...THE ACCUMULATION OF RETIREMENT WEALTH James Poterba Joshua Rauh Steven Venti David Wise Working Paper 12597 http://www.nber.org/papers/w12597 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 October 2006 We are extremely grateful to Tonja Bowen for extraordinary and tireless research assistance, to Gary Engelhardt and Anil Kumar for graciously providing us with tabulations from their HRS Defined Contribution Plan imputation algorithm, to Paul Bingley, Peter Diamond, Gary Engelhardt, Jon Gruber, Helena Stolyarova, and many seminar participants for helpful comments, and to the National Institute of Aging for research support under grant number P01 AG005842. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. © 2006 by James Poterba, Joshua Rauh, Steven Venti, and David Wise. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Defined Contribution Plans, Defined Benefit Plans, and the Accumulation of Retirement Wealth James Poterba, Joshua Rauh, Steven Venti, and David Wise NBER Working Paper No. 12597 October 2006 JEL No. J14,J26,J32 ABSTRACT The private pension structure in the United States, once dominated by defined benefit (DB) plans, is currently divided between defined contribution (DC) and DB plans. Wealth accumulation...
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...Roberts: 1 Kristine Roberts Dr. Dockray Miller English Literature 1 20 September 2012 Treasure as a Symbol of Honor and Success Throughout the entire text of Beowulf, the accumulation and re-distribution of t reassure serves to have symbolism regarding acts of bravery, honor, success, and reward. Treasure is both gained through the brave battles that Beowulf fights against the three monsters he encounters, and his rewards reflect upon his success and honor in victory. Treasure is also redistributed throughout the text form king to warrior and vice-versa, symbolizing the acknowledgement of honor and reward from one generation to the next. Treasure is viewed in each of the battles as proof of victory and with this proof of success, the holder of such treasure proves that he is worthy and deserving of loyalty from and by brave warriors. After slaying Grendel, Grendel’s mother, and the dragon, treasure is gained and passed along to the next generation, such as when Hrothgar gives gifts to Beowulf, who distributes it among his people, to show and symbolize the potential sacrifices made to gain the treasure, and thus the bravery, honor, success, and reward that the treasure surely represents throughout the text. After Beowulf slays the monster Grendel, King Hrothgar rewards and thanks Beowulf for his efforts by offering him several objects considered treasure. Among the multitude of objects that he presents to Beowulf: “He gave to Beowulf the blade of Healfdene/ a golden war-standard...
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...Robbing the working class was consistent with Carnegie’s philosophy for societal progress, in which wealth ideally accumulated only with a few. In his influential piece, “Gospel of Wealth,” Carnegie claims that “the best interests of the race are promoted” when society “inevitably gives wealth to the few.” His view of a thriving and progressing society was one where “the laws of accumulation will be left free” and the few and competent are worthy of mass wealth. This vision of inequitable accumulation most clearly crystallized in Carnegie’s encounter with labor relations in Braddock. After the workers successfully negotiated a decreased workday and an increase in hires in 1886, Carnegie was eager to end the union altogether. When the union...
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...A Limit on Maximum Wealth Must Be Implemented In Canada. Now is the time for the Canadian Robin Hood to step up, and take away from the rich to give to the poor before it’s too late. The inequalities between the rich and poor citizens are so obscene already, and yet still rising quickly. As Karl Marx puts it, “accumulation of wealth at one pole is, therefore, at the same time, accumulation of misery, the torment of labour, slavery … at the opposite pole.” According to Forbes magazine, in 2007, twenty three Canadians were billionaires. This means, their wealth is considered to be over one billion dollars each. Compare this to the fact, that in the same year, CBC News estimated Canada’s homeless population to be somewhere between 200,000 and 300,000 people. These are people who cannot afford the bare minimum. A meager amount, of just a couple hundred dollars a month in rent would be sufficient enough to provide them with a bed to sleep on at night. That being said, an important question arises. How much wealth would one need, in order to be happy? One million? Hundred million? One billion? It is believed by Daniel Gilbert, professor of psychology at Harvard University, that once basic needs such as food and shelter are met, the rest are little increments which have little effect on an individual’s level of happiness. You might be surprised to hear, but research determined that to “buy happiness” one would need just 40,000 dollars per year. A bundle of happiness could be...
