70 results found
Miles D, Sefton J, 2020, House prices and growth with fixed land supply, The Economic Journal, ISSN: 0013-0133
This paper analyses housing costs and changing patterns of residential developmentover the long term in a dynamic general equilibrium. It makes two main points. First,in a growing economy where there are advantages to central location the speed of travelimprovements is crucial to the evolution of land and house prices. We derive an intuitivecondition for the rate of change in transport e¢ ciency that generates áat land and houseprices on a balanced growth path. Second, we present evidence that this conditionseems to have been approximately satisÖed in many developed economies between themid-nineteenth century and the mid-twentieth century, but that since then passengertransport improvements have slowed down. Once that happens we move o§the balancedgrowth path. Our calibrated model suggests this has been the crucial factor behindrising housing costs in many countries in recent decades. We use the model to helpunderstand the similarities and di§erences between long term movements in home pricesin the US and the UK and how they may di§er in the future.
McCarthy D, Lee R, Sefton JA, et al., 2017, Full generational accounts: what do we give to the next generation?, Population and Development Review, Vol: 43, Pages: 695-720, ISSN: 0098-7921
Lee R, Mason A, members of the NTA Network, 2014, Is low fertility really a problem? Population aging, dependency, and consumption., Science, Vol: 346, Pages: 229-234
Longer lives and fertility far below the replacement level of 2.1 births per woman are leading to rapid population aging in many countries. Many observers are concerned that aging will adversely affect public finances and standards of living. Analysis of newly available National Transfer Accounts data for 40 countries shows that fertility well above replacement would typically be most beneficial for government budgets. However, fertility near replacement would be most beneficial for standards of living when the analysis includes the effects of age structure on families as well as governments. And fertility below replacement would maximize per capita consumption when the cost of providing capital for a growing labor force is taken into account. Although low fertility will indeed challenge government programs and very low fertility undermines living standards, we find that moderately low fertility and population decline favor the broader material standard of living.
Sefton J, van de Ven J, 2009, Optimal Design of Means Tested Retirement Benefits*, ECONOMIC JOURNAL, Vol: 119, Pages: F461-F481, ISSN: 0013-0133
Ven JVD, Sefton J, 2009, Optimal Design of Means Tested Retirement Benefits
The design of welfare benefits is a tricky business. In this respect, James Meade placed particular emphasis on the importance of avoiding excessive distortions to the price of labour. Nevertheless, Meade noted that means testing in the delivery of welfare benefits is likely to be desirable in view of the “hideously expensive” cost of universal benefits provision — he conjectured that £1 of benefits lost for every £2 of private income earned might be appropriate. In this study we take a fresh look at the role of means testing in the provision of retirement benefits in the United Kingdom. We use an articulated rational agent model of the household to explore the effects on welfare of alternative budgetary neutral pensions arrangements. We find that extensive means testing of retirement benefits is preferred, consistent with the conjectures stated by Meade. Our analysis highlights the importance of taking into account the distortions associated with alternative methods of benefits financing when considering pensions reform.
Sefton J, Weale M, 2009, Reconciliation of National Income and Expenditure
This book was first published in 1995. The problem of disparities between different estimates of GDP is well known and widely discussed. Here, the authors describe a method for examining the discrepancies using a technique allocating them with reference to data reliability. The method enhances the reliability of the underlying data and leads to maximum-likelihood estimates. It is illustrated by application to the UK national accounts for the period 1920–1990. The book includes a full set of estimates for this period, including runs of industrial data for the period 1948–1990, which are longer than those available from any other source. The statistical technique allows estimates of standard errors of the data to be calculated and verified; these are presented both for data in levels and for changes in variables over 1-, 2- and 5-year periods.
Sefton JA, Van de Ven J, Weale M, 2008, Means Testing Retirement Benefits: Fostering Equity or Discouraging Savings?, Economic Journal, Vol: 118, Pages: 556-590
Sefton J, Ven JVD, 2007, Utility Maximising Design of Means Tested Retirement
The design of welfare benefits is a tricky business. In this respect, James Meade placed particular emphasis on the importance of avoiding excessive distortions to the price of labour. Nevertheless, Meade noted that means testing is likely to be desirable in view of the “hideously expensive” cost of universal benefits provision — he conjectured that a 50% withdrawal rate on welfare benefits might be appropriate. In this study we take a fresh look at the role of means testing in the provision of retirement benefits in the United Kingdom. We use an articulated rational agent model of the household to explore the effects on expected lifetime utility of alternative budgetary neutral pensions arrangements. In this context, we find that extensive means testing of retirement benefits is preferred, consistent with the conjectures stated by Meade. Our analysis highlights the importance of taking into account the distortions associated with alternative methods of benefits financing when considering pensions reform.
