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on Economics of Ageing |
| By: | Luc Behaghel; David M. Blau |
| Abstract: | We use a US Social Security reform as a quasi-experiment to provide evidence on framing effects in retirement behavior. The reform increased the full retirement age (FRA) from 65 to 66 in two month increments per year of birth for cohorts born from 1938 to 1943. We find strong evidence that the spike in the benefit claiming hazard at 65 moved in lockstep along with the FRA. Results on self-reported retirement and exit from employment are less clear-cut, but go in the same direction. The responsiveness to the new FRA is stronger for people with higher cognitive skills. We interpret the findings as evidence of reference dependence with loss aversion. We develop a simple labor supply model with reference dependence that can explain the results. The model has potentially important implications for framing of future Social Security reforms. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2010-37&r=age |
| By: | Dean Baker |
| Abstract: | There is enormous public confusion (much of it deliberately cultivated) about the extent of Social Security’s projected shortfall. Many policymakers and analysts point out that projections from the Congressional Budget Office and the Social Security Trustees show the program to be out of balance in the long-term, therefore we would be best advised to make changes as soon as possible. This paper argues that supporters of the existing Social Security system should try to ensure that no major changes to the core program are implemented in the immediate future. It points out that: 1. There is good reason for believing that the public will be better informed about the financial state of Social Security in the future, in part because of the weakening of some of the main sources of misinformation; 2. Many more people will be directly dependent on Social Security in the near future. These people and their families will likely be strong defenders of the program; 3. The group of near-retirees, who may be the victims of early action, will desperately need their Social Security since they have seen much of their wealth eliminated with the collapse of the housing bubble; and 4. The concern over “maintaining the confidence of financial markets” is an empty claim that can be used to justify almost any policy. |
| Keywords: | social security, retirement, retirement age, |
| JEL: | H H6 H62 H63 H68 J J1 J14 J18 J3 J32 J38 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2010-26&r=age |
| By: | Kathi Wilson; Mark W. Rosenberg; Sylvia Abonyi; Robert Lovelace |
| Abstract: | The Aboriginal population in Canada, much younger than the general population, has experienced a trend towards aging over the past decade. Using data from the 2001 Aboriginal Peoples Survey (APS) and the 2000/2001 Canadian Community Health Survey (CCHS), this article examines differences in health status and the determinants of health and health care use between the 55-and-older Aboriginal population and non-Aboriginal population. The results show that the older Aboriginal population is unhealthier than the non-Aboriginal population across all age groups; differences in health status, however, appear to converge as age increases. Among those aged 55 to 64, 7 per cent of the Aboriginal population report three or more chronic conditions compared with 2 per cent of the non-Aboriginal population. Yet, among those aged 75 and older, 51 per cent of the Aboriginal population report three or more chronic conditions in comparison with 23 per cent of the non-Aboriginal population. |
| Keywords: | Aboriginal people, health status, health care use |
| JEL: | I10 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:279&r=age |
| By: | de la Croix, David (Université catholique de Louvain); Pierrard, Olivier (Université catholique de Louvain); Sneessens, Henri R. (University of Luxembourg) |
| Abstract: | This paper re-examines the effects of population aging and pension reforms in an OLG model with labor market frictions. The most important feature brought about by labor market frictions is the connection between the interest rate and the unemployment rate. Exogenous shocks (such as aging) leading to lower interest rates also imply lower equilibrium unemployment rates, because lower capital costs stimulate labor demand and induce firms to advertize more vacancies. These effects may be reinforced by increases in the participation rate of older workers, induced by the higher wage rates and the larger probability of finding a job. These results imply that neglecting labor market frictions and employment rate changes may seriously bias the evaluation of pension reforms when they have an impact on the equilibrium interest rate. |
| Keywords: | overlapping generations, search unemployment, labor force participation, aging, pensions, labor market |
| JEL: | E24 H55 J26 J64 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5276&r=age |
| By: | Göbel, Christian; Zwick, Thomas |
