view to making it fiscally sustainable, more inclusive and adequate, and conducive to private sector development and labor market formalization. 3) Provide a basis to engage key stakeholders—including workers, employers organizations and the civil society—on strategies to achieve a more inclusive system, importantly by including workers in the informal economy, female workers, workers with disabilities, and other disadvantaged groups.
Keywords:
Pension system; Pension Reform; Social protection; Fiscal sustainability; ILO team; scheme reserve; ILO publication; IMF team; member country government; Pension spending; Pensions; Public sector; Aging; Middle East; North Africa; East Africa; Global
Cover IMF Working Papers
Unveiling the Hidden Impact of Urban Land Rents on Total Factor Productivity
Mr. Bas B. Bakker
This paper addresses the puzzling decline of Total Factor Productivity (TFP) levels in rapidly growing economies, such as Singapore, despite advancements in technology and high GDP per capita growth. The paper proposes that TFP growth is not negative; instead, standard growth decompositions have underestimated TFP growth by overestimating the contribution of capital, failing to account for the substantial part of capital income directed to urban land rents. This leads to an overestimation of changes in capital stock's contribution to growth and thereby an underestimation of TFP growth. A revised decomposition suggests that TFP growth in economies with high land rents and rapid capital stock growth, such as Singapore, has been considerably underestimated: TFP levels have not declined but increased rapidly.
Keywords:
Total Factor Productivity; Economic Growth; Capital Stock; Land Rents; Growth Decomposition; Urban Economics; Population Density; Diminishing Returns to Scale; Technological Progress; Singapore; TFP level; re-estimating TFP; land rent; decline of total factor productivity; Capital income; Stocks; Land prices; Asia and Pacific
Cover Technical Notes and Manuals
IMF Engagement on Pension Issues in Surveillance and Program Work
International Monetary Fund. Fiscal Affairs Dept.
and
International Monetary Fund. Strategy, Policy, & Review Department
The International Monetary Fund (IMF) is increasingly involved in offering policy advice on public pension issues to member countries. Public pension spending is important from both fiscal and welfare perspectives. Pension policy and its reforms can have significant fiscal and distribution implications, can influence labor supply and labor demand decisions, and may impact consumption and savings behavior. This technical note provides guidance on assessing public pension systems’ macrocriticality, i.e., sustainability, adequacy, and efficiency; it also discusses the issues and policy trade-offs to be considered when designing responses aiming to address these dimensions of the pension system. The paper emphasizes the importance of taking a long-term, comprehensive perspective when evaluating public pension spending and providing policy advice. Where feasible, reforms should be gradual and transparent to allow individuals ample time to adjust their work and savings decisions and to facilitate consumption smoothing over their lifecycle to avoid poverty in old age. It is also important to ensure that pension systems’ design and reforms do not lead to undesirable impacts in other policy areas including general tax compliance, health insurance coverage, labor force participation among older workers, or labor market informality. The paper emphasizes the importance country-specific social and economic objectives and constraints, as well as political economy realities – factors that can determine whether a pension reform is a success or failure.
Keywords:
Fiscal Policy; Social Protection; Pensions; Fiscal Sustainability; Defined Benefit; Defined Contribution; pension policy; policy engagement; Policy advice; General consideration; pension provision; C. IMF-supported program; Pension spending; Pension reform; Aging; Europe; Africa; Global; Southeast Asia; Eastern Europe
Cover IMF Working Papers
Informality and the Challenge of Pension Adequacy: Outlook and Reform Options for Peru
Christoph Freudenberg
and
Mr. Frederik G Toscani
Past reforms have put the Peruvian pension system on a largely fiscally sustainable path, but the system faces important challenges in providing adequate pension levels for a large share of the population. Using administrative microdata at the affiliate level, we project replacement rates in the defined benefit (DB) and defined contribution (DC) pillars over the next 30 years and simulate the impact of various reform scenarios on the average level and distribution of pensions. In the DB pillar, the regressive minimum contribution period should be re-thought, while in the DC pillar a broadening of the contribution base and/or an increase in contribution rates would help increase replacement rates relative to the baseline forecast of 25-33 percent. A higher net real rate of return than assumed in the baseline would also have a significant positive impact. In the medium-term, labor market reform to tackle informality, and a broad pension reform to restructure the system and avoid competition between the DB and DC pillars should be a priority. Given low pension coverage, having a strong non-contributory pillar will remain important for the foreseeable future.
Keywords:
WP; replacement rate; retirement age; SNP affiliate; SPP data; Pension System; Contribution Density; Replacement Rates; Peru; SNP State budget; Asociación International; SPP pension; SPP simulation; SPP affiliate; SPP mortality tables; Fondos de Pensiones; SPP assets; SNP calculation; Pensions; Pension spending; Retirement; Wages; Aging; Central and Eastern Europe; Global
Cover IMF Working Papers
Reform Options for Mature Defined Benefit Pension Plans: The Case of the Netherlands
Mr. Marc Gerard
The Netherlands has been operating fully funded, defined benefit second pillar pension schemes that have consistently ranked high worldwide for delivering high replacement rates while featuring strong solidarity among members. Yet the long-term sustainability of the Dutch pension funds has been undermined in recent years by protracted low interest rates and unfavorable demographic developments, exacerbating controversies over intergenerational transfer mechanisms within the plans. This has prompted a national debate over ways to move toward more individualization while preserving financial security at retirement for all. This paper draws on this experience, illustrated by stress testing simulations and assessed vis-à-vis solutions implemented in peer countries, to discuss the main policy trade-offs associated with the reform of mature pension systems in advanced economies.
Keywords:
WP; wage; interest rate; ratio; benefit; labor market; solvency; pension funds; defined benefit plans; defined contribution plans; fully funded; pension mathematics; stress tests; solvency ratio; fixed income; benefit indexation; rate of return; risk pooling; inflation shock; industry wage development; replacement function; indexation benefit; benefit curtailment; Pension spending; Pensions; Labor markets; Aging; Wages; Global
Cover IMF Working Papers
Financial Constraints, Intangible Assets, and Firm Dynamics: Theory and Evidence
Sophia Chen
I study whether firms' reliance on intangible assets is an important determinant of financing constraints. I construct new measures of firm-level physical and intangible assets using accounting information on U.S. public firms. I find that firms with a higher share of intangible assets in total assets start smaller, grow faster, and have higher Tobin’s q. Asset tangibility predicts firm dynamics and Tobin’s q up to 30 years but has diminishing predicative power. I develop a model of endogenous financial constraints in which firm size and value are limited by the enforceability of financial contracts. Asset tangibility matters because physical and intangible assets differ in their residual value when the contract is repudiated. This mechanism is qualitatively important to explain stylized facts of firm dynamics and Tobin’s q.
Keywords:
WP; intangible assets; market value; Financial constraints; firm dynamics; Tobin’s q; asset tangibility; production parameter; selling; general; and administrative; entrant firm; share of intangible assets; Aging; Asset valuation; Stocks; Financial frictions
Cover IMF Working Papers
The Impact of Longevity Improvements on U.S. Corporate Defined Benefit Pension Plans
Mr. John Kiff
,
Michael Kisser
,
Mauricio Soto
, and
Mr. S. E Oppers
This paper provides the first empirical assessment of the impact of life expectancy assumptions on the liabilities of private U.S. defined benefit (DB) pension plans. Using detailed actuarial and financial information provided by the U.S. Department of Labor, we construct a longevity variable for each pension plan and then measure the impact of varying life expectancy assumptions across plans and over time on pension plan liabilities. The results indicate that each additional year of life expectancy increases pension liabilities by about 3 to 4 percent. This effect is not only statistically highly significant but also economically: each year of additional life expectancy would increase private U.S. DB pension plan liabilities by as much as $84 billion.
Keywords:
WP; mortality table; mortality rate; life expectancy; group Annuity mortality table; Pension Plans; Longevity Risk; Mortality; pension liability; Individual Annuity mortality table; freedom pension plan sponsor; DB pension plan provider; benefit pension plans; Pensions; Pension spending; Aging; Insurance; Global
Cover IMF Working Papers
International Reserves—Too Much of a Zipf’s Thing
Mariusz A. Sumlinski
Concentrated distribution of international reserves is puzzling. I show that the growth rates of international reserves bear only a very weak relationship to their initial stocks (scaled by GDP or in absolute terms), and that, by implication, the cross-sectional distribution of reserves conforms to Zipf's law. The law states that the size of reserves is inversely related to their ranking. Evidence in favor of the law is strong and time robust. I compare the crosssection distribution of international reserves embedded in the WEO projections to that implied by Zipf's law and find that international reserves are much less concentrated in the WEO projections than implied by Zipf's law.
Keywords:
WP; law influence; growth rate; reserve