nep-age New Economics Papers
on Economics of Ageing
Issue of 2008‒01‒19
five papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Decision making and brand choice by older consumers By Laurent, Gilles
  2. Tax reform and retirement saving incentives: evidence from the introduction of stakeholder pensions in the UK By Richard Disney; Carl Emmerson; Matthew Wakefield
  3. What is a public sector pension worth? By Richard Disney; Carl Emmerson; Gemma Tetlow
  4. Better prepared for retirement? using panel data to improve wealth estimates of ELSA respondents By James Banks; Carl Emmerson; Gemma Tetlow
  5. Degrees of Development - How Geographic Latitude Sets the Pace of Industrialization and Demographic Change By Strulik, Holger

  1. By: Laurent, Gilles
    Abstract: Older adults constitute a rapidly growing demographic segment, but stereotypes persist about their consumer behavior. Thus, a more considered understanding of age-associated changes in decision making and choices is required. The authors's underlying theoretical model suggests that age-associated changes in cognition, affect, and goals interact to differentiate older consumers’ decision-making processes, brand choices, and habits from those of younger adults. They first review literature on stereotypes about the elderly and then turn to an analysis of age differences in the inputs (cognition, affect, and goals) and outputs (decisions, brand choices, and habits) of the choice process.
    Keywords: older consumers; decision making; choice
    JEL: D11 M31
    Date: 2007–10–01
  2. By: Richard Disney (Institute for Fiscal Studies and University of Nottingham); Carl Emmerson (Institute for Fiscal Studies); Matthew Wakefield (Institute for Fiscal Studies)
    Abstract: <p><p>Faced with ageing populations, OECD governments are seeking policies to increase individual retirement saving. In April 2001, the UK government introduced Stakeholder Pensions - a low cost retirement saving vehicle. The reform also changed the structure of tax-relieved contribution ceilings, increasing their generosity for lower earning individuals. We examine the impact of these changes on private pension coverage and on contributions to personal pension accounts using individual level micro data. </p></p>
    Date: 2007–11
  3. By: Richard Disney (Institute for Fiscal Studies and University of Nottingham); Carl Emmerson (Institute for Fiscal Studies); Gemma Tetlow (Institute for Fiscal Studies)
    Abstract: <p><p>We measure accruals in defined benefit (DB) pension plans for public and private sector workers in Britain, using typical differences in scheme rules and sector-specific lifetime age-earnings profiles by sex and educational group. We show not just that coverage by DB pension plans is greater in the public sector, but that median pension accruals as a % of salary are almost 5% higher among DB-covered public sector workers than covered private sector workers. This is largely driven by earlier normal pension (retirement) ages. For workers of different ages in the two sectors, marginal accruals also vary as a result of differences in earnings profiles across the sectors. The differences in earnings profiles across sectors should induce caution in using calculated coefficients on wages from cross sections of data in order to estimate sectoral wage effects. </p></p>
    JEL: H55 J32 J63
    Date: 2007–10
  4. By: James Banks (Institute for Fiscal Studies and University College London); Carl Emmerson (Institute for Fiscal Studies); Gemma Tetlow (Institute for Fiscal Studies)
    Abstract: <p>We compare the key assumptions underpinning estimates of the pension wealth of ELSA respondents to outcomes over the period from 2002-03 to 2004-05. We find that many of these assumptions have, on average, proved cautious or reasonable. Improving pension wealth calculations using this new evidence makes little difference to the distribution of pension wealth. Previous estimates of retirement resources also considered net financial, physical and housing wealth. Particularly cautious, ex-post, was the assumption that net housing wealth would remain constant in real terms. We find that average housing wealth has risen by almost 40% in nominal terms over just two years, which is in line with growth in the Nationwide House Price Index. This large increase in house prices boosts estimates of total wealth across the entire distribution of wealth. Previous research showed that once half of current net housing wealth was included as a retirement resource 12.6% of employees approaching retirement were estimated to have resources below the Pensions Commission's definition of adequacy. We show that taking into account the high growth in house prices between 2002-03 and 2004-05 reduces this to 10.9%, and that it would fall by a further 1.2 percentage points if house prices were to grow by 2.5% a year in real terms in the future.</p>
    Date: 2007–08
  5. By: Strulik, Holger
    Abstract: Successful economic development is usually characterized by two salient phenomena: industrialization and demographic transition. Chronologically both events happen so closely to each other that historians and economists alike suspect that they are interrelated. This paper develops a theory for their interaction with a special emphasis on the different pattern and pace of transition in cross-country comparison. For that purpose it rationalizes why a population grows at high rates at geographic locations of high extrinsic mortality. This mechanism is then used to explain why both demographic transition and structural change proceed at slower speed in countries of low absolute latitudes. It is also shown that at tropical locations the pace of transition can be so slow that it sometimes looks like as if societies got stuck in the midst of the process.
    Keywords: Industrialization, Structural Change, Demographic Transition, Geography, Health, Cross-Country Divergence
    JEL: J10 J13 O11 O12
    Date: 2008–01

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