| Abstract: | In this study, we investigate the effect of five specific human resource measures for old employees (SMOE) on their relative productivity. Despite the fact that SMOE are applied in the majority of establishments, this is the first representative study on the effectiveness of these measures. We find that the relative productivity contributions of old workers are significantly higher in establishments that provide either specific equipment of work places or age-specific jobs for old workers. In establishments that apply mixed-age working teams the productivity contributions of old and of young employees are significantly higher than in establishments without this measure. Working time reductions and specific training for old employees are not associated with higher relative productivity of these employees. Our paper provides a joint explanation for two recent findings, the only modest decline of the productivity contributions of old workers and the high variance for estimates of age-productivity profiles. -- |
| Keywords: | ageing workforce,age-productivity-profile,personnel management,HRM |
| JEL: | J11 J14 J21 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10069&r=age |
| By: | Michel Grignon; Byron G. Spencer; Li Wang |
| Abstract: | In this article we analyse the rates at which those admitted to hospital with acute myocardial infarction (AMI) receive aggressive treatment, assess how those rates have changed over time, and ask whether there is evidence of age discrepancies. Estimates made on the basis of data from an administrative database that includes discharges from all acute care hospitals in Ontario for selected years, from 1995 to 2005, indicate that there are strong and persistent age patterns in the application of medical technology. Results showed that to be true even after controlling for the higher rates of co-morbidities among older patients and variations across hospitals in practice patterns. |
| Keywords: | treatment of AMI, age pattern |
| JEL: | I11 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:278&r=age |
| By: | K. Navaneetham |
| Abstract: | Age structural transition is a process and a consequence of shifting age structure from a young aged population to old aged population. It is well known that economic growth in the East Asian countries was significantly contributed by demographic gift, that is decline in young aged population and increase in working aged population. However, little is known about the role of age structure changes on economic growth in the context of South and Southeast Asia. In this paper an attempt has been made to study the nature and process of age structural transition in the countries of South (Bangladesh, India and Sri Lanka) and Southeast Asia (Indonesia, Malaysia, Philippines, Singapore and Thailand). Further, this paper also attempts to study the influence of age structure changes on the economic growth in these countries. [Working Paper No. 337] |
| Keywords: | Age structure, window of opportunity, economic growth, open economy, South Asia, Southeast Asia |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3133&r=age |
| By: | Miriam Beblow (Berlin School of Economics and Law (HWR)); Sven Schreiber (Macroeconomic Policy Institute (IMK) in the Hans Boeckler Foundation) |
| Abstract: | According to the life-cycle theory of consumption and saving, foreseeable retirement events should not reduce consumption. Whereas some consumption expenditures may fall when they are self-produced (given higher leisure after retirement), this argument applies especially to housing consumption which can hardly be substituted by home production. We test this hypothesis using micro data for Germany (GSOEP) and find that income reductions when entering retirement have a negative effect on housing expenditures for tenants. For some econometric specifications, this effect is significantly stronger than the one of income changes at other times. While this result suggests that the strict consumption-smoothing hypothesis is violated for the subgroup of nonhome owners, the effect is quantitatively small, which explains the ambiguity of previous findings. |
| Keywords: | consumption smoothing, retirement-consumption puzzle, GSOEP |
| JEL: | C33 D91 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:14-2010&r=age |
| By: | Bohl, Martin; Lischewski, Judith; Voronkova, Svitlana |
| Abstract: | This paper presents an analysis of pension funds' performance in Poland and Hungary, two Central European countries characterized by strong regulation of their private pension fund industries. Thus, the paper extends the literature which has so far mostly focused on performance of pension fund industries facing no or limited regulation. We find that the performance of pension funds in the two studied countries differs. While we do not find convincing evidence of outperformance by Polish pension funds, we find strong evidence of underperformance by Hungarian pension funds. The results are robust to time-variation. The paper considers possible explanations behind these findings. The results of the paper should be of interest for policy-makers seeking to achieve optimal performance of the pension systems and academics in the research area of pension funds. -- |
| Keywords: | pension fund management,investment and performance regulation,performance measurement,Central European stock markets,Emerging Markets |
| JEL: | G23 G28 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10076&r=age |