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on Economics of Ageing |
| By: | Javier Olivera (Catholic University of Leuven) |
| Abstract: | The distributional impact of the structural pension reform in Latin American countries has been largely absent in the economic debate. However, this reform may widen inequality in old-age and reduce welfare. In this paper we study the consequences of implementing a multi-pillar system in one of these countries. We take advantage of available administrative records for Peruvian workers to estimate inequality in pensions, pension debt and welfare. Overall, our results show that the pension debt and inequality can be substantially reduced without welfare losses. |
| Keywords: | Pension reform, pension inequality, social security, Latin America, Peru. |
| JEL: | H55 H63 I30 G23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2010-152&r=age |
| By: | Frank T. Denton; Ross Finnie; Byron G. Spencer |
| Abstract: | We analyse a large longitudinal data file to determine who has retired and to assess how successful they are in maintaining their incomes after retirement. Our main conclusions are as follows. First, in the two years immediately after retirement the aftertax income replacement ratios average about two-thirds when calculated across all ages of retirement. Second, the ratios tend to increase with the age of retirement. Third, the ratios increase with years in retirement, at least in the first few years. Finally, income replacement ratios are highest in the lowest income quartile and generally decline as income increases; within each quartile the replacement ratios are higher for those who retired later than for those retired earlier. |
| Keywords: | income replacement, retirement |
| JEL: | J26 D31 J14 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:261&r=age |
| By: | Ostrovsky, Yuri; Schellenberg, Grant |
| Abstract: | Data from the Longitudinal Administrative Data (LAD) base are used to compare the retirement status and earnings replacement rates achieved by individuals who were, and individuals who were not, Registered Pension Plan members in 1991 and/or 1992, when they were in their mid-fifties. Among men in this cohort, the likelihood of being retired at age 70 to 72 was about 4 to 14 percentage points higher among pension plan members than non-members. Data used for the study do not provide information on why RPP non-members tend to retire later than do members. Among retired individuals, earnings replacement rates did not differ significantly between RPP members and non-members. |
| Keywords: | Seniors, Income, pensions, spending and wealth, Pension plans and funds and other retirement income programs |
| Date: | 2009–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2009321e&r=age |
| By: | Macunovich, Diane (University of Redlands) |
| Abstract: | Older women's patterns of labor supply over the past forty years have differed markedly from those of younger women. Their labor force participation declined sharply during a period of rapid increase for younger women, and then increased significantly while younger women's plateaued and even declined. But there has been an apparent correspondence between the pattern of retirement among women aged 55-69, and the proportion of workers aged 25-34 working part-year and/or part-time. The latter was an effect of overcrowding among the baby boomers as they moved through the labor market. The former is hypothesized here to be a function of the increasing difficulty older women experienced in obtaining "bridge jobs" – part-year and/or part-time – between career and retirement. It has been demonstrated in earlier studies that older women – especially those in lower-wage jobs – often seek such bridge jobs before retirement. And in many cases these bridge jobs are not in the same industry or even occupation as the career job, leading one to suspect that in many cases there might be little transfer of skill or human capital. If this is the case, then the older workers would at least to some extent be in direct competition with younger workers for these jobs. Given difficulty in finding bridge jobs, a higher proportion of older workers might choose to enter retirement directly from career jobs, skipping the bridge jobs. A relative cohort size measure – the number of 25-34 year old women working part-year and/or part-time, relative to the number of older women, at the state level – has been shown here to be highly significant – both statistically and substantively – in explaining changes in older women's annual hours worked, labor force participation, and propensity to retire. In general terms, relative cohort size can be said to have generated between 15-30% of the observed changes in these variables, with the strongest effects being on the propensity to claim Social Security benefits. Somewhat stronger effects were found for older men, in a companion to this study. |
| Keywords: | retirement, women's labor supply, labor force participation, relative cohort size, relative wage, part-time employment, bridge jobs, baby boom |
| JEL: | J14 J21 J22 J26 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4653&r=age |
| By: | Nicole Maestas; Julie Zissimopoulos |
| Abstract: | Population aging is not a looming crisis of the futureÑit is already here. The ultimate impact of population aging on our standard of living in the future depends a great deal on how long people choose to work before they retire from the labor force. Here there is reason for optimism. In this paper the authors document the striking shift in the U.S. population age distribution well under way, identify the primary reasons for the historic turnaround in labor force participation, and argue that forces such as changes in the structure of employer-provided pensions and Social Security are likely to propel future increases. They explore the diversity of adaptations already at play in the labor market as older men and women seek to extend their working lives and finally, relate these findings in the U.S. to other OECD countries. |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:728&r=age |
| By: | Macunovich, Diane (University of Redlands) |