Kirsanova T, Sefton JA, 2007, A comparison of national saving rates in the UK, US and Italy, European Economic Review, Vol: 51, Pages: 1998-2028
Sefton J, Ven JVD, Weale M, 2006, Means Testing Retirement Benefits: fostering equity or discouraging savings?
Means testing plays an important role in the UK state pension system. We use a dynamic programming model to consider the long-term behavioural effects of a recent policy reform that reduced the marginal tax rates on private income of means tested retirement benefits from 100% to 40%. Our analysis suggests that the policy reform will encourage the poorest third of all households (based on wealth at age 65) to both save more and delay retirement, and have the opposite effects on richer households. In aggregate, the off-setting behavioural responses that we identify imply an overall delay in the timing of retirement, a fall in average savings, and a small effect on the government budget. We find that, on balance, the policy reform provides a reasonable compromise between the distortions associated with high marginal tax rates, and the costs implied by universal benefits provision.
Sefton J, Weale M, 2006, The concept of income in a general equilibrium, Review of Economic Studies, Vol: 73, Pages: 219-249, ISSN: 0034-6527
Kirsanova T, Sefton J, 2006, A Comparison of National Saving Rates in the UK, US and Italy
We develop the approach of Gokhale et al. (1996), based on the life-cycle model of savings, to decompose the di?erences in the national saving rates between the UK, US and Italy. Our work suggests that the US saving rate is lower principally because Americans on average retire later. In contrast, the Italian saving rate is higher predominantly because Italians are credit constrained, particularly when young. We also found that demography and the di?erent tax and bene?t systems are able to explain little of the cross-sectional di?erences in saving rates. The study accounts for the possible importance of intergenerational private transfers in determining saving rates.
Cavaglia S, Sefton J, Scowcroft A, et al., 2006, Global Style Investing, The Journal of Portfolio Management, Vol: Summer
Weale M, Ven JVD, Sefton J, 2005, The Effects of Means-Testing Pensions on Savings and Retirement
This study uses a stylised simulation model to consider potential behavioural responses to the reduction in pension taper rates associated with replacing the Minimum Income Guarantee (MIG) with the Pension Credit (PC). A range of long-run responses to the policy change are identified, summarised by four behavioural "types": 1. Households on very low incomes, who do not save any wealth under the MIG — comprising 17 percent of the population in 2004. The behaviour of these households is affected only slightly by replacing the MIG with the PC. These households do not save for retirement and choose to exit the labour market before state pensionable age because of their low labour incomes (relative to welfare benefits), rather than in response to the effects of means tested pensions. 2. Households (other than those described under 1) for which a marginal increase in savings would be subject to a 100% taper under the MIG — comprising 12 percent of the population in 2004. Substitution effects dominate with the introduction of the PC, and these households choose to increase their savings for retirement (by £11,000 on average between ages 60 and 64), and to choose a later retirement age (an additional 18% to 20% choose to be employed between ages 60 and 64). Interestingly, the increase in government expenditure implied by the reduced taper rates on private income for this population subgroup under the PC is more than off-set by the increase in revenues associated with the subgroup’s increase in savings. The responses of this population group consequently appear to most accurately reflect the suppositions of those who argued for a move away from the MIG. 3. Households (other than those described under either 1 or 2) with sufficient savings under the MIG to generate incomes close to the upper threshold for which benefits can be received under the PC — approximately corresponding to the third population quintile (31% of the population1
Scowcroft A, Sefton J, 2005, Understanding momentum, FINANCIAL ANALYSTS JOURNAL, Vol: 61, Pages: 64-82, ISSN: 0015-198X
Sefton J, van de Ven J, Weale M, 2005, Means testing and retirement choices in Europe: A comparison of the British and Danish systems, FISCAL STUDIES, Vol: 26, Pages: 83-118, ISSN: 0143-5671
Sefton J, Ven J, Weale M, Means testing and retirement choice in Europe: a comparison of the British and Danish systems, Fiscal Studies, Vol: 26, Pages: 83-118
We develop a simulation model of household behaviour in which both the consumption/saving and labour/leisure choices are endogenous. This model is used to explore the effects of the UK and Danish state tax and benefit systems on the labour supply of workers aged 50 or over. We find that, in broad terms, differences in labour force participation can be accounted for by differences in benefit structures. Furthermore, our simulations suggest that the UK system is preferred by young people while the Danish arrangement which imposes a larger tax burden and provides larger welfare benefits is chosen by people of 50 or older. Notably, people older than 60 are in the majority in the simulated population. The Danish system does not promote notably greater equality over the lifetime, but it does underpin a higher level of consumption for people of 50 or older.
