nep-age New Economics Papers
on Economics of Ageing
Issue of 2011‒04‒02
nine papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Time is money: Could deferred graduate retirement finance higher education? By Bilal Barakat
  2. Population Aging and Individual Attitudes toward Immigration: Disentangling Age, Cohort and Time Effects By Lena Calahorrano
  3. Is Early Retirement Encouraged by the Employer? Labor-Demand Effects of Age-Related Collective Fees By Hallberg, Daniel
  4. Simulations of long-term returns and replacement rates in the Colombian pension system By Javier Alonso; Carlos Herrera; Claudia Llanes; David Tuesta
  5. Civil Service and Military Pension Reforms in Indonesia, Malaysia and Singapore By Asher, Mukul G
  6. Retaining through Training: Even for Older Workers By Picchio, Matteo; van Ours, Jan C.
  7. The Demographic Dividend: Evidence from the Indian States By Ashoka Mody; Shekhar Aiyar
  8. Demographic Changes and Challenges in Europe By Demeny, Paul
  9. Population Policy and the Demographic Transition: Performance, Prospects, and Options By Demeny, Paul

  1. By: Bilal Barakat
    Abstract: Higher education is never free — the question is: who should pay for it? Current policy debates in Europe are increasingly focusing on raising the share of private funding. To date, policy discussions have centred on a relatively small number of alternatives, namely full public funding, tuition fees, either up-front or delayed and income-contingent, or a surtax on graduate incomes. Here, I present an alternative that, to my knowledge, has not been suggested previously, but sidesteps some important objections against other forms of private contributions. The basic idea explored here is to increase the statutory retirement age for higher education graduates relative to non-graduates. In principle, the resulting decrease in future public pension liabilities can be converted into increased funds for present spending on higher education. In this first discussion of the above proposal I consider important caveats, perform an order-of-magnitude estimate of financial feasibility, i.e. whether deferred graduate retirement (DGR) could potentially raise sufficient funds to replace tuition fees, and discuss advantages and disadvantages compared to more established policy options. I conclude that, at least in the European context, DGR is potentially feasible both financially and politically, has a number of desirable properties compared to the alternatives, and deserves more serious investigation.
    Keywords: Higher education, cost-sharing, retirement age.
    Date: 2011–03
  2. By: Lena Calahorrano (RWTH AAchen University)
    Abstract: 49 pages
    Keywords: Immigration, Demographic Change, Political Economy
    JEL: D78 F22 J10
    Date: 2011
  3. By: Hallberg, Daniel (Uppsala Center for Labor Studies)
    Abstract: In Sweden, employers pay non-wage costs for their workforce in the form of legislated employment tax and collective fees. For parts of the workforce, the collective fees are progressive with respect to the employee’s age and wage. The objective of this paper is to examine how non-wage costs affect voluntary early retirement. To this end we use a large longitudinal employer–employee matched data set with administrative records of the private sector in Sweden. We exploit the variation in collective fee costs across companies to identify employer incentives to encourage early retirement. The results from the instrumental variable estimator suggest that a 1 percentage point increase in non-wage costs in relation to wage costs increases retirement by 6 percent. Further, given the wage sum and workforce structure, large firms spend more on non-wage compensation than small firms. The share of non-wage costs in relation to the wage sum is also positively linked to net employment growth.
    Keywords: Early retirement; non-wage labor costs; pensions; labor demand; collective fees
    JEL: J21 J23 J26 J32
    Date: 2011–03–18
  4. By: Javier Alonso; Carlos Herrera; Claudia Llanes; David Tuesta
    Abstract: This study is a theoretical exercise for Colombia that aims to simulate a variety of scenarios under a hypothetical scheme similar to the multi-funds currently in operation in Chile, Mexico and Peru. This has been done by modeling the future movement of asset prices that are considered to be representative of equity and fixed-income using the Monte Carlo method. After making the simulations we have constructed alternative investment portfolios according to the chosen combination of equity and fixed-income, and compared and assessed them in terms of their risk-return ratio. The study emphasizes the fundamental importance of adequate contribution densities for obtaining sufficient income for old age, and the relevance of high returns, with adequate risk limitation. Another of the study’s aims is to use the new multi-fund scheme defined for Colombia as a basis for the hypotheses of different scenarios projected to 2050. These will include the composition of members’ pension fund portfolios and changes in the scheme over time, taking as a reference the life-cycle scheme operated in Mexico, as well as other compositions and profiles that participants may decide to enter into in accordance with their choice and the limits set by regulations. The results of the work confirm what has been found in other studies on the subject for the Colombian economy: that the implementation of a multi-fund system will provide pension-fund members with efficient returns in the long term, with limited volatility over time.
    Date: 2010–12
  5. By: Asher, Mukul G
    Date: 2011–02
  6. By: Picchio, Matteo (Tilburg University); van Ours, Jan C. (Tilburg University)
    Abstract: This paper investigates whether on-the-job training has an effect on the employability of workers. Using data from the Netherlands we disentangle the true effect of training incidence from the spurious one determined by unobserved individual heterogeneity. We also take into account that there might be feedback from shocks in the employment status to future propensity of receiving firm-provided training. We find that firm-provided training significantly increases future employment prospects. This finding is robust to a number of robustness checks. It also holds for older workers, suggesting that firm-provided training may be an important instrument to retain older workers at work.
    Keywords: training, employment, human capital, older workers
    JEL: C33 C35 J21 J24 M53
    Date: 2011–03
  7. By: Ashoka Mody; Shekhar Aiyar
    Abstract: Large cohorts of young adults are poised to add to the working-age population of developing economies. Despite much interest in the consequent growth dividend, the size and circumstances of the potential gains remain under-explored. This study makes progress by focusing on India, which will be the largest individual contributor to the global demographic transition ahead. It exploits the variation in the age structure of the population across Indian states to identify the demographic dividend. The main finding is that there is a large and significant growth impact of both the level and growth rate of the working age ratio. This result is robust to a variety of empirical strategies, including a correction for inter-state migration. The results imply that a substantial fraction of the growth acceleration that India has experienced since the 1980s - sometimes ascribed exclusively to economic reforms - is attributable to changes in the country’s age structure. Moreover, the demographic dividend could add about 2 percentage points per annum to India’s per capita GDP growth over the next two decades. With the future expansion of the working age ratio concentrated in some of India’s poorest states, income convergence may well speed up, a theme likely to recur on the global stage.
    Keywords: Aging , Cross country analysis , Economic growth , India , Labor productivity , Labor supply , Migration , Population ,
    Date: 2011–02–22
  8. By: Demeny, Paul
    Date: 2011–02
  9. By: Demeny, Paul
    Date: 2011–02

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