| Abstract: | The United States has experienced over the past forty years an apparent correspondence between the pattern of retirement among men aged 55-69, and the proportion of workers aged 25-34 working part-year and/or part-time. The latter was an effect of overcrowding among the baby boomers as they moved through the labor market. The former is hypothesized here to be a function of the increasing difficulty older men experienced in obtaining "bridge jobs" – part-year and/or part-time – between career and retirement. It has been demonstrated in a series of studies that a large proportion (as many as two-thirds) of older men – especially those in lower-wage jobs – seek such bridge jobs before retirement. And in many cases these bridge jobs are not in the same industry or even occupation as the career job, leading one to suspect that in many cases there might be little transfer of skill or human capital. If this is the case, then the older workers would at least to some extent be in direct competition with younger workers for these jobs. Given difficulty in finding bridge jobs, a higher proportion of older workers might choose to enter retirement directly from career jobs, skipping the bridge jobs. A relative cohort size measure – the number of 25-34 year olds working part-year and/or part-time, relative to the number of older men, at the state level – has been shown here to be highly significant – both statistically and substantively – in explaining changes in older men's annual hours worked, labor force participation, and propensity to retire, and propensity to claim Social Security benefits. In general terms, relative cohort size can be said to have generated between 25-40% of the observed changes in these variables, with the strongest effects being on the propensity to claim Social Security benefits. Somewhat weaker effects were found for older women, in a companion to this study. |
| Keywords: | retirement, men's labor supply, labor force participation, relative cohort size, relative wage, part-time employment, bridge jobs, baby boom |
| JEL: | J14 J21 J22 J26 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4652&r=age |
| By: | Baker, Michael; Benjamin, Dwayne; Fan, Elliot |
| Abstract: | In this paper we document the economic outcomes of elderly immigrants to Canada. Our objective is to describe the extent to which elderly immigrants may have low income (are “in povertyâ€) and their interactions with the Canadian income transfer system. The study has two main parts. First, using a combination of administrative and survey data, we describe the age dimensions of immigration to Canada since 1980, and the evolution of policies directed towards older immigrants (i.e., immigration selection, and eligibility for age-related social security programs). Second, using the SCF and SLID surveys spanning 1981 through 2006, we document the composition and levels of income for immigrants to Canada. We estimate the degree to which older immigrants support themselves, either through working, or living with relatives, as well as the degree that they rely on various income transfer programs, especially OAS, GIS, and Social Assistance (SA). We also summarize their overall living standards, and the extent to which they live in poverty (have “low incomes.â€) Throughout the paper, we also explore the family dimensions to the outcomes of older immigrants: distinguishing between individual and family sources of income, as well as outlining differences in the living arrangements (family structure) of older immigrants, and the implications for measures of their well-being |
| Keywords: | Immigration; Retirement; Public Pensions; Living arrangements and family structure |
| JEL: | J61 J26 |
| Date: | 2009–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-69&r=age |
| By: | Raquel Fonseca; Pierre-Carl Michaud; Titus Galama; Arie Kapteyn |
| Abstract: | The authors use a calibrated stochastic life-cycle model of endogenous health spending, asset accumulation and retirement to investigate the causes behind the increase in health spending and life expectancy over the period 1965-2005. They estimate that technological change along with the increase in the generosity of health insurance may explain independently 53% of the rise in health spending (insurance 29% and technology 24%) while income less than 10%. By simultaneously occurring over this period, these changes may have lead to a "synergy" or interaction effect which helps explain an additional 37% increase in health spending. They estimate that technological change, taking the form of increased productivity at an annual rate of 1.8%, explains 59% of the rise in life expectancy at age 50 over this period while insurance and income explain less than 10%. |
| Keywords: | demand for health, health spending, insurance, technological change, longevity |
| JEL: | I10 I38 J26 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:722&r=age |
| By: | Sophie Thiébaut (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579, Unité 912 - INSERM : U912); Andrew Armstrong (NATSEM - National Centre for Social and Economic Modelling); Bruno Ventelou (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579, Epidémiologie et Sciences Sociales Appliquées à l'Innovation Médicale - INSERM : U379 - Université de la Méditerranée - Aix-Marseille II) |
| Abstract: | The Objective of this paper is to test the consequences of changes in health status of future cohorts of French elderly on healthcare expenditures. We value the precise effect of epidemiological and life expectancy changes on health expenditures for 2025 by using a markovian microsimulation model for a representative database of the contemporary cohorts in France. The originality of these simulations holds in the use of an aggregate indicator of morbidity-mortality, capturing a vital risk and making possible to adapt the quantification of the life expectancies by taking into account of a life without incapacity and/or of the presence of severe pathologies. We forecast a reliable range for future national health spending, under different epidemiological scenarios of morbidity: benchmark case (BM), healthy aging (HA), healthy aging and medical progress (AM). We obtain an evaluation of the annual growth rates in health expenditure accounted for solely by aging: +1.18%; +0.95%; +1.38% according to the scenarios BM; HA; AM. In short, the effective decreases in morbidity rates are not sufficient enough to compensate the massive arrival of baby-boomers at elderly age in France for the period 2010- 2025. |
