nep-age New Economics Papers
on Economics of Ageing
Issue of 2007‒10‒06
five papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. The Effect of Job Displacement on the Transitions to Employment and Early Retirement for Older Workers in Four European Countries By Konstantinos Tatsiramos
  2. Cognitive functioning and labour force participation among older men and women in England By David Haardt
  3. Wages and Ageing : Is there Evidence for the "Inverse-U Profile"? By Michal Myck
  4. "Midlife Crises": Understanding the Changing Nature of Relationships in Middle Age Canadian Families By Karen M. Kobayashi
  5. Is Well-Being U-Shaped over the Life Cycle? By David G. Blanchflower; Andrew J. Oswald

  1. By: Konstantinos Tatsiramos (IZA)
    Abstract: Despite the increased frequency of job loss for older workers in Europe, little is known on its effect on the work-retirement decision. Employing individual data from the European Community Household Panel for Germany, Italy, Spain, and the U.K., a multivariate competing-risks hazard model is estimated in which the effect of job displacement is identified separately for transitions into re-employment and retirement. The findings suggest that in countries with institutional provisions for older unemployed which offer a pathway to early retirement such as, Germany and Spain, older displaced workers exhibit lower reemployment and higher retirement rates compared to the non-displaced. These results are robust to dynamic selection due to unobserved heterogeneity and to the endogeneity of displacement.
    Keywords: job displacement, job loss, unemployment duration, retirement, competing risks
    JEL: J14 J26 J63 J64
    Date: 2007–09
  2. By: David Haardt
    Abstract: This paper analyses the relationship between cognitive functioning and employment among older men and women using data from the English Longitudinal Study of Ageing. Regression analysis shows that the change in cognitive functioning over time does not have any statistically significant effects on the probability to exit or enter employment, or on working hours. These results are not sensitive to the definition of work. My findings differ from earlier research on younger age groups in Germany and the USA where some effects of cognitive functioning on labour force participation were found.
    Keywords: Ageing; Cognitive functioning; ELSA; Labour force participation
    JEL: H19 J14 J22 J24 J26
    Date: 2007–08
  3. By: Michal Myck
    Abstract: How individual wages change with time, and how they are expected to change as individuals grow older, is one of crucial determinants of their behaviour on the labour market including their decision to retire. The profile of individual hourly wages has for a long time been assumed to follow an "inverse-U" path, although there has been little work specifically concerning the age-wage profile and documenting it convincingly. The focus of this paper is the relationship between age and wages with special attention given to individuals close to retirement. The analysis is presented in a comparative context for Britain and Germany looking at two longitudinal datasets (BHPS and GSOEP respectively) for years 1995-2004. It stresses the importance of cohort effects and selection out of employment which seem crucial in determining the downward-sloping part of the "inverse-U" profile observed in most cross-sections. There seems to be little evidence that wages fall with age.
    Keywords: Wage dynamics, ageing, selection
    JEL: J14 J21 J31 C14
    Date: 2007
  4. By: Karen M. Kobayashi
    Abstract: This paper focuses on the transitions that mark middle age (e.g., the ‘empty nest’, caregiving) and are triggered by the occurrence of life events in families (e.g., adult children leaving home, care for aging parents). It is noted that home-leaving by adult children has been taking longer in recent years, and in many instances adult children return to their natal home after having left. Support for older parents is becoming a significant issue in Canada as a result of population aging. Of course, the experience of such life events as taking care of older parents varies according to individuals’ situations, and these can be quite varied. The paper therefore examines some of the diversity of mid-life families by describing patterns of separation and divorce, remarriage, same-sex relationships, and childlessness. It concludes with a discussion of the relationship between mid-life families and social policy.
    Keywords: midlife, families, and intergenerational relationships
    JEL: J12 J13 Z00
    Date: 2007–06
  5. By: David G. Blanchflower (Dartmouth College and IZA); Andrew J. Oswald (University of Warwick and IZA)
    Abstract: We explore the idea that happiness and psychological well-being are U-shaped in age. The main difficulty with this argument is that there are likely to be omitted cohort effects (earlier generations may have been born in, say, particularly good or bad times). First, using data on 500,000 randomly sampled Americans and West Europeans, the paper designs a test that controls for cohort effects. A robust U-shape is found. Ceteris paribus, a typical individual’s well-being reaches its minimum - on both sides of the Atlantic and for both males and females - in middle age. We demonstrate this with a quadratic structure and non-parametric forms. Second, some evidence is presented for a U-shape in developing countries and the East European nations. Third, using measures that are closer to psychiatric scores, we document a comparable well-being curve across the life course in two other data sets: (i) in GHQ-N6 mental health levels for a sample of 16,000 Europeans, and (ii) in reported depression and anxiety among approximately 1 million U.K. citizens. Fourth, we document occasional apparent exceptions, particularly in developing nations, to the U-shape. Fifth, we note that American male birth cohorts seem to have become progressively less happy with their lives. Our paper’s results are based on regression equations in which other influences, such as demographic variables and income, are held constant.
    Keywords: happiness, aging, well-being, GHQ, cohorts
    JEL: D1 I3
    Date: 2007–09

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