Choice Architecture and the Pension System in the Czech Republic
Název práce v češtině: | Architektura Výběru a Penzijní Systém v České Republice |
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Název v anglickém jazyce: | Choice Architecture and the Pension System in the Czech Republic |
Klíčová slova: | Česká důchodová reforma, behaviorální ekonomie, Švédský důchodový systém, architektura výběru, důchodový věk, fiskální tlaky |
Klíčová slova anglicky: | Czech pension reform, behavioral economics, Swedish pension system, choice architecture, retirement age, fiscal pressures |
Akademický rok vypsání: | 2016/2017 |
Typ práce: | bakalářská práce |
Jazyk práce: | angličtina |
Ústav: | Institut ekonomických studií (23-IES) |
Vedoucí / školitel: | Mgr. Ing. Martin Štěpánek, M.A., Ph.D. |
Řešitel: | skrytý![]() |
Datum přihlášení: | 09.11.2016 |
Datum zadání: | 09.11.2016 |
Datum a čas obhajoby: | 10.06.2019 09:00 |
Místo konání obhajoby: | Opletalova - Opletalova 26, O105, Opletalova - místn. č. 105 |
Datum odevzdání elektronické podoby: | 09.05.2019 |
Datum proběhlé obhajoby: | 10.06.2019 |
Oponenti: | prof. Petr Janský, Ph.D. |
Kontrola URKUND: | ![]() |
Seznam odborné literatury |
1. Richard H. Thaler; Cass R. Sunstein, 2008, Nudge: Improving decisions about health, wealth, and happiness.
2. Daniel Kahneman; Amos Tversky, 2000, Choices, values, and frames 3. Eldar Shafir, 2013, The Behavioral Foundations of Public Policy 4. Thaler, Richard; Bernartzi, Shlomo (2004) Save More Tomorrow™: Using Behavioral Economics to 5. Robert Fenge,George De Menil,Pierre Pestieau, 2008, Pension Strategies in Europe and the United States Increase Employee Saving 6. Robert Holzmann and Edward Palmer, 2006, Pension Reform: Issues and Prospects for Non-Financial Defined Contribution (NDC) Schemes 7. Robin L. Lumsdaine, James H. Stock, and David A. Wise, 1992,Three Models of Retirement Computational Complexity versus Predictive Validity 8. Gordon L. Clark, Kendra Strauss, Janelle Knox-Hayes, 2012, Saving for Retirement: Intention, Context, and Behavior 9. Ivonne Honekamp, 2014, Survey-Based Study on Partial Aspects of Retirement Decisions of Private Persons in Germany |
Předběžná náplň práce v anglickém jazyce |
Research Question: How can implementations of choice architecture change the current retirement system? How can the
population of the Czech Republic benefit from the use of some techniques taken from behavioral economics? Motivation: For years countries have been trying to find the best ways to ensure their citizens’ well-being after retirement. The structure of pension systems has been one of the most important and complicated questions that appears during many meetings of politicians at all administrative levels. It is really hard to evaluate its importance, as wrong decisions can lead to horrific consequences not only for particular households, but for countries as a whole and in some extreme cases for the global economy. As a result of this, ensuring financial security for elderly citizens is one of the main obligations and goals for policy makers. Unfortunately, due to diverse factors like increasing longevity, low birth rates and financial crises, this goal is even harder to achieve. (European Union pension systems: Adequate and sustainable?, David Eatock, 2015) Because of these factors the pension system in which pensions are paid out of the taxes collected from the earnings of a nation’s employed sector is not effective anymore. Therefore this system is in great need of restructuring and additional investments. The world financial institutions are in constant search of the solution for this problem, which would strengthen social security around the world. In 2005 the World Bank introduced a brand new recommendation for countries - a five-pillar framework. This concept was afterwards changed and adapted to the needs of different nations according to specific features of the individual countries. Nowadays, systems with combinations of two, three or five pillars can be found in many European countries. Unfortunately, despite these reforms nations still have to face a huge number of problems with pensions. In this paper I would like to focus on the retirement system in the Czech Republic. The problem of the retirement system there has constantly been the cause of worries, as for many years the Czech pension account has been in deficit. Czech policy-makers have to consider a lot of issues, characterized for the country. But their main concern has remained the same for decades. The population is aging and it does not renew itself. According to a preliminary official report in 2015, 110,764 citizens were born, 11,173 died, 34,992 immigrated and 18,945 left the country. In other words the natural increase of population was equal to -409 and net migration was 15,977. (Summary data on the Czech Republic, Czech statistical office). As a consequence the Czech Republic can one day find itself in a situation when there will be more seniors than employed citizens. If the population renews itself only by immigration, measures for changing the system have to be taken, because the existing plan will not work. The Czech Republic's retirement system now consists of two pillars. However, the system has survived through quite a lot of complex changes during the last 22 years. In 2013 the government introduced the second pillar, which was warmly welcomed by the IMF. The economists believed, that this reform can bring a lot of positive changes to the condition of the Czech pension system, (IMF Country Report No. 12/115, May 2012, Czech Republic: 2012 Article IV Consultation—Staff Report: Staff Supplements; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for the Czech Republic). Unfortunately the expected success never happened and after July 2015 people could not participate in it anymore, even though it works quite well in other countries. The official explanation of cancelling this pillar is the lack of citizens’ interest. So it can be said that the government did not manage to properly introduce the new policy to people or to make the conditions of participation good enough to satisfy needs of an ordinary person. As it is a proven fact that the design of the policy has a great impact on the whole outcome. For example, Madrian and Shea (2001) stated that the default choice can lead to disastrous consequences for citizens’ savings. In this work, I would like to analyze how such failures can be foreseen and abolished with the help of the correct choice architecture. I will try to study how the system in the Czech Republic can benefit from methods used in behavioral economics. I will analyze what steps can be made to gain public interest, as not all people know that they can for example willingly participate in retirement planning if they work abroad and afterwards return to the Czech Republic, or that even students can save for the future. I believe that the right policy structure can change the existing situation for the better and prevent another projects from failing. Hypotheses 1. Choice architecture strongly affects the pension system. 2. A properly introduced policy leads to better outcomes, than a poorly proposed one. 3. People, being positively influenced to think about their future, are more likely to contribute earlier and more. Methodology I will design a questionnaire, consisting of common questions about for example level of education, sex, and questions about some saving plans. Part of them will be based on the real pension system, while others would be created using the existed pension possibilities with implications of some choice architecture’s methods. I understand that I will not be able to obtain enough data to construct an experiment that will describe a real condition of the situation. However, I will try to get as much data as possible. To analyze the collected data I expect to use statistical methods, like for example a linear probability model. Moreover, I will try to use the probit model. The model will be estimated using the analytical weights from the dataset, which I will get with the questionnaire. While doing my quantitative research I will inspire by Ivonne Honekamp (2014) and Gordon L. Clark, Kendra Strauss, Janelle Knox-Hayes (2012). Furthermore, in my work I will analyze the data from the Czech Statistical Office and from the World Bank’s reports. Outline: 4. Introduction 5. Pension reform in Czech Republic 6. Second pillar 7. Effects 8. Role of the behavioral economics. Libertarian paternalism. 9. Implications of choice architecture 10. Comparison with another country 11. Conclusion |