| Keywords: | health ; health policy ; simulation method ; econometrics ; social security ; planning Models |
| Date: | 2009–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00443566_v1&r=age |
| By: | Alfonso R. Sánchez Martín; Virginia Sánchez Marcos |
| Abstract: | Recent pension reforms in Spain have been guided by two opposite goals, achieving financial stability and improving redistributive aspirations. In particular, reforms implemented in 1997/2002 entailed a mixture of both through (i) changes in the pension formula, (ii) the extension in the entitlement to early retirement to all cohorts, and, finally, (iii) increases in survival pensions. This paper builds an Applied General Equilibrium OLG model that captures the fundamental non-stationarity of the Spanish reality (ageing population, education transition and increasing female's attachment to the labour market) to assess the impact of those reforms. As a novel feature with respect to the literature, households in our model economy are made of two potential earners that make saving and labour supply decisions. Our main conclusions from the analysis are at three different levels. First, the Spanish pension system is clearly unsustainable, the pension expenditure will reach a figure of about 18% of the GDP in 2050, and the reforms have been clearly ineffective in improving the financial prospects of it. Second the reforms have had substantial redistributed effects, benefiting low educated groups against high educated and future cohorts against current cohorts. Finally we show that exploring the financial prospects with traditional single earner households models may result in underestimates of the future financial burden of the pension system. |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2009-40&r=age |
| By: | Brugiavini, Agar (University of Venice) |
| Abstract: | This paper looks at welfare reforms in Italy and their effects on labour supply. I focus on social security reforms, which have taken place in the 1990s and on labour market reforms. Old age social security expenditure in Italy is high (14% of GDP) and the system has been very generous on early retirement possibilities: the reforms have tried to tackle these issues with mixed results. The labour market reforms have addressed the rigidity of the labour market by making it easier for firms to hire on a short-term basis. However the UI system is limited to open-ended contracts and coverage is also restricted, so that young workers employed in short-term contracts have very little protection from the welfare state. |
| Keywords: | Social security system; unemployment insurance; labour supply |
| JEL: | H53 H55 I38 J08 J26 J65 |
| Date: | 2009–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2009_029&r=age |
| By: | Annette Baudisch (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | The evolution of different life history strategies and thus different ageing patterns essentially depends on the nature of the underlying trade-offs between survival and reproduction. To fully comprehend ageing, we need to understand these trade-offs. |
| Keywords: | ageing |
| JEL: | J1 Z0 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2009-043&r=age |
| By: | Forslund, Anders (IFAU - Institute for Labour Market Policy Evaluation) |
| Abstract: | Comparing Sweden to other EU countries, labour force participation rates of older individuals and females are high. These facts are consistent with the idea that institutional design matters: access to child care, paid parental leave, and a tax system with individual rather than household income taxation, probably explain a significant fraction of the high female participation rate; and the evidence suggests that the design of pension systems has an impact on the labour force participation of the elderly. Active labour market policies may contribute to high labour force participation, but cannot be relied on as a major means of raising employment and participation in the long run. |
| Keywords: | Labour supply; taxes; income support systems |
| JEL: | H55 J21 J26 |
| Date: | 2009–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2009_030&r=age |
| By: | Schirle, Tammy |
| Abstract: | The distribution of income among seniors in Canada has changed substantially over the past decade, reflecting an overall increase in income and an increase in income inequality. In this study I decompose the distribution of income among senior couples to determine the extent to which changes in the labour market activity and retirement experiences of women and men have contributed to this shift in the income distribution. I use data from the Canadian Survey of Labour and Income Dynamics, 1996 and 2006, and the methods of Firpo, Fortin and Lemieux (2007, 2009). Results suggest increases in women's access to pension income and employment have driven increases in income across the distribution with relatively small disequalizing effects. Increases in women's access to public pensions have had important equalizing effects, while most of the increase in senior income inequality can be attributed to increases in senior men's and women's education levels. |
| Keywords: | Income Distribution, Elderly, Seniors, Women's Labour Supply, Pensions |
| JEL: | J14 J26 J32 I32 |
| Date: | 2009–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-68&r=age |
| By: | Erhan Artuç (Koc University) |
