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on Economics of Ageing |
| By: | Edwin van Gameren (El Colegio de México) |
| Abstract: | A brief review of the aging of the Mexican population, the high labor force participation of elderly, and the lack of retirement pensions, is followed by a causal empirical analysis using a panel data set (Mexican Health and Aging Study, MHAS) of Mexicans aged 50 and more. We find that the labor force participation of elderly men is affected by their economic situation; in particular the availability of a retirement pension (after contributions to a pension plan earlier in their life) reduces participation. A better health raises male participation rates, while the health effect is absent for women. The opposite effect, from labor force participation on health status, is negligible for both genders. Access to health services, which is obtained if the partner or a child is working, reduces participation rates. Additional analysis indicates that the same variables influence the choice for a job in the formal or the informal sector, and whether a job is held in addition to a pension. The results suggest that a redesign of the social security including retirement pensions and health care services has implications for the individuals’ participation decisions, and therefore for future contributions to the insurance and pension plans. |
| Keywords: | labor force participation, pension, health, insurance |
| JEL: | J14 J22 C35 D13 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:emx:ceedoc:2010-06&r=age |
| By: | Jorgensen, Ole Hagen |
| Abstract: | This paper analyzes the macroeconomic implications of population aging in Brazil. Three alternative yet complementary methodologies are adopted, and depending on policy responses to the fiscal implications of aging, there are two main findings: First, saving rates could increase and not necessarily fall as a consequence of aging in Brazil -- thus contradicting conventional views. Second, lifetime wealth across generations could increase -- as capital deepening generates a second demographic dividend. Two policy responses to aging are emphasized: First, a structural policy response of linking mandatory retirement (or entitlement) ages to increasing life expectancy would boost labor supply and reduce the fiscal costs of aging. Second, in terms of preferable parametric policy responses, the second demographic dividend will be promoted to the highest extent by keeping taxes and debt unchanged while allowing public pensions to adjust downward. Such a policy response would keep pensions from further crowding out private saving -- thus balancing capital accumulation with intergenerational income distribution. In conclusion, Brazil will not necessarily experience a fall in saving and growth, but if government policies are appropriately, adequately, and timely formulated, population aging is likely to lead to substantial capital deepening and increases in lifetime income, wealth, and welfare. |
| Keywords: | Emerging Markets,Access to Finance,Population Policies,Economic Theory&Research,Debt Markets |
| Date: | 2011–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5519&r=age |
| By: | Sarah Smith |
| Abstract: | It has been suggested that social connectedness is potentially important for a healthy and happy retirement. This paper presents evidence that levels of social connectedness (defined as being active in social organisations) increase at retirement, by 25 per cent compared to pre-retirement levels. However, there is not a consistently strong and positive association between social connectedness and health and well-being in retirement for everyone. Rather, the evidence suggests that social connectedness may matter most in bad times. |
| Keywords: | Social capital, retirement, health and well-being |
| JEL: | I12 J14 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:10/255&r=age |
| By: | James M. Poterba; Steven F. Venti; David A. Wise |
| Abstract: | How households draw down the balances that they accumulate in retirement saving accounts such as 401(k) plans and Individual Retirement Accounts can have an important effect on the contribution of these accounts to retirement income security. This paper presents evidence on the pattern of withdrawals at different ages. We find a relatively modest rate of withdrawals prior to the age at which households are required to take minimum required distributions. Only seven percent of PRA-owning households between the ages of 60 and 69 take annual distributions of more than ten percent of their PRA balance, and only 18 percent of PRA households in this age group make any withdrawals in a typical year. The rate of distributions rises sharply after age 70 ½, when minimum distributions are required. The proportion of PRA-owning households making a withdrawal jumps to over 60 percent by age 71, and crosses 70 percent a few years later. On average, households age 60 to 69 with PRA accounts withdraw only about two percent of their account balances each year, considerably less than the rate of return on account balances during our sample period. Even at older ages—after the required minimum distribution age--the percentage of balances withdrawn remains at about five percent. |
| JEL: | D14 E21 H30 J14 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16675&r=age |
| By: | Rudolph, Heinz P.; Holtzer, Peter |
| Abstract: | The overwhelming number of contributors that have been allocated into the default option is one of the main characteristics of the Russian second pillar. This finding confirms that the level of financial literacy for most of the participants is not sufficient to make informed portfolio selections. The authors argue that the current system is perfectly consistent with a solid second pillar, but the authorities should focus their attention in the strategic asset allocation of pension funds. Since in the short and medium term it is unlikely to see improvements in financial literacy of individuals that may overcome the complexity of these decisions, the authorities can play an important role in designing default investment portfolios that can be aligned with expected replacement rates for the contributors. The current investment regulation of the default option induces investment in inefficient portfolios that are unlikely to bring returns above inflation, and probably will result in very low replacement rates for contributors. Further liberalization of the investments of the pension portfolio; improvements in the governance and supervision of the pension system; and greater certainty about the ownership of the funds are necessary steps to complete the pension reform launched in 2002. |
| Keywords: | Debt Markets,Financial Literacy,Emerging Markets,Pensions&Retirement Systems,Access to Finance |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5514&r=age |
| By: | Karen A. Kopecky; Tatyana Koreshkova |
| Abstract: | We consider a life-cycle model with idiosyncratic risk in labor earnings, out-of-pocket medical and nursing home expenses, and survival. Partial insurance is available through welfare, Medicaid, and social security. Calibrating the model to the United States, we find that 12 percent of aggregate savings is accumulated to finance and self-insure against old-age health expenses given the absence of complete public health care for the elderly and that nursing home expenses play an important role in the savings of the wealthy and on aggregate. Moreover, we find that the aggregate and distributional effects of public health care provision are highly dependent on the availability of other programs making up the social insurance system. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2010-19&r=age |
| By: | Michael Bliss |
| Keywords: | Canada, public healthcare, universality, financial need, Canada's healthcare system |
| JEL: | H51 I11 I18 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cdh:benlec:2010&r=age |
| By: | Giles, John; Wang, Dewen; Zhao, Changbao |
| Abstract: | This paper shows that support from the family continues to be an important source of support for the rural elderly, particularly the rural elderly over 70 years of age. Decline in likelihood of co-residence with, or in close proximity to, adult children raises the possibility that China's rural elderly will receive less support in the forms of both income and in-kind instrumental care. Although descriptive evidence on net financial transfers suggests that the elderly with migrant children will receive similar levels of financial transfers as those without migrant children, the predicted variance associated with these transfers implies a higher risk that elderly with migrant children may fall into poverty. Reducing the risk of low incomes among the elderly is one important motive for new rural pension initiatives supported by China's government, which are scheduled to be expanded to cover all rural counties by the end of the 12th Five Year Plan in 2016. |
| Keywords: | Rural Poverty Reduction,Population Policies,Services&Transfers to Poor,Regional Economic Development,Labor Policies |
| Date: | 2010–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5510&r=age |