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on Economics of Ageing |
| By: | Alain Jousten |
| Abstract: | The present paper reviews key issues in pension design and pension reform encountered all across the world. The paper heavily refers to the recent U.S. Social Security reform debate in general and to the Personal Retirement Accounts proposal in particular. A particular emphasis is put on annuitization and risk-taking in the economy. Our discussion signals some inadequacy of the proposed measures with respect to the goals of viability of the system and individual financial security during retirement. |
| Keywords: | Pensions , Social security , Aging , Financial safety nets , Public sector , |
| Date: | 2007–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/28&r=age |
| By: | David S. Gerber; René Weber |
| Abstract: | This paper focuses on the nexus between pension funds' balance sheet liabilities, reflecting their age profile and payments obligations, and the investment behavior and costs of these funds. The context of the analysis is the stringent regulatory framework and the highly fragmented and heterogeneous pension fund landscape in Switzerland. Detailed data from the Swiss Pension Statistic are analyzed using multivariate OLS-regressions. The evidence shows that a younger age structure and lower short-term benefits payouts are related to a higher share of equities and lower real estate holdings. Legal form, pension plan type, and size are important for administrative costs. The findings support the view that aging may lead to increased risk aversion and thus to a lower engagement of institutional investors in equities. |
| Keywords: | Pensions , Switzerland , Aging , Resource allocation , Investment , Asset management , |
| Date: | 2007–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/29&r=age |
| By: | David E. Bloom; David Canning; Günther Fink; Jocelyn Finlay (Harvard School of Public Health) |
| Abstract: | The goal of this paper is to test whether the determinants of growth in general, and the effects of demography in particular, are different in Africa than for the rest of the world. We show that most Sub-Saharan countries have the potential to reap the benefits of the demographic dividend, but that solid institutional settings will be imperative for its realization. |
| Keywords: | growth, Africa, Demographic Dividend, demography, sub-saharan. |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:2307&r=age |
| By: | Impavido, Gregorio |
| Abstract: | This paper analyzes the performance and development of the Mexican pension annuity market established as a consequence of the 1997 pension reform. The Mexican experience displays interesting characteristics providing lessons for other countries that still need to design the decumulation phase of their newly established second pillars. At the same, time it raises some technical and policy concerns that need addressing as they could hamper, in the future, the healthy development of the market. The paper concludes that: 1) general life insurance companies may better hedge longevity risk than specialized annuity companies; 2) competition should be based on prices rather than additional products; 3) better disclosure of options under the 1973 and 1997 social security laws should be given to disability and life annuitants; and 4) various measures should be taken to improve asset liability management including allowing companies to trade over the counter derivatives and substituting over time the regulatory asset liability management framework with an economic asset liability management framework. |
| Keywords: | Insurance & Risk Mitigation,Markets and Market Access,Economic Theory & Research,Non Bank Financial Institutions,Pensions & Retirement Systems |
| Date: | 2007–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4236&r=age |
| By: | Lars-Erik Borge (Department of Economics, Norwegian University of Science and Technology); Jørn Rattsø (Department of Economics, Norwegian University of Science and Technology) |
| Abstract: | Generational conflict affects the supply of public welfare services, and the rising share of elderly is seen as a threat to educational spending. We offer an analysis of spending in child care, primary and lower secondary education, and care for the elderly related to the size of young and old voters. The age groups face possible disadvantages of being part of a large cohort, but also can gain political strength to crowd out services for the other groups. The decentralization of public services in Scandinavia allows for the simultaneous analysis of age related services. Using panel data from Denmark for the period 1989-1996, we find that the elderly are reducing spending in child care and education, but the young do not threaten services for the elderly. It is a disadvantage for both the elderly and the young to be part of a large cohort. The possible Tiebout-bias is handled with instrument variables predicting the relevant age composition variables. |
| Keywords: | Public welfare services; group size; age composition of the population; generational conflict |
| JEL: | H42 H72 |
| Date: | 2007–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:nst:samfok:8607&r=age |
| By: | Juha Alho; Vladimir Borgy |
| Abstract: | While demographics have long been identified as a key variable in long term macroeconomic analysis, most previous analyses have relied on deterministic population forecasts. But, as several recent papers testify, demographic developments are uncertain, and attempts at describing this via scenario-based variants have serious shortcomings. Macroeconomic consequences of demographic uncertainty have not been explored in a multi-regional setting of the world economy so far, but they can be of considerable interest. The asynchronous nature of the ageing process is expected to influence macroeconomic trends, but it is also of interest that the uncertainty of population forecasts differs across world regions. In this paper, we investigate the impact of demographic uncertainty in a multi-regional general equilibrium, overlapping generations model (INGENUE 2). Specifically, we consider the level of uncertainty in each of the ten major regions of the world, and their correlation across regions. In order to address these issues, we produce stochastic simulations of the world population for the ten regions until 2050. Then, we analyse the economic consequences on a path by path basis over the period 2000-2050. |
| Keywords: | Computable General Equilibrium Models; international capital flows; life cycle models and saving; demographic trends and forecasts |
| JEL: | C68 F21 D91 J11 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2007-09&r=age |
| By: | Giovanni Prarolo (University of Bologna and Fondazione Eni Enrico Mattei); Francesco Lancia (University of Bologna) |
| Abstract: | Over the past century, all OECD countries have been characterized by a dramatic increase in economic conditions, life expectancy and educational attainment. This paper provides a positive theory that explains how an economy might evolve when the longevity of its citizens both influences and is influenced by the process of economic development. We propose a three periods OLG model where agents, during their lifetime, cover different economic roles characterized by different incentive schemes and time horizon. Agents’ decisions embrace two dimensions: the private choice about education and the public one upon innovation policy. The theory focuses on the crucial role played by heterogeneous interests in determining innovation policies, which are one of the keys to the growth process: the economy can be discontinuously innovation-oriented due to the different incentives of individuals and different schemes of political aggregation of preferences. The model produces multiple development regimes associated with different predictions about life expectancy evolution, educational investment dynamics, and technology adoption policies. Transitions between these regimes depend on initial conditions and parameter values. |
| Keywords: | Growth, Life Expectancy, Human Capital, Systemic Innovation, Majority Voting |
| JEL: | D70 J10 O14 O31 O43 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2007.48&r=age |