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on Economics of Ageing |
| By: | Okumura, Tsunao; Usui, Emiko |
| Abstract: | Using the Japanese Study of Aging and Retirement (JSTAR), a new Japanese panel survey of people age 50 or older, we find that many Japanese in their early 50s - compared with those in their late 50s and early 60s - expect their level of public pension benefits to decline. We find that recent pension reform, which raised the pensionable age, affected people by increasing the age when they expect to claim their benefits by almost the exact same amount for all. The reform decreases their expectations for public pension benefits, although this effect is not necessarily significant. We also find evidence that individuals’ anxiety about the public pension program’s future induces an increase in their private savings. |
| Keywords: | subjective expectations, pension reform, uncertainty, savings |
| JEL: | E21 H55 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:hit:cisdps:559&r=age |
| By: | Grech, Aaron George |
| Abstract: | Successive reforms enacted since the 1990s have dramatically changed Europe’s pensions landscape. This paper tries to assess the impact of recent reforms on the ability of systems to alleviate poverty and maintain living standards, using estimates of pension wealth for a number of hypothetical cases. By focusing on all prospective pension transfers rather than just those at the point of retirement, this approach can provide additional insights on the efficacy of pension systems in the light of increasing longevity. Our estimates indicate that while reforms have decreased generosity significantly, in most countries poverty alleviation remains strong. However, moves to link benefits to contributions have made some systems less progressive, raising adequacy concerns for certain groups. In particular, unless the labour market outcomes of women and of lower-income individuals change substantially over the coming decades, state pension transfers will prove inadequate, particularly in Eastern European countries. Similarly while the generosity of minimum pensions appears to have either been safeguarded by pension reforms, or improved in some cases, these transfers generally remain inadequate to maintain individuals above the 60% relative poverty threshold throughout retirement. Our simulations suggest that the gradual negative impact of price indexation on the relative adequacy of state pensions is becoming even more substantial in view of the lengthening of the time spent in receipt of retirement benefits. The consumption smoothing function of state pensions has declined noticeably, strengthening the need for longer careers and additional private saving. When pressed, policymakers, particularly in Western Europe, seem to have been more willing to sacrifice the income smoothing function of pensions rather than its poverty alleviation function. Policymakers in some counties, notably Germany, France and the UK, have sought to refocus state pension systems towards generating better outcomes for people in the bottom half of the income distribution, probably with the insight that middle- to high-income individuals are possibly in a better position to accommodate the effect of state pension reforms by increasing their private saving. However in some cases, notably in Eastern Europe, results suggest that policymakers may not have fully considered the full impact of their policies on those on low incomes, on those with incomplete careers and on women. |
| Keywords: | Social Security; Public Pensions; Retirement; Poverty; Retirement Policies |
| JEL: | H55 I38 J26 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39851&r=age |
| By: | Lynn McDonald |
| Abstract: | Questions that people ask, when they hear that mandatory retirement has been repealing include: will people be forced to toil longer to stay financially healthy? Will they change careers later in life to keep their interest in a subject or explore new interests? How will working longer affect their health? How will much older people affect the ambitions and working styles of younger colleagues? Will companies have to change their health and benefit plans to accommodate older people? This chapter discusses implications for both individuals and companies about hiring/retaining workers beyond the mandatory retirement age including differences in power relationships that place older workers who love and want to stay in their job in a compromised position. Issues related to international political economy will be addressed. |
| Keywords: | Cultural economics, economic sociology, economic anthropology |
| JEL: | Z10 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:292&r=age |
| By: | Stancanelli, Elena G. F. (CNRS); van Soest, Arthur (Tilburg University) |
| Abstract: | In the scant literature on partners' joint retirement decisions one of the explanations for joint retirement is externalities in leisure. In this study, we investigate how retirement affects the hours of leisure together of individuals in a couple. Exploiting the law on retirement age in France, we use a regression discontinuity approach to identify the causal effect of retirement on hours of leisure separate and together of individuals in a couple. We find that the retirement probability increases significantly at age 60 for both partners, supporting our identification strategy. We conclude that retirement of the husband significantly increases own hours of leisure of the husband but it does not increase joint leisure hours of the couple. Retirement of the wife increases joint leisure. This asymmetry in responses is well in line with recent literature on joint retirement and suggests that leisure complementarities may not be the main engine of joint retirement. |