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...“Countries grow at different rates because they accumulate capital at different rates.” Is this true? Explain. Economic growth can be explained as the process by which a country’s wealth increases over time. It is mainly brought about by increases in productivity. It is possible that countries grow at different rates because they accumulate capital at different rates for a number of reasons. The accumulation of capital can be seen by an increase in wealth through concentration and comes about by investment in order to increase production. It is also adequate to include human capital as investing in education and training can improve productivity and thereby create capital accumulation in an economy. Both kinds of capital accumulation mentioned are generally essential for economic growth. Investment is crucial for physical capital to be maintained as without it, capital would change over time due to depreciation. The neoclassical growth model helps us to examine how capital accumulation leads to economic growth. It assumes that a country’s resources are used efficiently and that there are diminishing returns to capital and labour when the two increase. This brings about conditional convergence. If we take two economies to have the same level of technologies and have the same value of parameters for savings, depreciation and population growth, the country that starts with a lower level of output per capita will have a higher growth rate of output per capita. This will...
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...Hereafter. This means that we need to practice Islam while we perform our business and economic activities. Muslims are encourage planning for their life and put efforts to achieve the goal setting then ask help from Allah. The final stage is tawakal for what the result and takes it as the destiny bestows by Allah. The prophet Muhammad used to supplicate Allah: ‘My Lord, help me and do not give help against me, grant me a victory, and do not grant victory over me, plan on my behalf and do not plan against me, guide me and made my right guidance easy for me, grant me victory over those who act wrongfully towards me….’[1] (Narrated by Abu Daud.) In Islam, financial planning is not just merely a process of acquisition and accumulating wealth but it has a broad definition which relates to the concept of vicegerent (kalifa). According to the Holy Qur’an, God created man as his vicegerent (or ambassador) on earth. Allah says in A-Quran: Behold, thy Lord said to the angels: "I will create a vicegerent on...
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...01 November 2011 Poverty Rises, Inequality Gap Widens Wealth of 40 richest Indonesians equivalent to 60 million people’s Key Points: • Poverty rate rises over the last three years, Indonesia is the worst country in Southeast Asia in combating poverty • Inequality gap widens, wealth and economic resources are concentrated in a small number of people only • Social and economic justice must be included as development target to prevent social explosion and maintain the sustainability of the development process Managing Director: Setyo Budiantoro, MA Perkumpulan Prakarsa Executive Director ndonesia is the poorest performer on poverty reduction in Southeast Asia region. It is calculated that 2.7 million people become poorer in the country over the last three years. This increase of extreme poverty is, shamefully, the worst one in the region. Indonesia even lags behind its neighboring countries such as Cambodia and Laos in reducing poverty, -not to mention when it is compared to the better off neighbors such as Thailand or Malaysia. Moreover, it is not just that the poverty increases, the share of wealth has also been more disproportionate. The accumulation of 0.02 % richest Indonesians’ wealth is equivalent to 25% of the country’s total GDP (Gross Domestic Product), and the wealth owned by only these 43 thousand people is equal to the wealth accumulation of another 140 million people. If this situation persists, people will feel that their sense of social-economic justice...
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...Adam Smith (1723–1790) was a Scottish philosopher and economist who is renowned as the author of The Wealth Of Nations (1776), one of the most influential books on market economics ever written.[2] Adam Smith was born in 1723 on an unknown date. He studied moral philosophy at the University of Glasgow and Balliol College, but eventually left the latter and made a name for himself as a traveling lecturer. He later became a professor of logic, ethics, rhetoric, jurisprudence and political economy.[3] [edit]Introduction Adam Smith has not received as much recognition for his theory of growth as he has for his theory of value and rent, but the fact still remains that he does provide a consistent dynamic model. Adam Smith identified three major sources of growth: (i) growth in the labour force and stock of capital (ii) improvement in the efficiency with which capital is used in labour through greater division of labour and technological progress (iii) promotion of foreign trade that widens the market and reinforces the other two sources of growth.[citation needed] To understand the final growth process as stated by Adam Smith in this theory, we first need to look into the individual components, which have laid the foundation of the theory. These are Adam Smith's Production Function, his views on the process of growth of labour force and capital accumulation in the economy. [edit]The production function Adam Smith recognized only three factors of production: land, labour and...
