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Inequality, Life Expectancy, and the Intragenerational Redistribution Puzzle

Last registered on June 23, 2023

Pre-Trial

Trial Information

General Information

Title
Inequality, Life Expectancy, and the Intragenerational Redistribution Puzzle
RCT ID
AEARCTR-0011510
Initial registration date
June 20, 2023

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
June 23, 2023, 5:13 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Region

Primary Investigator

Affiliation
Helmut-Schmidt-University, Hamburg

Other Primary Investigator(s)

PI Affiliation
Helmut-Schmidt-University, Hamburg
PI Affiliation
University of Freiburg

Additional Trial Information

Status
In development
Start date
2023-07-01
End date
2023-12-31
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
In most OECD countries, pension reform policy has decreased the level of intragenerational redistribution over the last three decades, that is, redistribution among members of the same generation with high and low pension entitlements. This trend has occurred despite heterogeneity in life expectancy linked to socioeconomic status having a regressive impact on outcomes. This study contributes to solving this puzzle by means of a controlled laboratory experiment. We study the causal relationship between inequality of entitlements, mortality risk, and the size of redistribution in a stylized social security system.
External Link(s)

Registration Citation

Citation
Krieger, Tim , Christine Meemann and Stefan Traub. 2023. "Inequality, Life Expectancy, and the Intragenerational Redistribution Puzzle." AEA RCT Registry. June 23. https://doi.org/10.1257/rct.11510-1.0
Experimental Details

Interventions

Intervention(s)
The aim of the laboratory experiment is to study the causal relationship between heterogeneity in life expectancy due to economic inequality and the amount of intragenerational redistribution in a stylized social security system. In the experiment, subjects are assigned the role of an involved social planner. In the framework of a hypothetical social security system, the social planner is asked to redistribute benefits among a group of persons who differ in their contribution-based entitlements. Depending on the treatment, the group members may also differ in their 'mortality risk', which is implemented in the experiment as the probability of default in terms of receiving a zero payoff instead of the benefit. The decision of the social planner is made from behind the veil of ignorance (VOI), that is, she learns her position in the group in terms of her own entitlement, mortality risk, and (expected) benefit only after having made her choice about the level of redistribution.

As a new feature compared to a former version of this experiment, positions in the group are still randomly assigned, but the social planner knows prior to her choice that she has to earn the entilement associated with her position ex-post. In the experiment, entitlements will be associated with a waiting time, whereby a higher waiting time is attached to a higher entitlement (as this results from a higher effort). Subjects are fully-informed and have to fulfill the waiting time of their position at the end of the experiment.
Intervention (Hidden)
Intervention Start Date
2023-07-01
Intervention End Date
2023-12-31

Primary Outcomes

Primary Outcomes (end points)
Specifically, we investigate whether and how the social planner reacts to differentials in the distribution of mortality risk. The experiment involves four risk treatments (between-subjects): a control treatment without mortality risk; a treatment with equal mortality risk; and two treatments with skewed mortality risk, where income positions with lower entitlements exhibit a higher mortality risk. In one of the two skewed-mortality-risk treatments, redistribution results in a loss of efficiency. In the other treatment, subjects receive a compensation for the expected efficiency loss.
Our key outcome variable is thus the preferred level of redistribution between treatments.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Furthermore, we are interested if the preferred level of redistribution changes with the replacement ratio and the distribution of entitlements (within-subjects). We therefore repeat the decision task four times (rounds): With a high and low replacement ratio and with low and high variance.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The redistribution task, which is repeated 4 times with a different parametrization, is to choose the preferred degree of redistribution of the initial social security contributions from among the five positions of a group. The five positions vary with respect to their contribution-based entitlements and associated waiting time. Depending on the treatment, the group members may also differ in their 'mortality risk', which is implemented in the experiment as the probability of default in terms of receiving a zero payoff instead of the benefit.
Experimental Design Details
Randomization Method
Randomization by a computer.
Randomization Unit
Session level and group level randomization.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
4 treatments between-subjects
Sample size: planned number of observations
4 treatments between-subjects 2 sessions per treatment 30 participants per session 4 observations per participant = 240 observations per treatment = 960 observations in total
Sample size (or number of clusters) by treatment arms
30 participants per session * 2 sessions per treatment = 60 participants per treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
German Association for Experimental Economic Research e.V.
IRB Approval Date
2023-06-20
IRB Approval Number
2xLqST4I

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials