nep-age New Economics Papers
on Economics of Ageing
Issue of 2008‒10‒13
four papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Population Ageing, Labour Market Reform and Economic Growth in China - A Dynamic General Equilibrium Analysis By Xiujian Peng; Yinhua Mai
  2. Informal Care and Labor Supply By Fevang, Elisabeth; Kverndokk, Snorre; Roed, Knut
  3. Analysis of Intergenerational Inequality: the Role of Public Expenditure and Taxation By Emanuele, Canegrati
  4. Estimates of Intergenerational Elasticities Based on Lifetime Earnings By Nilsen, Øivind Anti; Vaage, Kjell; Aakvik, Arild; Jacobsen, Karl

  1. By: Xiujian Peng; Yinhua Mai
    Abstract: The dramatic fertility decline since the beginning of 1970s has decelerated the growth of China's working age population. From 2015, this growth will turn sharply negative, resulting declining labour force in China. This has caused concerns about the sustainability of China's economic growth. This paper sheds lights on the view that a more efficient allocation of labour between sectors is likely counter balance the negative effect of populating ageing. Using a dynamic CGE model of China, we analyse the effects of removing labour market distortions that hinder the movement of labour from agricultural to manufacturing and services sectors over the period 2008 to 2020 in the context of declining growth of labour supply in China. Simulation results shows that removing the discriminations against rural workers in urban area will increase the labour shift from agricultural to non-agricultural sectors. The resulting increase in the movement of rural labour will mitigate the adverse effects of population ageing by raising not only the growth rate of total output but also household living standard. China can enjoy continued growth in its manufactured exports even with a slower growth in its labour force.
    Keywords: population ageing, labour market reform, rural migration, CGE model, China
    JEL: J21 J61 E17
    Date: 2008–05
  2. By: Fevang, Elisabeth (Ragnar Frisch Centre for Economic Research); Kverndokk, Snorre (Ragnar Frisch Centre for Economic Research); Roed, Knut (Ragnar Frisch Centre for Economic Research)
    Abstract: Based on Norwegian register data we show that having a lone parent in the terminal phase of life significantly affects the offspring's labor market activity. The employment propensity declines by around 1 percentage point among sons and 2 percentage points among daughters during the years just prior to the parent's death, ceteris paribus. Long-term sickness absence increases sharply. The probability of being a long-term social security claimant (defined as being a claimant for at least three months during a year) rises with as much as 4 percentage points for sons and 2 percentage points for daughters. After the parent's demise, earnings tend to rise for those still in employment while the employment propensity continues to decline. The higher rate of social security dependency persists for several years.
    Keywords: elderly care, labor supply, ageing, inheritance
    JEL: J14 J22
    Date: 2008–09
  3. By: Emanuele, Canegrati
    Abstract: In this paper I analyse the impact of public expenditure and income taxation on intergenerational inequality for seventeen countries. Age group Gini index is calculated by using data from the Luxemburg Income Study (LIS). Results are very robust in demonstrating that only income taxation is able to influence the level of intergenerational inequality, since it directly a¤ects the wealth of households. Otherwise, public expenditure seems to have no impact on individuals' welfare, even if we consider public expenditure components which should be tailored for specific cohorts. Different hypotheses on standard errors are considered, in order to detect the presence of one-way or two-way fixed effects.
    Keywords: Age group inequality; Public Expenditure; Income Taxa- tion
    JEL: E62 D63 H24
    Date: 2008–10–06
  4. By: Nilsen, Øivind Anti (Norwegian School of Economics and Business Administration); Vaage, Kjell (University of Bergen); Aakvik, Arild (University of Bergen); Jacobsen, Karl (Statistics Norway)
    Abstract: Using Norwegian intergenerational data with a substantial part of the life-cycle earnings of children and almost the entire life-cycle earnings for their fathers, we present new estimates of intergenerational mobility. Extending the length of the fathers' earnings windows from 5 to 30 years increases the estimated elasticities. Increasing the age of father at observation has the opposite effect. Our findings indicate that intergenerational earnings mobility may have been strongly overstated in many earlier studies with shorter earnings histories. Biases in the estimated elasticities appear to be related to age and/or life-cycle measurement errors more than persistency in the transitory innovations.
    Keywords: intergenerational mobility, measurement error
    JEL: J62 C23
    Date: 2008–09

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