nep-age New Economics Papers
on Economics of Ageing
Issue of 2009‒03‒14
six papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Shattered Dreams: The Effects of Changing the Pension System Late in the Game By de Grip, Andries; Lindeboom, Maarten; Montizaan, Raymond
  2. Understanding the Labour Market for Older Workers: A Survey By Heywood, John S.; Siebert, W. Stanley
  3. Age Effects and Heuristics in Decision Making By Sudipta Sarangi; Tibor Besedes; Cary Deck; Mikhael Shor
  4. Which European model for elderly care? Equity and cost-effectiveness in home based care in three European countries By Francesca Bettio; Giovanni Solinas
  5. Aging in Asia: Trends,Impacts and Responses By Menon, Jayant; Melendez-Nakamura, Anna
  6. From Duty to Right: The Role of Public Education in the Transition to Aging Societies By Sugimoto, Yoshiaki; Nakagawa, Masao

  1. By: de Grip, Andries (ROA, Maastricht University); Lindeboom, Maarten (Free University Amsterdam); Montizaan, Raymond (ROA, Maastricht University)
    Abstract: This paper assesses the impact of a dramatic reform of the Dutch pension system on mental health, savings behavior and retirement expectations of workers nearing retirement age. The reform means that public sector workers born on January 1, 1950 or later face a substantial reduction in their pension rights while workers born before this threshold date may still retire under the old, more generous rules. We employ a unique matched survey and administrative data set comprising male public sector workers born in 1949 and 1950 and find strong ex ante effects on mental health for workers who are affected by the reform. This effect increases as birth dates approach the threshold date. Furthermore, the effects differ in accordance with worker characteristics. Finally, we find that the response of those affected by the reform is to work longer and to save more.
    Keywords: mental health, retirement, pension reform, causal effect
    JEL: I12 J08 J14 J26
    Date: 2009–02
  2. By: Heywood, John S. (University of Wisconsin, Milwaukee); Siebert, W. Stanley (University of Birmingham, UK)
    Abstract: The paper asks why retirement can be so abrupt in countries such as France (½% of the workforce over 65), yet staged in Japan (8% over 65). We find part of the answer in tax laws that prevent people working and receiving a pension, and make little allowance for fair pension increases if retirement is deferred. While these laws have begun to change, we find another part of the answer in employment protection laws. These laws coupled with inflexible collectively agreed wages make employers choosy about hiring the old. The advent of "age discrimination" law reinforces employment protection and may well reduce older workers' hiring opportunities especially where wages are rigid.
    Keywords: mandatory retirement, deferred pay, age discrimination, older workers
    JEL: I38 J32 J71
    Date: 2009–02
  3. By: Sudipta Sarangi; Tibor Besedes; Cary Deck; Mikhael Shor
    Abstract: We examine in controlled experiments how individuals make choices when faced with multiple options. The choice tasks mimic the selection of health insurance, prescription drug, or retirement savings plans. However, in our experiment, the available options can be objectively ranked. We find that the probability of a person selecting the optimal option declines as the number of options increases, with the decline more pronounced for older subjects. Heuristics seem to differ by age with older subjects relying more on suboptimal decision rules. Behavior consistent with the estimated decision rules is observed in an out-of-sample experiment.
  4. By: Francesca Bettio; Giovanni Solinas
    Abstract: Long term care for the elderly is growing apace in developed economies. As growth is forcing change in existing production and delivery systems of elderly care services, the question arises as to how different systems compare in terms of cost-effectiveness, equity or quality. Based on an in depth survey carried out in Denmark, Ireland and Italy – the GALCA survey - this articles compares prevailing arrangements of home based long-term care in these three countries, focussing on the overall cost-effectiveness of the provisions as well as on employment equity for the care workers. The first set of comparisons is between alternative types of provisions within each country, and the results suggests that home based care is generally, although not consistently, more cost-effective than care within institutions. The second set of comparisons is between the average provision package in the different countries and suggests that, whereas the Italian and the Danish systems are the most cost effective, the Danish system is more equitable, overall. The results for cost-effectiveness for Italy are partly explained by progressive replacement of unpaid family carers with low cost immigrant workers directly employed by the families and often cohabiting with the elderly (the immigrant-in the family-model). This new model of long term care is spreading across Southern Europe and raises complex issues of equity and sustainability from an employment perspective.
    Keywords: ederly care, cost-effectiveness, migration, welfare
    JEL: I12 I39 J14
    Date: 2009–03
  5. By: Menon, Jayant (Asian Development Bank); Melendez-Nakamura, Anna (Asian Development Bank)
    Abstract: By the middle of this century, Asia's elderly population is projected to reach 922.7 million, and its share of population 17.5%, from just 4.1% in 1950. Within the next few decades, Asia is poised to become the oldest region in the world; reforming policies and creating new structures and institutions to address this challenge is a huge and complex undertaking that requires a big head-start. This paper analyzes the impact that aging is having in Asia, examines the policy options for dealing with the problems it is causing, and outlines how different sub-regions may require different responses.
    Keywords: Aging Asia; Asian demographic transition; Asian population trends; Asian population forecasts; aging impact
    JEL: J11 J14 J18
    Date: 2009–02–01
  6. By: Sugimoto, Yoshiaki; Nakagawa, Masao
    Abstract: This paper argues that the introduction of compulsory schooling in early industrialization promoted the growth process that eventually led to a vicious cycle of population aging and negative pressure on education policy. In the early phases of industrialization, public education was undesirable for the young poor who relied on child labor. Compulsory schooling therefore discouraged childbirth, while the accompanying industrialization stimulated their demand for education. The subsequent rise in the share of the old population, however, limited government resources for education, placing heavier financial burdens on the young. This induced further fertility decline and population aging, and the resulting cycle may have delayed the growth of advanced economies in the last few decades.
    Keywords: Compulsory Education; Fertility; Generational Conflict; Growth.
    JEL: H50 J10 C70 O40 J20
    Date: 2009–03–07

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