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on Economics of Ageing |
| By: | Cory Koedel (Department of Economics, University of Missouri-Columbia); Shawn Ni (Department of Economics, University of Missouri-Columbia); Michael Podgursky (Department of Economics, University of Missouri-Columbia) |
| Abstract: | During the late 1990s public pension funds across the United States accrued large actuarial surpluses. The seemingly flush conditions of the pension funds led legislators in most states to substantially improve retirement benefits for public workers, including teachers. In this study we examine the benefit enhancements to the teacher pension system in Missouri. These enhancements resulted in large windfall gains for teachers who were close to retirement when the legislation was enacted. By contrast, novice teachers, and teachers who had not yet entered the labor force, were made worse off. The reason is that front-end contribution rates have been raised for current teachers to offset past liabilities accrued from the enhancements. Other things equal, the teaching profession in Missouri is now less appealing for young teachers as a result of the pension enhancements. |
| Keywords: | pension, pension risk, defined-contribution pension, teacher pension, teacher pension risk |
| JEL: | I20 J33 J38 |
| Date: | 2012–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1207&r=age |
| By: | Philip Ulrich Sauré; Hosny Zoabi |
| Abstract: | Cross-country variation in average retirement age is usually attributed to institutional differences that affect individuals' incentives to retire. We suggest a different approach. Since workers in different occupations naturally retire at different ages, the composition of occupations within an economy matters for its average retirement age. Using U.S. data we infer the average retirement age by occupation, which we then use to predict the retirement age of 38 countries according to the occupational composition of these countries. Our findings suggest that the differences in occupational composition explain up to 39.2% of the observed cross-country variation in retirement age. |
| Keywords: | Retirement Age, Occupational Distribution, Cross-Country Analysis |
| JEL: | J14 J24 J26 J82 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:snb:snbwpa:2012-06&r=age |
| By: | Cagri Seda Kumru; John Piggott |
| Abstract: | This paper studies the interaction between capital income taxation and a means tested age pension in the context of an overlapping generations model, calibrated to the UK economy. Recent literature has suggested a rehabilitation of capital income taxation (Conesa et al. (2009)), predicated on the idea that capital is a complement with retirement leisure. This leads naturally to the conjecture that a publicly funded age pension contingent upon holdings of capital or capital income may have a similar effect. We formalize this using a stochastic OLG model with multiple individuals differentiated by labour productivity and pension entitlement. Our preliminary findings suggest that a means tested pension has effects similar to capital income taxation in a life-cycle context. |
| JEL: | E21 E62 H55 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:acb:camaaa:2012-21&r=age |
| By: | James Marton (Georgia State University); Stephen A. Woodbury (Michigan State University and W.E. Upjohn Institute) |
| Abstract: | Are early retiree health benefits (RHBs) a form of deferred compensation that binds workers to an employer? Most employers who offer RHBs offer them only to workers who have 10 or more years of tenure with the firm and have reached age 55. Accordingly, workers in firms offering RHBs have an incentive to stay with a firm in the years before they attain eligibility for RHBs, and a greater incentive than otherwise to retire thereafter. We test for the existence of such a pattern of incentives by examining the age-specific relationship between workers’ eligibility for RHBs and retirement. The findings suggest that workers in RHB-offering firms are less likely to retire at ages 50 and 51 than similar workers in firms that do not offer RHBs. Also, RHB-eligible workers aged 60 and 61 are more likely to retire than similar RHB-ineligible workers. Such a pattern is consistent with RHBs acting as part of a delayed-payment contract of the kind described by Lazear (1979, 1981). |
| Keywords: | Tax Subsidies, Health Insurance, Retirement, Employee Benefits, Deferred Compensation, Compensation Methods |
| JEL: | H25 I18 J26 J32 M52 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:12-182&r=age |
| By: | Silvana Stahl (University of Rostock); Stefan Stahl (University of Rostock); Philipp Kasch (University of Rostock) |
| Abstract: | Riester products recently celebrated their 10th anniversary. Previous studies of their advantages analyzed only partial aspects, focusing either on cost or tax impacts. They yield inconsistent recommendations. The present paper tries to make recommendations based on an equal analysis of cost and tax effects. Our analysis focuses on a decision maker who wants to know if a specific private pension insurance should be bought with or without a Riester subsidy. After a theoretical analysis we carry out a simulation for three types of income. Subsidized Riester contracts seem to be the preferred choice for low income savers or, provided that children are taken into account, for middle income savers. A saver earning a high income is recommended to conclude a non-subsidized retirement contract if he or she has less than three children. The recommendations may be reversed if cost differences between the compared contracts reach a critical level. |