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...groups that promote violence through music. Other songs such as “She swallowed It” and “Dopeman” both promote greediness, “lawless desires”, sexism and being promiscuous. If Plato were alive today to bear witness to Hip Hop music he would have despised the content of these songs, as the aforementioned contents of this type of music are all aspects of society in what he calls the “Luxurious City” and the “Purged City” and go against his idea of a just society. Hip-Hop’s first major concept that is addressed time and time again throughout its lyrics is the concept of Greed. Greed is defined as an “intense and selfish desire for something, especially wealth, power, or food.” (Oxford) Many Hip-Hop songs address accumulation of wealth (among other things). In terms of the “Healthy City”, Plato deems that being greedy by collecting wealth and property for the sake of doing so (and having more than is necessary) turns a healthy city into a luxurious one. Once a luxurious city, many problems arise, thus eliminating the justice from society. Plato discusses that our natural desires such are those that we need to survive and nothing more. These...
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...Capitalism has its roots in a system of slavery because in a capitalist society, there is a system of value that one must accept in order to function in society, and when this system of value emerges, a worker becomes a slave to his wage, and therefore the employer that ascribes that wage. This slavery relates to domination and exploitation in society because the bourgeois class, the upper class, dominates over the proletariat, and therefore uses this domination to exploit the work of the lower classes for their own personal and financial gain in order to maintain and solidify their financial status and therefore their ability to be continuously socially dominant. The ability of a capitalist to maintain his wealth is largely supported by Marx’s idea of surplus value. Surplus value is the excess of the value that the labourer produces over the wages that they are paid for their labour power, which the capitalist gains in the form of profit. Surplus value can be seen as whatever profit is returned on the production capital that was invested. In terms of surplus-value, Marx says “Our capitalist has two objects in view: in the first place, he wants to produce a use value in exchange, [...] an article destined to be sold, a commodity; and secondly, he desires to...
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...A New House Decision Steven Olsen Principles of Economics XECO/212 August 12, 2012 Travis Hayes In the pursuit of the American dream the desire to become a home owner is one of the most stressful decisions one must make as the repercussions of such decision can wield financial dire straits, or prove to be the avenue that leads to long term financial wealth. With the previous living arrangements for my wife, my two sons, and myself confined to a one bedroom apartment, it was time that we moved into a larger home and started thinking about the long term financial wellbeing of our family, which meant buying our first home. In this composition aspects of the economy including Mankiw’s principles of economics (Mankiw, 2007), marginal costs and benefits comparisons, a breakdown of the overall strength of domestic economy including international trade influences, and also consider hypothetical situations or conditions that could have potentially influenced our decision to purchase a home. The first step to researching home ownership was evaluating how prepared we were to make such a daunting decision. Through the use of Mankiw’s economic principles (Mankiw, 2007), we were able to express our concerns in the form of questions, in which enabled us to realize the actual change that was upon us. The principles that directly related to our home purchase included, facing trade-offs, the cost of something is what is given up to get it, people respond to incentives,...