| Abstract: | 2002 Pew Global Attitudes survey shows that workers’ support for free trade decreases with age. The relation between age and supporting free trade is a phenomenon previously unexplored by economists. We study distributional effects of trade liberalization, in particular age and gains from free trade, using a dynamic structural general equilibrium model. The method we use here is complimentary to Artuc, Chaudhuri and McLaren (forthcoming), and can handle a much richer treatment of ex-ante, endogenous and unobserved worker heterogeneity. This more efficient method allows us to calculate distributional effects of trade liberalization in detail but it requires a completely different estimation strategy, which comes at a cost of more computation time and stronger assumptions on workers’ expectations. After estimating the structural model with U.S. data sets NLSY and CPS, we simulate a hypothetical trade liberalization in metal manufacturing sector (which has been especially vulnerable to trade shocks in the past, the steel industry in particular). We show gradual adjustment of labor allocation, wages and prices in response to this trade shock. We find a “mirror effect”where very young workers in the metal sector are moderately worse off and older workers are extremely worse off, while young workers in manufacturing sector are moderately better off and older workers are extremely better off. |
| Keywords: | Trade Liberalization, Sectoral Mobility, Labor Market Equilibrium |
| JEL: | F1 D58 J2 J6 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:0913&r=age |
| By: | Martin Hering |
| Abstract: | This paper sheds light on the current state and the likely future development of Korea’s evolving pension system by analyzing it from a comparative perspective. It shows that, because of its many institutional layers, the Korean pension system could evolve into one of several different types of pension regimes: if the National Pension Scheme (NPS) were to continue to be dominant and occupational pensions continued to be marginal, a classic Bismarckian system would emerge; if the NPS were to be significantly reduced and occupational pensions were to be significantly expanded, a Bismarckian-light system would be the outcome; if other changes were to occur—such as the conversion of the basic pension into a universal, poverty-preventing pension and the partial replacement of the NPS by a mandatory personal or occupational-pension scheme—a mixed regime would emerge. The paper argues that the emergence and consolidation of a Bismarckian-style, single-pillar system is more likely than the shift to one of the variants of the multi-pillar system, such as the Bismarckian-light and the mixed regime type. Since there are many sources of path dependence that reinforce the Bismarckian path of development, a shift to a different pension regime is very difficult. For example, large accumulated entitlements and the strong redistributive role of the NPS make it difficult to reduce the public, earnings-related pension program, and significant accumulated entitlements and the important role of the severance pay scheme in company financing also make it difficult to expand occupational pensions. |
| Keywords: | welfare state, pension systems, path dependence, institutional change, Korea |
| JEL: | D02 H53 H55 J32 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:262&r=age |
| By: | Heng, Stefab |
| Abstract: | Ageing society opens up enormous economic potential. Whereas for a long time social interpretation homed in on the doomsday scenarios of demographic change, it is the economic potential that is now emerging with increasing clarity. Information and communication technologies stand a good chance of benefiting from this trend. Older people are not intrinsically technology refuseniks, as evidenced by the growing number of silver agers using the internet. Successful products will be far removed from disenfranchisement and stigmatisation. The challenge to product developers and marketing strategists is to create age-appropriate offers that older people do not perceive as encroaching on their autonomy or pointing up their physical infirmities. Particularly promising are offers enabling barrier-free use without seeming like segregational solutions for specific age groups. User friendliness, value systems and the legal framework are currently stymieing yet wider success. Technical fascination aside, the business potential hinges directly on regulations concerning data protection, teletreatment and cost reimbursement, on user friendliness and society’s attitude towards the application of robotics in medicine and healthcare. The tasks involved are enormous. Product developers, marketing strategists, physicians, nurses and carers, politicians and older people in need of help themselves must be prepared to take the new routes. Assistance systems, e-Health and health games benefit from demographic change. The range of offers is highly diversified. They extend from ‘intelligent’ tablet dispensers, emergency bio sensor technology in motor vehicles and motion sensor technology through tele-monitoring and online consultations to brain jogging and exercise games. |
| Keywords: | demographics; technology;ICT; e-Health; games; AAL; assistance systems |
| JEL: | L96 J14 D12 L86 J26 J11 |
| Date: | 2009–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19650&r=age |
| By: | @Charles Yuji Horioka; |
| Abstract: | In this paper, I survey the previous literature on the saving behavior of the aged in Japan and then present some survey data on the saving behavior of the aged in Japan that became available recently. To summarize the main findings of this paper, virtually all previous studies as well as the newly available data I analyze find that the retired aged dissave and that even the working aged dissave, at least at advanced ages. Moreover, there has been a sharp increase in the dissaving of the retired aged since 2000, with the increase being due primarily to reductions in social security benefits, increases in consumption expenditures, and increases in taxes and social insurance premiums. These findings are consistent with the life-cycle model and suggest that this model is highly applicable (and becoming increasingly applicable over time) in the case of Japan. |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0763&r=age |
| By: | Layte, Richard |
| Keywords: | Ireland/qec |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb2009/4/3&r=age |