| Keywords: | Retirement Provisions, Private Pension Insurance, Riester, Taxation, Costs |
| JEL: | E62 K39 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:125&r=age |
| By: | DE KONING, Kees |
| Abstract: | Savers, including pension savers, convert savings into assets: homes,government bonds and shares.The conversion of savings is for the very long term. Once monies are turned into assets, the reverse process of turning assets into cash cannot be achieved by all savers together. Unavoidably some must stay with the cash flow and value risks of these assets. Savers can swap with other savers, but collectively cannot get out of the risks.The short term attempts to do so lead to financial,economic and fiscal crises. Governments need to take measures to mitigate these risks. The pricing of risks is based on cash flows and future values. The latter is based on "perceived risks". It is always imprecise as it cannot predict what will happen, but it is based on what might happen. This leads to problems trying to asses the values of pension funds in meeting future commitments. To bridge the gap between short term savers preferences for cash and long term commitments to asset classes a number of possible solutions are provided, like pension dividend, economic easing,foreign home buying scheme, and Eurozone government bond yield management scheme. |
| Keywords: | pension fund; savings; economic growth; cash to asset conversion process; savers preferences; financial crisis; economic crisis; fiscal crisis; economic easing; Eurozone government bond yield management scheme; pension dividend |
| JEL: | E32 D70 E58 E44 E21 |
| Date: | 2012–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39672&r=age |
| By: | Yunus Aksoy (Department of Economics, Mathematics & Statistics, Birkbeck); Tobias Grasl (Department of Economics, Mathematics & Statistics, Birkbeck); Ron P Smith (Department of Economics, Mathematics & Statistics, Birkbeck) |
| Abstract: | We examine the impact of demographic structure, the proportion of the population in each age group, on growth, savings, investment, hours, interest rates and inflation using a panel VAR estimated from data for 20 OECD economies, mainly for the period 1970-2007. This flexible dynamic structure with interactions among the main macroeconomic variables allows us to estimate long-run effects of demographic structure on the individual countries. Our estimates confirm the importance of these effects. |
| Keywords: | demographic changes, macroeconomic variables, business cycle |
| JEL: | E32 J11 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:1212&r=age |
| By: | Peeters, Marga |
| Abstract: | According to the life-cycle theory, countries with high and rising youth ratios or high and rising old-age ratios tend to have low savings relative to investment, which depresses their capital outflows. This paper puts life-cycle theory to the test and studies the impact of demographic change on international capital flows in the Middle East and North Africa (MENA) and the Southern European countries Greece, Italy, Spain and Portugal (GISP). These two regions are asymmetric in that MENA has a young population whereas the population of GISP has been ageing rapidly. Moreover, MENA has a lower standard of living an is a much more closed economy, which may effect the ability to save and its impact on cross-border capital flows. The empirical analyses in this paper cover the period 1980-2011 and partly support the life-cycle theory for these two regions. Youth rates depressed domestic savings significantly in both the MENA and GISP regions, while ageing as well as population growth had a positive impact in the GISP region. Also, domestic savings significantly caused international capital flows. |
| Keywords: | Demography; international capital flows; savings; ageing; |
| JEL: | F4 F2 F3 D91 C31 E21 J11 |
| Date: | 2012–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39635&r=age |
| By: | Randall S. Jones; Satoshi Urasawa |
| Abstract: | While Korea remains one of the fastest-growing OECD economies, its potential growth rate per capita is projected to decelerate from around 4% during the current decade to around 2¼ per cent during the 2030s. Sustaining growth requires policies to mitigate the impact of rapid population ageing by increasing labour inputs from under-utilised segments of the population. In particular, female labour participation should be encouraged by better work-life balance and increasing the availability of high-quality, affordable childcare, in part by raising tuition fee subsidies and improving the quality of private childcare centres. More flexible employment and wage systems would increase the age at which older workers leave firms. For young people, improved vocational education at the secondary and tertiary levels would help overcome the labour mismatch problem and the overemphasis on tertiary education. Enhancing educational quality at all levels would promote productivity gains, including in services. Strengthened competition is also a key to narrow the large productivity gap between services and manufacturing.