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...such economic outlook, published their treatises in England, France, Holland - in countries emerging from the end of the XV century industrial heyday. Slide 3 But mercatilism is not just politics. The term is used in two senses: as a policy of protectionism (XVI-XVII cc.), The policy of accumulation of gold and silver - the basis of the wealth of the nation and the state and as a theoretical justification for this policy - a system of beliefs, marked the milestone in the history of economic doctrines. The mercantilists were looking for a source not just of wealth, but wealth in the specific form that suits the period of primitive accumulation. They reflect the interests of large commercial capital, for which money is not a treasure, but the form of capital. Money for them is an engine of trade and manufactory production. The source of the flow of wealth is foreign trade. Slide 4 To increase wealth, you need to follow these guidelines: 1) to achieve a positive balance of trade, ie " to sell to foreigners every year more than buy from them"; 2) do not save money as a treasure and use them in trading operations and expand trade, as export of money is mean of increasing national wealth; 3) be economical in expenditure, avoid waste; 4) contribute to the development of industry, craft and manufacturing. Slide 5 The mercantilists are proponents of strong state power, they favor government support for trade, craft, but against the petty regulation. Developing of the industry...
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...The rapid growth of Chinas economy over the past four decades has been greeted with largely unquestioned assumptions that increasing affluence would lead to a happier, wealthier more equitable society. Have the benefits of Chinas economy growth been distributed equitably and what are the social implications of this modernization process? Despite its remarkable economic growth which has been consistently high for a prolonged period of time, it has been unable to distribute the benefits of this growth to the wider masses in the country. This report looks to examine how China’s incredible economic growth and its rise as a global power has been manifested for the people of China. Part One frames this issue through popular measures such as the gini-coefficient and considers its trend. Part Two is centered on an analysis of the consumption density function curve and its shift to reflect a higher proportion of consumption by the wealthy. It is argued that this mode of analysis is superior to nationally aggregated figures as it establishes a relationship between population shifts and consumption levels. Part Three explores the theoretical underpinnings of growth-pursuant poverty reduction, namely the ‘trickle-down effect’. Attention is given to the concept of the trickle down and its intersection with Chinese domestic policy. Part Four highlights the notable divide between urban, rural, coastal and inland regards for growth and development and considers both the reasoning and implications...
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...assumptions have helped to shape the market system as the publicly accepted and entrenched economic lifestyle, and the basis for cultural and even ethical relationships. The presumptions were market intensification and the spread of money operations, as well as the need for accounting and technical production, not the seizure of new lands or colonial conquest, as it used to be, but the accumulation of wealth became the source of vitality for many nations. At the same times, the type for economic man, the one who is absorbed with resource realization, was formed. The history led Smith to become one of the most authoritative of there new global manifestation of life and theoretical trends approvers. He wrote to works called The Moral Sentiments and The Wealth of Nations (Ross) In these works he analyzed two the most important social and individual areas of life, spiritual and materialistic, he tried to philosophically justify the already mentioned era changes as the ones that are best fitting humanity, the spiritual being of nations and ensuring the material well-being. The book called The Wealth of Nations earned the title of the “father of economics” title for Adam Smith (Say). The goal of this paper is to review and analyze the economical achievements of Adam Smith for world history and the world today. Smith was born on June 5th, 1723 in Kirkcaldy, Scotland (Ross). His father, who was a customs inspector, died before his son was born. His widowed mom dedicated her life to...
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...The Issues of National Importance Based on Current Events 1. Nature And Animal Conservation Preserving species and their habitats is important for ecosystems to self-sustain themselves. Yet, the pressures to destroy habitat for logging, illegal hunting, and other challenges are making conservation a struggle. 2. Tobacco It is well know that tobacco smoking kills millions. But it also exacerbates poverty, contributes to world hunger by diverting prime land away from food production, damages the environment and reduces economic productivity. Second hand smoking also affects other people’s lives. Despite many attempts to prevent it, a global tobacco control treaty became international law in 2005. However, challenges still remain as tobacco companies try to hit back, for example, by targeting developing nations, increasing advertising at children and women, attempting to undermine global treaties and influence trade talks, etc. 3. COP19—Warsaw Climate Conference Posted Monday, December 02, 2013. An overview of the Climate Change Conference (also known as COP 19), held in Warsaw, Poland in November 2013. Predictably and sadly, the same issues have resurfaced: West stalling on doing anything, lack of funding, disagreement on priorities, etc. Climate Change And Global Warming Introduction Last updated Monday, November 11, 2013. The climate is changing. The earth is warming up, and there is now overwhelming scientific consensus that it is happening, and...
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