Weale M, Sefton J, 2005, Fiscal Implications of Demographic Uncertainty for the United Kingdom
We assess the implications of demographic uncertainty for the United Kingdom’s fiscal position. We construct stochastic population projections and then use the framework provided by generational accounts to project government revenues and expenditures. We present stochastic paths for the budget balance over time and also evaluate the frequency distribution of the increase in taxes needed to deliver fiscal solvency.
Sefton J, Ven JVD, 2004, Does Means Testing Exacerbate Early Retirement?
It is quite clear that the message has gone out to all too many of our constituents that savings can damage their retirement income. We cannot explain the collapse in savings in this country in any other way than by saying that people are being very rational and that about 40 per cent of working people cannot now save to make themselves a penny better off - let alone substantially better off - through forgoing income now and trying to push it into their retirement.
Sefton J, van de Ven J, 2004, Simulating household savings and labour supply: an application of dynamic programming, National Institute Economic Review, Pages: 56-17 pages, ISSN: 0027-9501
Sefton J, Scowcroft A, 2004, A decomposition of portfolio momentum returns (Discussion Paper), TBS/DP04/9
Sefton J, Weale MR, 2004, Individual and national income in general equilibrium (Discussion Paper), TBS/DP04/8
Miles D, Sefton J, 2003, Social security design in the UK: What is optimal?, Symposium on Welfare Reform Under the Labour Government, Publisher: INST FISCAL STUDIES, Pages: 121-151, ISSN: 0143-5671
Dutta J, Sefton J, Weale M, 2003, Education and public policy, The economics of public spending, Editors: Miles, Myles, Preston, Miles, Myles, Preston, Oxford, Publisher: Oxford University Press, Pages: 121-152, ISBN: 9780199260324
Kirsanova T, Sefton J, Weale MR, 2002, Playing the Generation Game: a re-examination of saving behaviour around retirement
We explore how men's hourly wages and the consumption and income patterns of households headed by men aged 53-67 evolve as the men age towards retirement and cross the retirement threshold. We make use of cross-section data from the Family Expenditure Survey and Family Resource Survey, but check for sample selection bias in our estimates of hourly wage movements using data from the British Household Panel Survey. We find that households including men entitled to occupational pensions, and particularly those headed by men who stayed at school beyond 16, are largely able to smooth their consumption across the retirement threshold. Relevant households with no access to occupational pensions show sharp falls in consumption on retirement.
Cantor ACM, Sefton JA, 2002, Economic applications to actuarial work: personal pensions and future rates of return, British Actuarial Journal, Vol: 8, Pages: 91-131, ISSN: 1357-3217
Miles DK, Sefton J, 2002, Optimal social security design, Discussion Paper Series - Centre for Economic Policy Research London, Pages: ALL--, ISSN: 0265-8003
Scowcroft A, Sefton J, 2001, Do tracking errors reliably estimate portfolio risk?, Journal of Asset Management, Vol: 2, Pages: 205-222
Dutta J, Sefton JA, Weale MR, 2001, Income distribution and income dynamics in the United Kingdom, Journal of Applied Econometrics, Vol: 16, Pages: 599-19 pages, ISSN: 0883-7252
Kirsanova T, Sefton J, 2001, A Comparison of Personal Sector Saving Rates in the UK, US and Italy
We develop the approach of Gokhale, Kotlikoff and Sabelhaus (1996), based on the life-cycle model of savings, to decompose the large differences in the personal sector saving rates between the UK,US and Italy. Our work suggests that the US saving rate is lower principally because Americans on average retire later. The Italian saving rate is high predominantly because Italians are unable to borrow, especially when they are young. We also found that demography and the different tax and benefit systems are able to explain little of the cross-sectional differences in saving rates. The study estimates the size of, and accounts for the possible importance of, intergenerational private transfers in determining saving rates.
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