|
on Economics of Ageing |
| By: | Nicole Maestas |
| Abstract: | This paper analyzes a puzzling aspect of retirement behavior known as Òunretirement,Ó in which retirees appear to reverse their retirement decisions and return to work. Using panel data from the Health and Retirement Study, the author shows that nearly 50 percent of retirees follow a nontraditional retirement path that involves partial retirement or unretirement, and that 26 percent of retirees later unretire. She explores two possible explanations: 1) unretirement transitions are unexpected, resulting from failures in planning or financial shocks; and 2) unretirement transitions are anticipated prior to retirement, reflecting a more complex retirement process. She presents a theoretical model that illustrates how both unplanned and planned unretirement might arise in a life-cycle framework-the former via uncertainty in asset returns and medical expenses, and the latter through a phenomenon she calls Òburnout and recovery,Ó in which individuals systematically burn out on their career jobs, retire, then return to the labor force after a period of recovery. Using data on expectations and realizations of work during retirement, she shows that unretirement was anticipated for the vast majority (82 percent) of those returning to work, and is not a result of financial shocks, poor planning or low wealth accumulation. For the small minority who unexpectedly returned to work, the evidence points to preference shocks-that is, discovering retirement leisure less satisfying than expected. If anything, expectations err on the side of excessive pessimism about retirement rather than unwarranted optimism; this finding complements a growing literature on consumption behavior at retirement which has suggested that realized retirement turns out better than expected for most people. |
| Keywords: | retirement, aging, expectations, employment |
| JEL: | J14 J2 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:196.2&r=age |
| By: | Pierre-Carl Michaud; Arthur van Soest; Tatiana Andreyeva |
| Abstract: | While the fraction of obese people is not as large in Europe as in the United States, obesity is becoming an important issue in Europe as well. Using comparable data from the Survey of Health, Aging and Retirement in Europe (SHARE) and the Health and Retirement Study in the U.S. (HRS), this paper analyzes the correlates of obesity in the population ages 50 and above, focusing on measures of energy intake and expenditure as well as socio-economic status. The main results are as follows: 1) Obesity rates differ substantially on both sides of the Atlantic and across European countries, with most of the difference coming from the right tail of the weight distribution. 2) Part of the difference in obesity prevalence between the U.S. and Europe is explained by a higher fraction of food eaten away from home and notably lower time devoted to cooking in the U.S. 3) Sedentary lifestyle or a lack of vigorous and moderate physical activity may also explain a substantial share of the cross-country differences. 4) Differential SES patterns of energy intake and expenditure across countries cannot fully account for the observed cross-country variation in the SES gradient in obesity. |
| Keywords: | Body Mass Index, International Comparison, SHARE |
| JEL: | I12 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:495&r=age |
| By: | Sergey Slobodyan; Viatcheslav Vinogradov |
| Abstract: | In their recent paper, Boldrin and Montes (2005) analyze the “return on human capital investment” theory and show that if borrowing for education is not possible, then a combined public education and pension system that uses lump sum taxes and transfers can replicate the first-best decentralized allocation achieved in an economy without taxes where borrowing for human capital accumulation (education) is allowed. Taking into account that such borrowing is either absent or inefficient in many countries, a combined public education/public pensions scheme in such countries might prove to be welfare enhancing. Guided by this theoretical framework, we calibrate the parameters of an interconnected pension and education system for the Czech Republic under different demographic scenarios and fiscal rules. We also model the impact of an increase in the retirement age and of a hypothetical imbalance of pensions or educational transfers. |
| Keywords: | Public education, demographic development, pay-as-you-go pensions |
| JEL: | H52 H55 I22 I28 J11 J26 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp326&r=age |
| By: | David, DE LA CROIX (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics and CORE); FrŽdŽric DOCQUIER (FNRS and UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); Philippe, LIEGEOIS (CEPS, INSTEAD, Luxemburg) |
| Abstract: | We forecast income growth over the periode 2000-2050 in the US, Canada, and France. To ground the forecasts on relationships that are as robust as possible t changes in the environment, we use a quantitative theoretical approach which consists in calibrating and simulating a general equilibrium model. Compared to existing studies to link taxes and public expenditures to demographic changes, and take into account the interaction between education and work experience. Forecasts show that growth will be weaker over the period 2010-2040. The gap between the US and the two other countries is increasing over time. France will catch-up and overtake Canada in 2020. Investigating alternative policy scenarios, we show that increasing the effective retirement age to 63 would be most profitable for France, reducing its gap with US by one third. A decrease in social security benefits would slightly stimulate growth but would have no real impact on the gap between the countries. |
| Keywords: | Aging, Forecast, Computable General Equilibrium, Education, Experience |
| JEL: | D58 E6 H55 J11 O40 |
| Date: | 2007–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2007029&r=age |
| By: | Silvia Balia |
| Abstract: | This paper investigates formation of expected longevity in an elderly popu- lation. We use Italian data from the early (2004) release of the Survey of Health, Ageing and Retirement in Europe (SHARE). The SHARE provides a numerical measure for subjective survival probability (SSP). To assess inter- nal consistency and investigate validity of SSP as a proxy of actual mortality, we compare SSP to lifetables and look at the variation with health, smok- ing and socio-economic variables. In a multivariate framework, we propose a recursive model for expected longevity, self-assessed health and smoking duration, where health and smoking variables are potentially endogenous. Unobservable individual-speci¯c heterogeneity is considered by estimating a finite mixture model via the EM algorithm, which allows division of the popu- lation according to different latent classes and estimation of class membership probabilities. Our mixture model fits the data better than the single class model and provides evidence of individual unobserved heterogeneity in the formulation of survival expectations. Expectations are shown to vary most with health status, socio-economic characteristics, parental mortality and age. Two-types of individuals in the population are identified, that differ in terms of unobservable frailty and rationality in addiction. We also find differences between current and former smokers in the way they discount future conse- quences of tobacco consumption on health and mortality risk. Our findings suggest caution in the use of SSP as a proxy of actual mortality. |
| Keywords: | subjective survival probability; smoking; beta regression; duration analysis; unobservable heterogeneity; mixture model; EM algorithm. |
| JEL: | I12 C0 C30 C41 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:07/10&r=age |