nep-age New Economics Papers
on Economics of Ageing
Issue of 2009‒01‒03
ten papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. The Role of Institutions in European Patterns of Work and Retirement By Agar Brugiavini; Axel Börsch-Supan; Enrica Croda
  2. A General Equilibrium Evaluation of the Sustainability of the New Pension Reforms in Italy By Riccardo Magnani
  3. Commuting costs and labor force retirement By Jorge González
  4. Emigration and the Age Profile of Retirement among Immigrants By Cobb-Clark, Deborah; Stillman, Steven
  5. Demographic Uncertainty in Europe Implications on Macro Economic Trends and Pension Reforms. An Investigation with the INGENUE2 Model By Michel Aglietta; Vladimir Borgy
  6. The Effect of Social Security, Demography and Technology on Retirement By Santos, Marcelo Rodrigues dos; Ferreira, Pedro Cavalcanti
  7. Youth Unemployment and Retirement of the Elderly: the Case of Italy By Agar Brugiavini; Franco Peracchi
  8. Does Aging Influence Sectoral Employment Shares? Evidence from Panel Datak By Ulrich Thiessen; Konstantin A. Kholodilin; Boriss Siliverstovs
  9. Older Workers and the Adoption of New Technologies By Meyer, Jenny
  10. Quantos são os centenários no Brasil? Uma estimativa indireta da população com 100 anos e mais com base no número de óbitos By Marília Miranda Forte Gomes; Cássio M. Turra

  1. By: Agar Brugiavini (Department of Economics, University Of Venice Cà Foscari); Axel Börsch-Supan (MEA Mannheim Research Institute for the Economics of Aging, University of Mannheim); Enrica Croda (Department of Economics, University Of Venice Cà Foscari)
    Abstract: This paper uses the Survey of Health, Ageing and Retirement in Europe (SHARE) to investigate the role of pension and social security institutions in shaping the European patterns of work and retirement. We provide evidence on the extent of “unused capacity” in labor force, on pathways to retirement and on the relationship between actual health status and disability take up. We find that institutional differences between countries explain much of the cross-national differences in work and retirement, while differences in health and demographics play only a minor role.
    Keywords: Aging, employment, retirement, health, disability, social security institutions, SHARE
    JEL: J14 J18 J26 J68 I12 C81
    Date: 2008
  2. By: Riccardo Magnani
    Abstract: Most European countries have recently introduced pension system reforms to face the financial problem related to population ageing. Italy is not an exception. The reforms introduced during the Nineties (Amato Reform in 1992 and Dini Reform in 1995), even if they will produce a strong reduction in pension benefits, are generally thought not sufficient to adequately face the population ageing problem. For this reason, in 2004, the Berlusconi government introduced a new reform that increases the retirement age to 60 years from January 2008 onwards, to 61 years from 2010 and to 62 from 2014. In 2007, the left-wing government replaced this reform with a softer one that fixes the minimum retirement age at 58 from 2008. Using an applied overlapping-generations general equilibrium model, we analyze the impact of the new reforms on the macroeconomic system and in particular on the long-run sustainability of the pension system. We show that the increase in the retirement age would permit to reduce pension deficits in the short and medium run, while in the long run these reforms would become ineffective.
    Keywords: Pension reforms; applied OLG models; immigration; endogenous growth
    JEL: D58 H55 J10
    Date: 2008–11
  3. By: Jorge González (Universidad de Alicante)
    Abstract: This paper studies whether the increase in home-workplace separation observed among U.S. older male workers in the last decades of the 20th century can partly account for earlier retirement. We first extend a conventional residential location-labor supply model in order to examine potential mechanisms linking commuting and retirement. After showing that, as a consequence of the urban residential equilibrium, it is possible that workers residing further from the workplace retire earlier, PSID data and an instrumental variables approach are combined in order to assess the nature and strength of the relation.
    Keywords: Retirement. Commuting. Instrumental variables.
    JEL: J26 R22
    Date: 2008–12
  4. By: Cobb-Clark, Deborah (Australian National University); Stillman, Steven (Motu Economic and Public Policy Research Trust)
    Abstract: This paper analyzes the relationship between immigrants' retirement status and the prevalence of return migration from the host country to their country of origin. We develop a simple theoretical model to illustrate that under reasonable conditions the probability of return migration is maximized at retirement. Reduced-form models of retirement status which control for the rate of return migration are then estimated using unique data on emigration rates matched to individual-level data for Australia. We find that immigrants, particularly immigrant women, are more likely to be retired than are native-born men and women with the same demographic, human capital, and family characteristics. Moreover, within the immigrant population, there is a negative relationship between the propensity to be retired and the return migration rate of one's fellow countrymen, particularly amongst men. This link is strongest for those individuals who are at (or near) retirement age and among those with the highest cost of return migration. These results suggest that the fiscal pressures associated with aging immigrant populations vary substantially across origin countries.
    Keywords: retirement, immigrants, return migration, emigration, Australia
    JEL: J26 J01 J08
    Date: 2008–12
  5. By: Michel Aglietta; Vladimir Borgy
    Abstract: Ageing is a main concern in Western Europe for the present half century. It impinges heavily upon the financing of retirement because a shrinking labour force will entail decelerating growth. Moreover, contrary to popular opinion and to most prospective studies which rely on deterministic demographic projections, the determinants of population size and structure are stochastic. The present paper makes use of the INGENUE2 model to assess the economic impact of demographic uncertainty in Western Europe. Demographic uncertainty affects saving, financial conditions and growth significantly from year 2025 onwards. Worst case scenarios can have crippling effects on the financing of public pension under present retirement policies. It makes all the more necessary to study alternatives. We simulate a policy that involves the development of a funding system to substitute to part of the projected increase in the contribution rate, both under deterministic and stochastic demographic forecasts
    Keywords: Computable General Equilibrium Models; international capital flows; life cycle models and saving; demographic trends and forecasts
    JEL: C68 F21 D91 J11
    Date: 2008–10
  6. By: Santos, Marcelo Rodrigues dos; Ferreira, Pedro Cavalcanti
    Abstract: This article investigates the causes in the reduction of labor force participation of the old. We argue that the changes in social security policy, in technology and in demography may account for most of the changes in retirement over the second part of the last century in the U.S. economy. We develop a dynamic general equilibrium model with endogenous retirement that embeds social security legislation. The model is able to match very closely the increase in the retirement rate of males aged 65 and older. It also quanti es the isolated impact on retirement and on the solvency of the social security system of the di¤erent factors. The model suggests that technological and demographic changes had a strong in uence on retirement, so that it would have increased signi cantly even if the social security rules had not changed. However, as the latter became much more generous in the past, changes in social security policy can account not only for a sizeable part of the expansion of retirement, but also for the most of the observed increase in the social security expenses as a share of GDP.
    Date: 2008–12
  7. By: Agar Brugiavini (Department of Economics, University Of Venice Cà Foscari); Franco Peracchi (University of Rome “Tor Vergata”)
    Abstract: This paper shows that the “lump of labor” assumption fails in Italy. The direct relationship between the unemployment rate of the young and the labor force participation of the old is pro-cyclical, i.e. a higher labor force participation of the old is related to a lower unemployment rate of the young. Hence both vary with the business cycle. In order to overcome endogeneity problems in explaining unemployment of the young, we resort to a simulated variable: “the inducement to retire”, which is constructed by simulating the social security benefits. We related the unemployment rate of the young to this incentive measure and find that a higher inducement to retire is associated to a higher unemployment rate – quite the opposite of the “young-in-old-out” story.
    Keywords: lump of labour, youth unemployment, early retirement
    JEL: H3 J2 J6
    Date: 2008
  8. By: Ulrich Thiessen (DIW Berlin); Konstantin A. Kholodilin (DIW Berlin); Boriss Siliverstovs (KOF Swiss Economic Institute)
    Abstract: Our study represents a first attempt to single out the effects of aging on the entire structure of the economy that is approximated by employment shares in different sectors. We find that even after controlling for the effects of other relevant factors—e.g. income per capita, share of trade in GDP, government consumption share in GDP, population size—aging does have a statistically significant differentiated impact on the employment shares. 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: 2008–12
  9. By: Meyer, Jenny
    Abstract: For the first time data of German ICT and knowledge intensive service providers are used to analyze the relation between the age structure of the workforce and the probability of adopting new technologies. The results show that firms with a higher share of younger employees are more likely to adopt new technologies and the older the workforce the less likely is the adoption of new technologies. Furthermore the results exhibit that the age structure of the workforce should be accompanied by appropriate workplace organization. A part of the firms which enhanced teamwork or flattened their hierarchies are actually more likely to adopt new technologies and software when they have a higher share of older employees whereas they are less likely to introduce new technologies if they have a higher share of younger employees.
    Keywords: age structure of the workforce, adoption of new technologies, ICT intensive services
    JEL: J14 O31
    Date: 2008
  10. By: Marília Miranda Forte Gomes (Cedeplar-UFMG); Cássio M. Turra (Cedeplar-UFMG)
    Abstract: The Brazilian population is rapidly aging. As a result, the number of centenarians has grown steadily over the last decades. According to IBGE, there were 13.865 and 24.476 centenarians of both sexes, respectively, in 1991 and 2000, representing an increase of 77 per cent in just nine years. Although expected, the increasing number of centenarians may be exaggerated by age misreporting at very old ages. In this article, we examine the consistency between the number of centenarians reported in the last two Brazilian censuses (1991 and 2000) and indirect estimates of this population calculated according to three methods: Extinct Generations, Rosenwaike (1968) and Coale & Caselli (1990). We find about four times more people in the census data than according to the indirect estimates. Uncertainty about the true size of old-age populations has important implications in data-deficient countries, particularly in the debate on adult mortality estimates.
    Keywords: centenarians, age misreporting, longevity
    JEL: J11
    Date: 2008–10

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