nep-age New Economics Papers
on Economics of Ageing
Issue of 2009‒11‒07
five papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. The Impact of Population Ageing on the Czech Economy By Jan Babecky; Kamil Dybczak
  2. Eliciting Individual Preferences for Pension Reform By Abid Fourati, Yosr; O'Donoghue, Cathal
  3. Chronic Health Conditions: Changing Prevalence in an Aging Population and Some Implications for the Delivery of Health Care Services By Frank T. Denton; Byron G. Spencer
  4. Population ageing and endogenous economic growth By Klaus Prettner
  5. Is Posner Right? An Empirical Test of the Posner Argument for Transferring Health Spending from Old Women to Old Men By Wunder, Christoph; Schwarze, Johannes

  1. By: Jan Babecky; Kamil Dybczak
    Abstract: The Czech Republic is facing a population ageing phenomenon. In addition, its demographic structure is expected to change dramatically over the next 50 years. We apply a stylised overlapping generation model in order to analyse the potential effects of the expected demographic changes on aggregate economic performance taking into account alternative fiscal policy set-ups. We provide a rough estimate of the amendments necessary on the revenue and expenditure sides in order to keep the current system financially balanced. We also discuss the implications for the development of other economic variables. In particular, we separately simulate future developments in the cases of adjustment in either the contribution rate or the value of public benefit. In addition, we demonstrate that parametric changes, such as an increase in the statutory retirement age, cannot eliminate the impact of the deterioration in the demographic structure on the course of the economy.
    Keywords: Population ageing, public pension systems, social security.
    JEL: E27 J11 H55
    Date: 2009–09
  2. By: Abid Fourati, Yosr (National University of Ireland, Galway); O'Donoghue, Cathal (Teagasc Rural Economy Research Centre)
    Abstract: Pension systems have recently been under scrutiny because of the expected population ageing threatening its sustainability. This paper's contribution to the debate is from a political economic perspective as it uses data from a choice experiment to investigate individual preferences for an alternative state pension scheme based around preferences for cost, poverty, retirement age and pension parameters. Answers are used to estimate a lifecycle utility model of preferences towards pensions' parameters. Results suggest that individuals’ value orientation is an important determinant of their preferences. Respondents' income determines which degree of redistribution is preferred. However, preferences according to age are in contradiction with what is suggested in theory.
    Keywords: redistribution, pension system reform, population ageing, stated preferences
    JEL: H0 I3
    Date: 2009–10
  3. By: Frank T. Denton; Byron G. Spencer
    Abstract: Since the prevalence of many chronic health conditions increases with age we might anticipate that as the population ages the proportion with one or more such conditions would rise, as would the cost of treatment. We ask three questions: How much would the overall prevalence of chronic conditions increase in a quarter century if age-specific rates of prevalence did not change? How much would the requirements for health care resources increase in those circumstances? How much difference would it make to those requirements if people had fewer chronic conditions? We conclude that the overall prevalence rates for almost all conditions associated mostly with old age would rise by more than 25 percent and that health care requirements would grow more rapidly than the population – more than twice as rapidly in the case of hospital stays – if the rates for each age group remained constant. We conclude also that even modest reductions in the average number of conditions at each age could result in substantial savings.
    Keywords: Chronic conditions, aging population, health care resources
    JEL: I10 J14
    Date: 2009–10
  4. By: Klaus Prettner
    Abstract: This article investigates the consequences of population ageing for longrun economic growth perspectives. We introduce population ageing into a generalized model of endogenous technological change incorporating the model of Romer (1990) and Jones (1995) as special cases. We find that increases in longevity have positive effects on steady state per capita output growth in endogenous as well as in semiendogenous growth models. In the latter case, the positive dependence can also be shown for the equilibrium growth rate during transition to the steady state.
    Keywords: population ageing, endogenous technological change, long-run economic growth.
    Date: 2009–08
  5. By: Wunder, Christoph (University of Erlangen-Nuremberg); Schwarze, Johannes (University of Bamberg)
    Abstract: Posner (1995) proposes the redistribution of health spending from old women to old men to equalize life expectancy. His argument is based on the assumption that women's utility is higher if they are married. Thus, extending the lifespan of men would benefit women. Using life satisfaction data from the German Socio-Economic Panel Study (SOEP), we conduct an empirical test of this assumption. We apply a two-step estimation strategy: first, we use a propensity score matching approach to generate a control group of non-widowed women. The average level of life satisfaction in the control group serves as a reference to measure the degree of adaptation to widowhood. In the second step, the life satisfaction trajectories of both groups are estimated using penalized spline regressions. The results suggest bereavement has no enduring effect on life satisfaction, and that falsifies Posner's assumption.
    Keywords: widowhood, adaptation, subjective well-being, life satisfaction, penalized spline regression, propensity score matching
    JEL: C14 D10 I31
    Date: 2009–10

This nep-age issue is ©2009 by Claudia Villosio. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.