nep-age New Economics Papers
on Economics of Ageing
Issue of 2009‒10‒03
four papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. All Work and No Play: Pecuniary Versus Non-Pecuniary Factors in the Labour Supply of the Elderly By J L Ford; K Park; S Sen
  2. Is Latin America retreating from individual retirement accounts? By Bertranou, Fabio; Calvo, Esteban; Bertranou, Evelina
  3. The effects of pension rights and retirement age on training participation: Evidence from a natural experiment By Montizaan Raymond; Cörvers Frank; Grip Andries de
  4. Older Americans On The Go: Financial and Psychological Effects of Moving By Esteban Calvo; Kelly Haverstick; Natalia A. Zhivan

  1. By: J L Ford; K Park; S Sen
    Abstract: Given falling birth rates, ageing baby boomers approaching retirement age as well as a pension crisis in most advanced economies, understanding the characteristics of the labour supply function of the elderly have taken on a new significance. Even in developing countries, with labour surplus economies, this is a major issue as these poor countries try to build a pension scheme with at least a minimum amount of state provision for the elderly. What motivates retired people to enter or continue in the labour force is the focus of our analysis. We use panel data from Korea which is an interesting country since it transited from developing to developed economy status within the last few decades and therefore exhibits characteristics of both underdevelopment and economic advancement. The econometric methods include probit models of: pooled data; panel data with random effects; and 2SCML, to allow for possible endogeneity bias induced by the self-declared health status of the elderly. We stress the crucial importance of pecuniary and non-pecuniary factors in determining labour supply of the elderly. Contrary to expectations, non-pecuniary factors such as health status are crucial in the decision-making process of whether to work or not to work for the elderly.
    Keywords: labour force participation of the retired, pension benefits, probit estimation, panel data, random effects, demographic factors, family background, helath status, income, assets
    JEL: J14 J26 J32 C23 C25
    Date: 2009–07
  2. By: Bertranou, Fabio; Calvo, Esteban; Bertranou, Evelina
    Abstract: This brief reviews two rounds of pension reforms in ten Latin American countries to determine whether they are moving away from individual retirement accounts (IRAs). Although the idea is provocative, we conclude that the notion of “moving away from IRAs” is insufficient to characterize the new politics of pension reform. As opposed to the politics of enactment of IRAs of the late twentieth century, pension reform in Latin America in recent years has combined significant comeback of public components in old-age income support with improvement of IRAs. Clearly, the policy prescriptions that were most influential during the first round of reforms in Latin America have been re-evaluated. The World Bank and other organizations that promoted IRAs have recognized that pension reform should pay more attention to poverty reduction, coverage and equity, and to protect participants from market risks. The experience and challenges faced by countries that introduced IRAs, the changes in policies by international financing institutions, and the recent financial volatility and heavy losses experienced in financial markets may have tempered the enthusiasm of other countries from applying the same type of reforms. Scholars and policymakers around the globe could benefit from looking closely at these changes in pension policy.
    Keywords: pension reform; pension policy; social security; retirement; Latin America
    JEL: J3 G23 O54 H5
    Date: 2009
  3. By: Montizaan Raymond; Cörvers Frank; Grip Andries de (ROA rm)
    Abstract: This paper uses a natural experiment approach to identify the effects of an exogenouschange in future pension benefits on workers’ training participation. We use uniquematched survey and administrative data for male employees in the Dutch public sectorwho were born in 1949 or 1950. Only the latter were subject to a major pension reformthat diminished their pension rights. We find that this exogenous shock to pension rightspostpones expected retirement and increases participation in training courses amongolder employees, although exclusively for those employed in large organizations.
    Keywords: education, training and the labour market;
    Date: 2009
  4. By: Esteban Calvo; Kelly Haverstick; Natalia A. Zhivan
    Abstract: Moving is an important decision for any homeowner, requiring one to weigh the familiar comforts of a home and neighborhood against the uncertain potential of a new location. A move decision may be even more challenging for an older person. On the one hand, older people often have a decades-long attachment to their current residence. On the other hand, they may face new opportunities (ample leisure time) or challenges (the loss of a spouse) that affect their desire or ability to stay where they are. This brief is the second of two examining moving decisions among older Americans. The first brief covered how often older households move, where they move, and their stated reasons for moving. An initial analysis of these reasons indicated two general types of movers: those who are able to affirmatively plan a move (“Planners”) and those who react to a change in their circumstances that may force them to relocate (“Reactors”). Given the different stated motivations of these movers, the determinants and consequences of their move decisions may vary. This brief tests these hypotheses, using the Health and Retirement Study. The first section introduces the sample of households used in the analysis. The second section analyzes what characteristics influence a decision to move. The third section looks at the impact of moving on home equity, while the fourth section considers the impact on psychological well-being. The final section concludes.
    Date: 2009

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