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on Economics of Ageing |
| By: | Vodopivec, Milan (World Bank); Arunatilake, Nisha (Institute for Policy Studies of Sri Lanka) |
| Abstract: | Sri Lanka’s population is predicted to age very fast during the next 50 years, bringing a slowdown of labor force growth and after 2030 its contraction. Based on an original, 2006 representative survey of old people in Sri Lanka conducted as a part of this study, the paper examines labor market consequences of this process, focusing on retirement pathways and the determinants of labor market withdrawal. The paper finds that a vast majority of Sri Lankan old workers are engaged in the informal sector, work long hours, and are paid less than younger workers. Moreover, as one of the first findings of its kind, the paper shows that labor market duality that characterizes most developing countries carries over to old age: (i) previous employment is the most important predictor of the retirement pathway; (ii) older workers fall into two categories: civil servants and formal private sector workers, who generally stop working before they reach 60 because they are forced to do so by mandatory retirement regulations, and casual workers and the self-employed, who are forced to work until very old age (or death) due to poverty and who stop working primarily because of poor health; and (iii) the option of part-time work is used primarily by workers who held regular jobs in their prime age employment, but not by casual workers and self-employed. |
| Keywords: | population aging, labor supply of old workers, labor demand for old workers |
| JEL: | J11 J14 J26 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3456&r=age |
| By: | Gisela Hostenkamp; Michael Stolpe |
| Abstract: | This study investigates the role of stratification of health and income in the social cost of health-related early retirement, as evidenced in the German Socio-economic Panel (GSOEP). We interpret early retirement as a mechanism to limit work-related declines in health that allows poorer and less healthy workers to maximize the total discounted value of annuities received from Germany’s pay-as-you-go pension system. Investments in new medical technology and better access to existing health services may help to curb the need for early retirement and thus improve efficiency, especially amid population ageing. To value the potential gains, we calibrate an intertemporal model based on ex post predictions from stratified duration regressions for individual retirement timing. We conclude that eliminating the correlation between income and health decline would delay the average age of retirement by approximately half a year, while keeping all workers in the highest of five categories of self assessed health would yield a further delay of up to three years. Had this scenario been realized during our 1992–2005 sample period, we estimate the social costs of early retirement would have been more than 20 percent lower, even without counting the direct social benefits from better health |
| Keywords: | Retirement timing, Health inequality, Social costs, Medical technology, Calibration |
| JEL: | H55 I12 O15 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1415&r=age |
| By: | David A. Love; Paul A. Smith; Lucy C. McNair |
| Abstract: | We construct two measures of the current wealth adequacy of older U.S. households using the 1998--2006 waves of the Health and Retirement Study (HRS). The first is the ratio of "comprehensive wealth"--defined as net worth plus the expected value of future income streams--to the wealth that would be needed to generate expected poverty-line income in future years. By this measure, we find that the median older U.S. household is reasonably well situated, with a "poverty ratio" of about 3.9 in 2006. However, we find that about 18 percent of households have less wealth than would be needed to generate 150 percent of poverty-line income over their expected future lifetimes. Our second measure is the ratio of the annuitized value of comprehensive resources to pre-retirement earnings. This measure identifies a median "replacement rate" of about 105 percent, with about 13 percent of households experiencing replacement rates of less than 50 percent. Comparing the leading edge of the baby boomers in 2006 to households of the same age in 1998, we find that the baby boomers show slightly less wealth, in real terms, than their elders did, and single boomers show a bit higher incidence of "inadequacy" than did their elders. Nonetheless, the median single boomer appears to have adequate resources. Moreover, we find a rising age profile of annualized wealth, even within households over time and after controlling for other factors, suggesting that older households are not spending their wealth as quickly as their survival probabilities are falling. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2008-20&r=age |
| By: | Ulrich Thießen; Konstantin A. Kholodilin; Boriss Siliverstovs |
| Abstract: | In this study, we investigate whether population aging influences employment shares in different economic sectors. To this end, we employ dynamic panel data analysis. Our unbalanced data set comprises 54 countries and extends to a maximum time period from 1970 till 2004. Our results suggest that the aging variable - approximated by the ratio of elderly either to the total population or to the labor force - does have a statistically significant differentiated impact on the employment shares when controlling for other relevant factors, e.g., income per capita, share of trade in GDP, government consumption share in GDP, population size, etc. In particular, we find that an increase in the aging proxies exerts a statistically significant adverse effect on the employment shares in agriculture, manufacturing, construction, and mining and quarrying industries. At the same time, increasing share of the elderly people in the society positively affects employment shares in community, social, and personal services as well as in the financial sector. In the simulation exercise, we illustrate the effects of aging on the employment structure within the next 45 years. |
| Keywords: | Structural change, aging, employment shares, dynamic panel data |
| JEL: | J11 O57 C33 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp785&r=age |
| By: | Carine Franc (CERMES centre de recherche medecine, sciences, sante et societe); Marc Perronnin (IRDES institut for research and information in health economics); Aurelie Pierre (IRDES institut for research and information in health economics) |
| Abstract: | In France, private health insurance, that supplements public health insurance, is essential for access to health care. About 90% of the population is covered by a private contract and around half of them obtain their coverage through their employer. Considering the financial benefits associated with group contracts compared to individual contracts, we assume that the switching behaviors vary among different beneficiaries during the transition to retirement. Indeed, despite a 1989 law, the gap in premiums increases at retirement between group and individual contracts affords the opportunity to study the marginal price effect on switching behaviors. In this study, we consider the nature of the contract prior to retirement (compulsory or voluntary membership group contract and individual contract) as an indirect measure of the price effect. We focus on its role and check for a large number of individual characteristics that may influence the new retirees' health insurance demand. |
| Keywords: | private health insurance, retirement, switching behavior |
| JEL: | D12 G22 I19 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:irh:wpaper:dt9&r=age |
| By: | Katja Hanewald |
| Abstract: | This article provides a comprehensive econometric analysis of factors driving aggregate mortality rates over time. It differs from previous studies in this field by simultaneously considering an extensive set of macroeconomic, socio-economic and ecological factors as explanatory variables. Germany is chosen as an indicative example for other industrialized countries due to its advanced demographic transition process. Our regression analysis, which covers the time interval 1956-2004, indicates that sex- and age-specific mortality rates vary substantially in their response to external factors. Strongest associations are found with changes in real GDP, flu epidemics and the two life style variables alcohol and cigarette consumption in both univariate and multivariate setups. Further analysis shows that these effects are primarily contemporary, while other indicators such as weather conditions exert lagged effects. By combining variables in a multivariate model the share of explained data volatility can be substantially increased. |
| Keywords: | Aggregate mortality, business cycle, socio-economic factors, multivariate model |
| JEL: | I12 J11 C32 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2008-031&r=age |