nep-age New Economics Papers
on Economics of Ageing
Issue of 2009‒05‒30
eight papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Transfers, Consumption and Income over the Lifecycle in Germany By Fanny Annemarie Kluge
  2. A Structural Approach to Estimating the Effect of Taxation on the Labor Market Dynamics of Older Workers By Peter Haan; Victoria Prowse
  3. Labour Force Participation in the Euro Area: A Cohort Based Analysis. By Almut Balleer; Ramon Gomez-Salvador; Jarkko Turunen
  4. Labor Force Participation among Indian Elderly: Does Health Matter? By Manoj K Pandey
  5. On annuities: an overview of the issues By Ferro, Gustavo
  6. Why Is The World Getting Older? The Influence of Happiness on Mortality By Cahit Guven; Rudolph Saloumidis
  7. Ageing, marital status and its health implications: evidences from India By Pandey, Manoj K.
  8. What do we know about adult mortality and data quality in Peru? Mortality coverage levels and trends from recent decades By Mario Piscoya; Bernardo L. Queiroz

  1. By: Fanny Annemarie Kluge (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: This paper seeks to quantify all public and private interage monetary flows in Germany applying the National Transfer Account method. Germany's lifecycle deficit is shaped by long periods spent in education, early retirement, and low labor force participation rates among the older work force, resulting in a rather short surplus period. Germany is a picture book welfare state, over the last century the government took over more and more functions the family would once have absorbed. During the long dependent periods of childhood and old age, the main expenditures-including education for younger people and pensions and health care for older people-are publicly financed. Private consumption is low for these items. In contrast to public in-kind transfers, public cash transfers are highly skewed to the elderly. Special emphasis will be placed on differences in East/West lifecycle deficit patterns.
    Keywords: Germany
    JEL: J1 Z0
    Date: 2009–04
  2. By: Peter Haan; Victoria Prowse
    Abstract: We estimate a dynamic structural life-cycle model of employment, non-employment and retirement that includes endogenous accumulation of human capital and intertemporal non-separabilities in preferences. Additionally, the model accounts for the effect of the tax and transfer system on work incentives. The structural parameter estimates are used to evaluate the effects of a tax reform targeted at low income individuals on employment behavior and retirement decisions.
    Keywords: Life-cycle labor supply, income taxation
    JEL: C23 C25 J22 J64
    Date: 2009
  3. By: Almut Balleer (Universität Bonn, D-53012 Bonn, Germany.); Ramon Gomez-Salvador (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Jarkko Turunen (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.)
    Abstract: We use a cohort based model to analyse determinants of labour force participation for disaggregated groups of workers in the euro area and the five largest euro area countries. The model captures age and cohort effects as indicators of (unobserved) determinants of participation behaviour. We use these effects and observed determinants to construct trends and projections of labour supply. Our results suggest that age and cohort effects can account for a substantial part of the recent increase in participation. Cohort effects are particularly relevant for women with those born in the late 1960s and early 1970s more likely to participate over the life-cycle. There is substantial variation in the estimated age and cohort effects across countries. Looking forward, positive cohort effects for women are not large enough to compensate for the downward impact of population ageing on participation rates in the euro area. JEL Classification: J11, J21.
    Keywords: labour force participation, cohort analysis, labour market institutions.
    Date: 2009–05
  4. By: Manoj K Pandey
    Abstract: The paper analyzes the effect of health status on labour force participation for aged Indians. The potential endogeneity in health and labour force participation has been taken care of by using full information maximum likelihood (FIML) and estimation results are compared with alternative two-stage methods. Results show that health has a significant and positive effect on labour force participation of the aged. In order to keep enough supply of elderly in the labour market, sufficient health care is necessary and hence more investment in this sector is imperative.[MPRA Paper No. 15394]
    Keywords: self-reported health status; labour force participation; elderly; endogeneity; exogeneity; simultaneous equation model
    Date: 2009
  5. By: Ferro, Gustavo
    Abstract: Longevity is increasing in the whole world, and savings for retirement are growing quickly. There is a potential demand for certainty in the income streams for pensioners since old-fashioned pay-as-you-go systems became financially stressed. A financial product, the annuity contract, offers longevity insurance but the demand is scarce for various reasons, and the supply is reluctant because the rapid improvements in longevity threaten the profitability of the business. The instrument and its market is analyzed conceptually and empirically by means of an examination of the literature, and a discussion is made in order to ameliorate the understanding of an apparent paradox: why an interesting instrument is not more spread.
    Keywords: annuity; insurance; pension
    JEL: G22 G23
    Date: 2008–07
  6. By: Cahit Guven; Rudolph Saloumidis
    Abstract: World life expectancy has risen by around 20 years in the last 50 years. This period has also witnessed rising happiness levels around the world suggesting that happiness might be one of the causes behind the decline in mortality. We investigate the relationship between happiness and mortality using the German Socio-Economic Panel. We consider doctor visits, self-reported health, and presence of chronic illness as health measures. After controlling for initial health conditions, we find that happiness extends life expectancy. 10 percent increase in happiness decreases probability of death by four percent, and this effect is more pronounced for men and younger people. Happiness plays a more important role for chronically ill people in decreasing mortality than for those who are not chronically ill. The positive influence of happiness on mortality can offset the negative impact of chronic illness. Marriage decreases mortality and this effect appears to work through increased happiness.
    Keywords: happiness; mortality; health; chronic illness.
    JEL: I10 I12
  7. By: Pandey, Manoj K.
    Abstract: The paper examines the association between marital status and self-reported health status of Indian men and women of different ages. Estimation results reveal linkages between marital status and health and show that this relationship is sensitive to the age and gender. Based on findings, the paper argues that a specific marital status in a particular stage of life could be an important target group for health policy intervention.
    Keywords: Ageing; Self-reported Health Status; Marital Status; Ordered Probit Regression
    JEL: J14 J12 C31 J16 I10
    Date: 2008–10–26
  8. By: Mario Piscoya (Cedeplar-UFMG); Bernardo L. Queiroz (Cedeplar-UFMG)
    Abstract: Accurate knowledge of adult mortality levels and trends in the developing world is hampered by its widespread lack of complete vital registration systems. Although knowledge of infant and child mortality was once affect by the same problem, survey-based techniques have been more successful in estimating child and infant than adult mortality. The main objective of this paper is to estimate mortality rates for the population aged 5 and above, in Peru by sex. The study evaluates the degree of coverage, and corrects the level of mortality, when necessary, using different methodologies. The literature does not indicate the best method to investigate mortality data problems. Thus, the implementation of alternative methods will improve the understanding of the mortality levels and trends in Peru in recent decades.
    Keywords: Peru, adult mortality, demographic methods
    JEL: J10 J11 J19
    Date: 2009–05

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