Journal of Insurance and Finance 2021 KCI Impact Factor : 0.67

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2011, Vol.22, No.4

  • 1.

    The Effects of the Reduction in Payment of the National Pension on Household Behavior of Private Pension Contribution by Income levels

    김재호 | 2011, 22(4) | pp.3~31 | number of Cited : 7
    Abstract PDF
    According to life-cycle model, households decide consumption and saving given their lifetime income. However, if they live longer than expected lifetime, they face longevity risk as they have to live the rest of their life with scarce income. This study investigates whether rational households will increase the contribution to private pension in response to the reduction in payment of the National Pension in 2007 by income levels. Targeting 50's households in the Korean Retirement and Income Study, this study utilizes Propensity Scoring Matching and Difference in Difference. The empirical results indicate that reduction in payment of the National Pension cause the third income-tier household to decrease the contribution while fourth income-tier household to increase the contribution to private pension in response to the reduction in payment. This result suggests that the contribution to private pension is related with income level, so it is necessary for the government to increase tax benefits and subsidize low income households for private pension to assist National Pension.
  • 2.

    Retirement Choices and Financial Incentives in Korea - Simulation over the Effects of Deferred Pension Expansion -

    권혁진 | 2011, 22(4) | pp.33~72 | number of Cited : 3
    Abstract PDF
    Previous theoretical and empirical studies have provided the effects of financial incentives on retirement choices. Within my knowledge, this is the first empirical study to estimate a retirement probabilities model of financial incentives over the middle to old-aged in Korea. In this article, social security wealth and its accrual, peak value and option value are calculated as close as possible to the real value by using the dataset merged KReIS(version.3.4) with administrative archive managed by NPS. The main results are: First, the middle to old-aged decide a retirement taking a longer perspective over the change of the expected pension asset. Second, to achieve a desired effects from the improvement on the deferred pension, such as employment opportunities, the factors other than pension scheme need to change simultaneously. Lastly, the income effect of social security wealth on retirement probabilities is likely to vary depending on the specific pension scheme and socio-economic circumstances. This result needs to be further scrutinized through more developed studies.
  • 3.

    Analysis of the Association between Disability and Life Expectancy

    Haebong Woo | 2011, 22(4) | pp.73~108 | number of Cited : 3
    Abstract PDF
    This study explores the association between disability and life expectancy in Korea. In particular, using multi-state life-table models, this study estimates total, healthy, and unhealthy life expectancies to simultaneously examine the quality of life as well as the length of life. Overall the results indicate that, in addition to their shorter life spans, the disabled show a higher proportion of unhealthy state in their lives. This study also finds that differences between the disabled and non-disabled are greater in healthy life expectancy than in total life expectancy, in particular for younger aged groups. Finally, compared to total and healthy life expectancies, the results do not show significant differences in unhealthy life expectancy in general.
  • 4.

    Price Discovery of Online and Offline Trading on Korea Exchange

    woobaiklee , 김종오 | 2011, 22(4) | pp.109~147 | number of Cited : 3
    Abstract PDF
    This paper examines online and offline traders' contribution to price discovery using unique data covering 339 stocks listed on the Korea Stock Exchange during the sample period from 2002 through 2003. We investigate daily contribution of each channel to price discovery using the weighted price contribution(WPC) suggested by Barclay-Warner(1993). We find that contribution to price discovery by Home Trading System(HTS), which holds substantial share of trading, is very low and statistically insignificant. In contrast, offline traders who place orders through brokers, lead the price discovery by representing 104% of weighted price contribution. The contribution of offline traders to price discovery is still statistically significant even after controlling trading frequency and trading volume. In view of behavioral finance, these empirical results are consistent with Barclay-Odean(2002)’s findings that traders become less profitable and more active after switching from phone-based trading to online trading, which is explained by overconfidence – augmented by self-attribution bias and the illusions of knowledge and control. Offline trader’s contribution to price discovery also strongly exceeds online traders’ contribution in the estimation extended to weekly and monthly interval, confirming that offline traders have long-term informational advantage. Institutional investors and foreign investors are offline traders, but individual investors concentrate substantial portion of trading on HTS. Notably, institutional investors and foreign investors significantly outperform individual traders in offline trading. Offline traders lead contribution to price discovery in large-capital stocks. These findings demonstrate that order placement channel is differentiated by investor types and reflected in price discovery. In summary, our empirical findings suggest that Korea stock market is efficient in public online information.