nep-age New Economics Papers
on Economics of Ageing
Issue of 2009‒06‒17
three papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Health Shocks and Retirement: The Role of Welfare State Institutions By Datta Gupta, Nabanita; Larsen, Mona
  2. Extending Life Cycle Models of Optimal Portfolio Choice: Integrating Flexible Work, Endogenous Retirement, and Investment Decisions with Lifetime Payouts By Jingjing Chai; Wolfram Horneff; Raimond Maurer; Olivia S. Mitchell
  3. Poverty and disability among elderly in India: evidences from household survey By Pandey, Manoj K.

  1. By: Datta Gupta, Nabanita; Larsen, Mona
    Abstract: We investigate the effect of an acute health shock on retirement among elderly male workers in Denmark, 1991-1999, and in particular whether various welfare state programs and institutions impinge on the retirement effect. The results show that an acute health event increases the retirement chances of elderly male workers by 8%, and that this increase in the baseline retirement probability is not affected by eligibility to early exit programs and persists even after accounting for selection due to take-up of disability pension. Neither is it affected by the relatively long duration of sickness benefits in Denmark nor by the promotion of corporate social responsibility initiatives since the mid-1990s. In the late 1990s, however, the retirement rate following a health shock is reduced to 3% with the introduction of the subsidized employment program (fleksjob) but this effect is on the margin of being significant. For the most part, the retirement effect following a health shock seems to be immune to the availability of a multitude of government programs for older workers in Denmark.
    Keywords: retirement; health shocks; welfare state programs; medical diagnoses
    JEL: I12 I18 J26
    Date: 2007–08–10
  2. By: Jingjing Chai; Wolfram Horneff; Raimond Maurer; Olivia S. Mitchell
    Abstract: This paper derives optimal life cycle portfolio asset allocations as well as annuity purchases trajectories for a consumer who can select her hours of work and also her retirement age. Using a realistically-calibrated model with stochastic mortality and uncertain labor income, we extend the investment universe to include not only stocks and bonds, but also survival-contingent payout annuities. We show that making labor supply endogenous raises older peoples' equity share; substantially increases work effort by the young; and markedly enhances lifetime welfare. Also, introducing annuities leads to earlier retirement and higher participation by the elderly in financial markets. Finally, if we allow for an age-dependent leisure preference parameter, this fits well with observed evidence in that it generates lower work hours and smaller equity holdings at older ages as well as sensible retirement age patterns.
    JEL: D01 D11 D14 G11 G22 G23 H31 H55 J14 J26
    Date: 2009–06
  3. By: Pandey, Manoj K.
    Abstract: The paper examines the causal relationship between disability and poverty among Indian elderly. Using different poverty measures and statistical tests, the paper also attempts to analyze the depth of poverty among disabled elderly. A special round of National Sample Survey data on disability is used for this purpose. The results confirm the hypothesis of causal relationship between poverty and disability. Further, our analysis suggests for higher level of poverty and income inequality among disabled elderly and differences in the income levels vary significantly across different age groups, gender, social group and educational status.
    Keywords: Poverty; Disability; Inequality; Poverty measures; Elderly; Estimation
    JEL: C13 J14 D63 I32
    Date: 2009–06–05

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