nep-age New Economics Papers
on Economics of Ageing
Issue of 2009‒08‒08
seven papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Microsimulation of Pension Reforms: Behavioural versus Nonbehavioural Approach By Margherita Borella; Flavia Coda Moscarola
  2. Labour Force Participation in the Euro Area: A Cohort Based Analysis. By Almut Balleer; Ramon Gomez-Salvador; Jarkko Turunen
  3. The 60s Turnaround as a Test on the Causal Relationship between Sociability and Happiness By Leonardo Becchetti; Elena Giachin Ricca; Alessandra Pelloni
  4. Older Aboriginal Peoples in Canada – Demographics, Health Status and Access to Health Care By Mark W. Rosenberg; Kathi Wilson; Sylvia Abonyi; Adam Wiebe; Kelsey Beach; Robert Lovelace
  6. Pension Reform in an OLG Model with Multiple Social Security Systems By Çagaçan Deger
  7. Severity of Work Disability and Work By Oguzoglu, Umut

  1. By: Margherita Borella (University of Turin and CeRP-Collegio Carlo Alberto, Turin); Flavia Coda Moscarola (CeRP-Collegio Carlo Alberto, Turin)
    Abstract: We analyse the impact of various pension regimes, as shaped by recent Italian reforms, on retirement age, adequacy issues, and redistribution. We add to the literature on microsimulation by accounting for individuals’ reactions to financial incentives when deciding to retire. We find that shifting from a generous defined benefit (DB) system to an actuarially fair notional defined contribution (NDC) system induces individuals, particularly men, to postpone retirement. Voluntary postponement of retirement and, above all, participation in the second pillar would grant a comprehensive replacement rate (first plus second pillars) comparable to that obtained with the first pillar alone in the pre-reform DB regime.
    Keywords: Microsimulation, public pensions, retirement
    JEL: C63 H55 J26
    Date: 2009–04
  2. 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
  3. By: Leonardo Becchetti; Elena Giachin Ricca; Alessandra Pelloni
    Abstract: The nexus between social leisure and life satisfaction is riddled with endogeneity problems. In investigating the causal relationship going from the first to the second variable we start from considering that retirement is an event after which the time investable in (the outside job) relational life increases. We instrument social leisure with the probability of retirement of the three and four years younger cohorts. With such approach we document that social leisure has a positive and significant effect on life satisfaction. Our findings shed some light on the age-happiness pattern. Policy implications are also discussed.
    Keywords: Life satisfaction, relational goods, social capital
    JEL: I30 D61 A11 A13
    Date: 2009
  4. By: Mark W. Rosenberg; Kathi Wilson; Sylvia Abonyi; Adam Wiebe; Kelsey Beach; Robert Lovelace
    Abstract: This paper takes advantage of 2006 Census data, the Aboriginal Peoples Survey (APS) and the Canadian Community Health Survey (CCHS) to highlight some basic demographic trends among Older Aboriginal Peoples, their health status and their use of health services in the first part of this paper. In the second part of the paper, we connect the findings to what has been specifically written about Older Aboriginal Peoples, their health status and use of health services. Not surprisingly both the data analysis and literature are limited because the preponderance of data, analyses and the literature have focused on younger Aboriginal Peoples. In essence, this underscores the need for more in-depth research on Older Aboriginal Peoples as the demographics and health status of Aboriginal Peoples.
    Keywords: Older Aboriginal Peoples, First Nations, Inuit, Metis, health, health care, demographics
    JEL: I10
    Date: 2009–07
  5. By: Yongil Jeon; Sang-Young Rhyu; Michael P. Shields
    Abstract: We examine patterns in fertility during the demographic transition using a panel data set across 25 Asian countries for 1975-2003. The adult female literacy rate is used as an instrumental variable for the endogenous female labor force participation rate, which has been unsolved in the population literature. The preliminary panel data analysis suggests that relative cohort size is significant in explaining the decline in fertility before controlling for simultaneity bias. This result, however, may be spurious. After considering the instrumental variables estimation in the panel data structure, the age structure variable no longer plays a dominant role in explaining declining fertility rates in many Asian countries. Systematic differences were found between East and South Asia. A policy implication in South Asia is that development may reduce fertility directly through increasing income rather than indirectly through a change in female labor force participation or urbanization. In East Asia, the indirect effects dominate.
    Keywords: Fertility, Easterlin hypothesis, Transition Economies, Relative Cohort Size, Age Structure
    JEL: J13 P20
    Date: 2009–08
  6. By: Çagaçan Deger (Department of Economics, METU)
    Abstract: Primarily due to financial sustainability problems, social security reforms have been on the policy agenda of both developed and developing countries for the last decade. Research literature on the subject tends to use overlapping generations (OLG) models with single representative household and presents reforms as shock to the constructed model. This study presents an OLG model with three separate social security institutions where the heterogeneity is through different benefit payments and contribution rates. Convergence across various institutions is enabled by a replacement ratio shock and model dynamics are discussed.
    JEL: C68 D91 I38
    Date: 2008–10
  7. By: Oguzoglu, Umut (University of Manitoba)
    Abstract: This paper analyzes the effect of severity of disability on labour force participation by using a self-reported work limitation scale. A dynamic labour force participation model is used to capture the feedback effect of past participation on current participation. The results suggest that net of persistence and unobserved heterogeneity, differences in severity levels explain a significant portion of the variance in the participation rates among disabled individuals. Moreover, the disability is shown to have longer lasting adverse effects on female participation and work limited women will be more likely to benefit from the work requirements imposed on Disability Support Pension recipients.
    Keywords: severity, work disability, labour force participation
    JEL: J28 I12 C81
    Date: 2009–07

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