<P>Poursuivre la convergence en Corée vers les pays les plus riches<BR>Si la Corée connaît toujours l’une des croissances les plus dynamiques de la zone OCDE, son taux de croissance potentiel par habitant devrait ralentir pour passer de 4 % environ d’ici à 2020 à 2¼ pour cent entre 2030 et 2040. Pour soutenir la croissance, les autorités coréennes doivent prendre des mesures pour compenser les effets du vieillissement rapide de la population, en renforçant l’apport de travail des catégories de population sous-utilisées. Il convient notamment de renforcer le taux d’activité des femmes, en leur assurant des conditions d’emploi permettant de mieux concilier vie professionnelle et vie privée et en améliorant l’offre de services de garde de qualité et à moindre coût. Pour ce faire, les autorités devraient plus particulièrement relever les subventions destinées à couvrir les frais d’inscription de garde et améliorer la qualité des centres de garde privés. Une plus grande flexibilité des systèmes d’emploi et de rémunération permettrait aux travailleurs âgés de poursuivre leur activité professionnelle. Quant aux jeunes, l’amélioration de la formation professionnelle dans le secondaire et le supérieur contribuerait à résoudre les problèmes d’adéquation entre l’offre et la demande de compétences et de surqualification dans l’enseignement supérieur. Un enseignement de meilleure qualité à tous les niveaux augmenterait les gains de productivité, y compris dans le secteur tertiaire. Le renforcement de la concurrence offre également une piste pour combler l’écart de productivité important entre le secteur des services et le secteur manufacturier. |
| Keywords: | tax reform, education, Korea, innovation, potential growth, tertiary education, non-regular workers, labour force participation rates, female employment, R&D, labour market dualism, vocational education, VAT, older workers, SMEs, Korean economy, childcare, services sector, ECEC, réforme fiscale, Corée, innovation, travailleurs âgés, travailleurs non réguliers, taux d'activité, emploi des femmes, enseignement supérieur, système éducatif, dualisme du marché du travail, secteur des services, TVA, PME, économie coréenne, R-D, EAJE, potentiel de croissance, enseignement professionnel |
| JEL: | H2 I2 J2 O4 O53 |
| Date: | 2012–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:965-en&r=age |
| By: | Ovrum, Arnstein; Gustavsen, Geir Waehler; Rickertsen, Kyrre |
| Abstract: | The relationship between socioeconomic status and health is dynamic and evolves throughout the adult life course. However, relatively little empirical attention has been directed to the role of health affecting lifestyle choices in explaining these dynamics. Using Norwegian repeated cross-section data from the period 1997–2009, this study explores how the income and education gradients in physical activity, the consumption of fruits and vegetables, cigarette smoking and self-assessed health evolve over the age range 25–79 years. The findings indicate that while the education gradients in physical activity and the consumption of fruits and vegetables remain relatively stable throughout the adult life course, the education gradient in smoking is clearly decreasing in age. Further, with the exception of the income gradient in physical activity among females, the income gradients in lifestyles are generally concave in age and slightly decreasing in older age. However, the role of lifestyles in moderating the relationship between income and self-assessed health appears modest. This result partly reflects that while the income gradients in lifestyles decrease substantially once we control for education, the reverse is not true. Overall, while income and education differences in lifestyles should generally contribute to cumulative advantage effects in health by socioeconomic status over the adult life course, our results provide some evidence of increased health consciousness and associated lifestyle improvements in age among lower socioeconomic status groups. This could potentially contribute to reducing cumulative advantage effects in health by socioeconomic status at older ages. |
| Keywords: | age, inequality, life course, lifestyles, self-assessed health, socioeconomic status, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, D12, D91, I12, I14, I18, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:125862&r=age |
| By: | Chen, Yu (University of Glasgow); Gibb, Kenneth D. (University of Glasgow); Leishman, Chris (Heriot-Watt University, Edinburgh); Wright, Robert E. (University of Strathclyde) |
| Abstract: | This paper attempts to estimate the impact of population ageing on house prices. There is considerable debate about whether population ageing puts downwards or upwards pressure on house prices. The empirical approach differs from earlier studies of this relationship, which are mainly regression analyses of macro time-series data. A micro-simulation methodology is adopted that combines a macro-level house price model with a micro-level household formation model. The case study is Scotland, a country that is expected to age rapidly in the future. The parameters of the household formation model are estimated with panel data from the British Household Panel Survey covering the period 1999-2008. The estimates are then used to carry out a set of simulations. The simulations are based on a set of population projections that represent a considerable range in the rate of population ageing. The main finding from the simulations is that population ageing – or more generally changes in age structure – is not likely a main determinant of house prices, at least in Scotland. |
| Keywords: | population ageing, house prices, Scotland |
| JEL: | J1 R2 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6668&r=age |