nep-age New Economics Papers
on Economics of Ageing
Issue of 2007‒05‒04
four papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Tax, Welfare, and Pension Reforms in Slovenia: Implications for Work Incentives and Labor Participation By Anita Tuladhar; Philippe Egoumé-Bossogo
  2. Older Couples' Labour Market Reactions to Family Disruptions By David Haardt
  3. Financial Market Implications of India's Pension Reform By Hélène Poirson
  4. The Impact of New Drug Launches on the Loss of Labor from Disease and Injury: Evidence from German Panel Data By Van Bui; Michael Stolpe

  1. By: Anita Tuladhar; Philippe Egoumé-Bossogo
    Abstract: The labor participation rate in Slovenia has been lower than in the EU-15 (the members states prior to May 2004), particularly for the low-income and older individuals. Using simulations of tax and social benefits and public pensions, the paper shows how the current tax, welfare, and pension systems create disincentives to work among these groups. The paper finds that incentives to retire early are strong for men, especially low-wage earners. The marginal effective tax rates also make it costly for low-income individuals to work and negatively affect the probability of participating. The paper proposes reform measures to enhance work incentives and labor participation, which will be crucial for dealing with population aging and for achieving higher potential growth in Slovenia.
    Keywords: Labor particiaption , retirement , pensions , taxation , welfare , Slovenia , Labor supply , Slovenia , Labor policy , Tax reforms , Pensions , Early retirement incentives ,
    Date: 2007–01–08
  2. By: David Haardt (Institute for Social and Economic Research)
    Abstract: In this paper, I analyse how spouses in older couples react to 'shocks' or 'surprises' in their partner's labour income using data from the British Household Panel Survey, 1991-2004. Wives' labour supply proves to be much more sensitive to shocks than husbands'. After a divorce or separation, wives reduce their labour supply while the effect on husbands' labour supply is positive or not statistically significant. If a wife becomes unemployed, it does not affect her husband's labour supply while wives whose husband becomes unemployed reduce their labour supply, too. A decline in husband's health causes the wife to reduce her working hours while husbands tend to increase their labour supply when facing a decline in wife's health. Partner's death does not have statistically significant labour supply effects. Negative income shocks due to other reasons (such as choice) tend to reduce partner's labour supply and vice versa, but only slightly.
    Date: 2007–04
  3. By: Hélène Poirson
    Abstract: India's planned pension reform will set up a proper regulatory framework for the pension industry and open up the sector to private fund managers. Drawing on international experiences, the paper highlights pre-conditions for the reform to kick-start financial development, including: (i) the buildup of critical mass; (ii) sufficiently flexible investment guidelines and regulations, including on investments abroad; and (iii) concurrent reforms in capital markets. Given the limited scale of the planned reform, the key challenge for India is to achieve sufficient critical mass early on. Options to address this challenge include granting permission for existing workers to switch to the new system or outsourcing all or part of the reserves of private sector provident funds to the new pension fund managers.
    Keywords: Asset prices , emerging markets , pension reforms ,
    Date: 2007–04–09
  4. By: Van Bui; Michael Stolpe
    Abstract: This paper studies the evolution of early retirement due to disease and injury in the German labor force between 1988 and 2004. Using data from the German Federation of Public Pension Providers, the IMS Health Drug Launches database and the WHO Mortality Database, we show that new drug launches have substantially helped to reduce the loss of labor at the disease-level over time. We employ a variety of econometric methods to exploit the pseudo-panel structure of our dataset and find that in Western Germany alone each new chemical entity has on average saved around 200 working years in every year of the observation period. Controlling for individual determinants of health-related retirement, such as worker’s age, sex and type of work, we also find evidence that the 2001 reform of pension laws has led to further reductions in the loss of labor from disease and injury.
    Keywords: Medical technology, Early retirement, Rehabilitation services, Pension reform, Pseudo-panel data
    JEL: I12 I18 J26
    Date: 2007–04

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