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| Demographic change, changes in the financial markets and current multiple crises have far-reaching effects on old-age provision, savings behaviour in households, interest rates, financing conditions and the competitive environment. In view of these long-term trends, ZEW researchers generate evidence-based policy recommendations for sustainable pension systems – the ZEW Monthly October edition 2022 provides an insight into our work focusing on “Pensions and Financial Literacy”. |
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Mannheim Institute for Financial Education (MIFE)
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↗ FINANCIAL LITERACY IN TIMES OF CRISIS
Financial literacy of the population is of great importance for individual as well as societal well-being, economic stability and social participation.From 16 to 18 November 2022, the MIFE Conference and the interdisciplinary MIFE Early Career Workshop will provide an insight into the latest academic contributions to financial literacy and financial education, and their implications for policy and practice. The focus will be on current challenges and the role of financial literacy in times of crisis.
↗ Online registration
MISSION
MIFE is a joint initiative of the University of Mannheim and ZEW. It conducts basic research on financial education of all population groups in the 21st century on the basis of state-of-the-art research methods. The research focuses on financial literacy as well as on the conditions and possibilities for effectively supporting the development of this knowledge and skills through appropriate educational, communication and information measures.
↗ More about MIFE |
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RESEARCH ON PENSIONS
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IDENTIFYING PENSION GAPS
In order to be able to realistically assess how high one’s pension will be in old age, it is not enough to simply look at the annual statutory pension information. Pension income from occupational and private pension contracts also plays an important role. Keeping an overview here is a challenge for many households. Digital platforms can help to get a more accurate picture. Researchers from the Leibniz Institute for Financial Research SAFE and ZEW conducted a study to investigate the effects such a digital platform can have on retirement planning and savings behaviour. They conclude that a simple digital overview can especially benefit people with low financial literacy.
↗ More about the study
EQUITY INVESTMENT A PROFITABLE OPTION FOR OLD-AGE PROVISION
According to a ZEW study based on simulations, an equity investment with lifecycle rebalancing would be well suited as a standard product for funded retirement provision. Investing in shares for old-age provision is worthwhile albeit riskier than investing in bonds. Financial crises, however, can lead to significant losses, especially if they occur very close to the time of retirement. What’s known as a share portfolio with lifecycle rebalancing, which gradually reduces the equity component in the years prior to retirement, is therefore recommended.
↗ More about the study
INTRODUCING STANDARDISED PENSION PRODUCTS
Almost every third household does not own any supplementary pension products. Therefore, these households might face an income gap between their previous salary and their income at retirement. Standardised, funded pension products offer several advantages: On the one hand, they encourage people to make private provision if they are designed in a simple and transparent way, and on the other hand, they can help solve the existing problem of high costs for the insured by crowding out more expensive products..
↗ More about the topic |
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↗ Nobel Laureate Paul Milgrom at International ZEW Workshop
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The fact that US economist Paul Milgrom received the Nobel Prize in Economics drew worldwide attention to the economic research field of market design about two years ago. In order to promote academic exchange in this field, ZEW together with other institutes, organised the 2nd KIT-Paris-ZEW Workshop on Market Design. The two-day workshop welcomed Paul Milgrom (Stanford University) as guest of honour. In his lecture, the economist, who was awarded for his contributions to the theory and practice of auction design, presented research into new auction designs. Their algorithm properties can lead to better investment incentives in the run-up to auctions for the allocation of scarce resources, such as in the allocation of take-off and landing rights in air traffic. Milgrom then explained the goals and possibilities of market design in an interview with ZEW researcher Marion Ott.
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AT A GLANCE
| ↗ Climate Policy Dominant Theme in ECB Speeches Alongside Price Stability
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In public speeches, Christine Lagarde and the other members of the ECB's Governing Council increasingly address additional goals beyond the main monetary policy objective of price stability. ZEW researchers analysed this change in the ECB’s communication since the introduction of the euro: The research results show that Council members dedicated significantly more attention to economic and social goals other than price stability since the introduction of the euro. Over the past five years, however, climate policy has been the “shooting star” in ECB speeches. |
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CURRENT ZEW RESEARCH
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| ↗ INFORMATION HELPS TO CORRECT IMAGE OF DIGITALISATION AS JOB KILLER
Is digitalisation a job killer? Most studies do not suggest that automation processes following digitalisation will eliminate more jobs than they create. Nevertheless, public opinion tends to perceive digitalisation as a threat. Such fears in turn affect political and social preferences as well as individual labour market decisions and thus influences the impact of digitalisation. But: Information campaigns can help to correct the distorted perception in the population.
↗ HOW STRICTER DATA PROTECTION REGULATIONS IMPACT INNOVATION IN FIRMS
40 per cent of all firms in Germany state that the General Data Protection Regulation of the European Union has had an impact on their innovation activities. Firms reacted by increasingly introducing incremental – step-by-step – innovations instead of radical innovations. ZEW investigated this together with the Technical University of Berlin for the period since the GDPR came into force. |
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↗ “FOR A DOUBLE DIVIDEND IN CLIMATE POLICY”
| | The reactions of politicians, companies and society to the high energy prices caused by the war are a good illustration of how to deal with the social consequences of the energy transition, which inevitably come with higher prices for fossil energies. What is needed is targeted social compensation that focuses on vulnerable households. |
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EVENTS
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| UPCOMING
| ↗ ZEW/MaCCI Conference on the Economics of Innovation and Patenting
ZEW Mannheim and the Mannheim Centre for Competition and Innovation (MaCCI) will host their ninth Conference on the Economics of Innovation and Patenting on 3 and 4 November 2022. Theoretical and empirical contributions from all areas of the economics of innovation and patenting are welcome. Keynote speakers will be Aija Leiponen (Cornell University), Dietmar Harhoff (Max Planck Institute for Innovation and Competition and LMU Munich) and Gaétan De Rassenfosse (École Polytechnique Fédérale de Lausanne EPFL).
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→ CONTACT FOR QUESTIONS OR SUGGESTIONS ON THE CONTENT
| | Dr. Frank Herkenhoff | frank.herkenhoff@zew.de |
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