nep-age New Economics Papers
on Economics of Ageing
Issue of 2008‒01‒12
five papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Using Statistics Canada LifePaths Microsimulation Model to Project the Health Status of Canadian Elderly By Jacques Légaré; Yann Décarie
  2. Subjective Health Assessments and Active Labor Market Participation of Older Men: Evidence from a Semiparametric Binary Choice Model with Nonadditive Correlated Individual-Specific Effects By Jürgen Maurer; Roger Klein; Francis Vella
  3. The Role of Coping Humour in the Physical and Mental Health of Older Adults By Elsa Marziali; Lynn McDonald; Peter Donahue
  4. Sweden’s Pensioners: How They Have Fared in the Roller Coaster Ride through the Past Decade and a Half of Deep Recession and Economic Exuberance By Björn Gustafsson; Mats Johansson; Edward Palmer
  5. In the core of longevity risk: hidden dependence in stochastic mortality models and cut-offs in prices of longevity swaps By Stéphane Loisel; Daniel Serant

  1. By: Jacques Légaré; Yann Décarie
    Abstract: Complex population projections usually use microsimulation models; in Canada, Statistics Canada has developed a global dynamic microsimulation model named LifePaths in the Modgen programming language to be used in policy research. LifePaths provides a platform to build on for our research program, conjointly with Dr Janice Keefe from Mount Saint Vincent University, on projections of the Canadian chronic homecare needs for the elderly up to 2031 and of the human resources required. Beside marital status, family networks and living arrangements, future health status of the elderly is a key variable, but an intricate one. Since health status transitions were previously conditioned only on age and sex, we will use here the current disability module of LifePaths with longitudinal data from Canada’s National Population Health Survey (NPHS). These new health status transitions are considering other significant explicative variables like marital status, education etc. We will then present projections of future Canadian elderly by health status and a comparison with nine European countries for the Future Elderly Living Conditions in Europe (FELICIE) Research Program which has used the same approach. Our previous researches have shown the importance of future disability level for the management of an elderly society. The main output of the present paper would first produce, with new health scenarios, new estimates for Canada of elderly in poor health, for those aged 75 and over. Secondly, it would produce an interesting comparative analysis, useful especially for implementing new policies for the well-being of the Canadian elderly.
    Keywords: Microsimulation, Elderly population, Aging, LifePaths, Health, Canada
    JEL: C15 I19
    Date: 2008–01
  2. By: Jürgen Maurer (MEA, University of Mannheim); Roger Klein (Rutgers University); Francis Vella (Georgetown University and IZA)
    Abstract: We use panel data from the US Health and Retirement Study 1992-2002 to estimate the effect of self-assessed health limitations on active labor market participation of men around retirement age. Self-assessments of health and functioning typically introduce an endogeneity bias when studying the effects of health on labor market participation. This results from justification bias, reflecting an individual’s tendency to provide answers which "justify" his labor market activity, and individual-specific heterogeneity in providing subjective evaluations. We address both concerns. We propose a semiparametric binary choice procedure which incorporates potentially nonadditive correlated individual-specific effects. Our estimation strategy identifies and estimates the average partial effects of health and functioning on labor market participation. The results indicate that poor health and functioning play a major role in the labor market exit decisions of older men.
    Keywords: health, retirement, nonadditive correlated effects, semiparametric estimation
    JEL: I10 J10 J26 C14 C30
    Date: 2007–12
  3. By: Elsa Marziali; Lynn McDonald; Peter Donahue
    Abstract: Objectives - This study examined the associations among coping humor, other personal/social factors, and the health status of community-dwelling older adults. Method - Survey questionnaires were completed with 73 community dwelling older adults. Included were measures of coping humor, spirituality, self-efficacy, social support and physical and mental health status. Results - Correlations across all variables showed coping humor to be significantly associated with social support, self-efficacy, depression, and anxiety. Forward stepwise regression analyses showed that coping humor and self-efficacy contributed to outcome variance in measures of mental health status. Contrary to expectation, neither social support nor spirituality contributed to the total outcome variance on any of the dependant measures. Conclusion - The importance of spirituality, self-efficacy and social support in determining the quality of life of older adults is well supported in the literature. Coping humor as a mechanism for managing the inevitable health stresses of aging has received less attention. This study shows that coping humor and self efficacy are important factors for explaining health status in older adults. Correlations among coping humor, self efficacy, and social support suggest that a sense of humor may play an important role in reinforcing self-efficacious approaches to the management of health issues.
    Keywords: coping humor, aging, health status
    JEL: I19
    Date: 2007–12
  4. By: Björn Gustafsson (University of Göteborg and IZA); Mats Johansson (Swedish Social Insurance Agency); Edward Palmer (Uppsala University and Swedish Social Insurance Agency)
    Abstract: This study analyses the development of the economic well-being of the elderly in Sweden since 1990 - a period characterized by increased influence from the financial market and extreme economic events - using data from the Household Income Survey. The elderly were not isolated as pensions were cut, full indexation abandoned and taxes increased during Sweden’s deep recession in the 1990s. Instead, relatively, pensioners fared better than the working age population. On the other hand, poverty increased in absolute terms. In contrast in the following years of rapid economic growth, the growth in the income of the pensioners fell behind that of workers and relative poverty increased. The analysis shows that the limited resources of many of the elderly put them close to a socially interesting poverty line. Income inequality among the elderly has increased with an increase in the importance of capital income for the better off among the elderly, with a clear tendency towards delineation between the better and worse off, which we conclude has implications for public expenditures for the elderly. Overall, poverty among the elderly in Sweden remains low in an international perspective and our analysis leads us to conclude that the Swedish welfare state has maintained its resilience.
    Keywords: Sweden, pensions, income, poverty, income inequality
    JEL: D31 H55 I32 J14
    Date: 2007–12
  5. By: Stéphane Loisel (SAF - EA2429 - Laboratoire de Science Actuarielle et Financière - Université Claude Bernard - Lyon I); Daniel Serant (SAF - EA2429 - Laboratoire de Science Actuarielle et Financière - Université Claude Bernard - Lyon I)
    Abstract: In most stochastic mortality models, either one stochastic intensity process (for example a jump-diffusion process) or a collection of independent processes is used to model the stochastic evolution of survival probabilities. We propose and calibrate a new model that takes inter-age correlations into account. The so-called stochastic logit's Deltas model is based on the study of the multivariate time series of the differences of logits of yearly mortality rates. These correlations are important and we illustrate our study on a real-life portfolio. We determine their impact on the price of a longevity swap type reinsurance contract, in which most of the financial risk is taken by a third party. The hypotheses of our model are statistically tested and various measures of risk of the present value of liabilities are found to be significantly smaller in our model than in the case of one common underlying stochastic process.
    Keywords: Longevity risk; longevity swap; inter-age correlations; stochastic mortality; multivariate process; logit; Lee-Carter
    Date: 2007–12

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