| Keywords: | leisure, ageing, retirement, regression discontinuity |
| JEL: | D13 J22 J14 C1 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6698&r=age |
| By: | Martin Beznoska; Viktor Steiner |
| Abstract: | The life-cycle hypothesis implies that consumption would not decline at retirement. However, several studies found relevant declines in food consumption after retirement for the United States. Others concluded that this contradiction of the life-cycle hypothesis is solved by allowing for broader measures of consumption than food. Using repeated cross-section data for Germany, this paper analyzes the retirement consumption puzzle for the German case. For our broadest consumption measure, which includes the flow of durables' consumption, we find, on average, no significant consumption decline at retirement. This also holds if the potential endogeneity of indidual retirement is controlled for in instrumental variable regressions. We also find heterogeneity in retirement effects among birth cohorts, the level of household wealth, and the level of consumption, but these effects do not support the hypothesis that retirement is associated with a strong reduction of consumption among poorer households. |
| Keywords: | Retirement consumption puzzle, life-cycle hypothesis, wealth effects, repeated cross-section data |
| JEL: | D12 D91 H31 H55 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1220&r=age |
| By: | Klimczuk, Andrzej |
| Abstract: | "Social Capital of Old People on the Example of Bialystok Residents" is a book based on theoretical and empirical study, which presents an issue of diagnosing and using of old people social capital in the local and regional development processes. This issue is significant because of the threats and challenges associated with process of rapid ageing of Polish society at the beginning of 21st century. Publication, in particular, is an attempt to give answers to the following questions: what is the state of old people social capital in Bialystok, what transformations it undergoes and how is it differentiated? In this study old people are viewed as a social category, which is a set of people similar to each other in terms of socially significant features (such as age, possessed social roles and awareness of received social benefits), who are aware of these similarities and differences between each other. Moreover, it is assumed, that such persons exceeded the 60 years of age. It is also assumed that human, social and cultural capital is accumulated in the human resources. Social capital is recognized here broadly as a potential for collaboration embedded in interpersonal relationships and social norms that may benefit individuals, groups and societies. The book consists of three chapters. The first, which is the theoretical part of work, includes information about: old age as a stage of individual life and explanation of the old people notion. It discusses social theories of ageing, historical factors affecting on the social position of old people category, changes in their place in Polish society during the system transformation and in the early 21st century. It describes the possible consequences of increased life expectancy for democracy and capitalism - including the concepts of society for all ages, silver economy. It also features ageing population issue, as well as social policy towards the elderly and old age in Bialystok as the borderland city. A variety of social capital concepts were presented; the spheres of its influence on socio-economic development, its status in Poland and guidelines for strategic building of its resources. Selected information on the activity of old people in public, social and economic life as key features of their social capital was brought closer. Putting various theoretical positions, results of research and statistical data in order was aimed to link many dispersed sources considering that it is relevant to identify and develop seniors' social capital resources, as well as leveling the delay of Polish sociology research on the elderly. Fundamental theoretical perspective of publication is the concept of capital according to P. Bourdieu. However, the proposals of J.S. Coleman, R.D. Putnam, F. Fukuyama, A. Giddens, P. Sztompka and A. Sadowski were also used. The second chapter contains a methodological framework for the purposes of study. Research assumptions, method and course of implementation of studies were discussed. The study is based on the qualitative method and the application of in-depth interview techniques. It was considered that the personal contact with old people will be more accurate than other research techniques to identify the context in which they social capital resources can be found. It is important because the transfer of developed abroad activating solutions and interpretations of old people actions may be ineffective or have negative external effects in the Polish context. Moreover, in the Polish science literature attention is paid to scarcity of gerontological research in accordance with the interpretive paradigm. Study involved 26 respondents aged 60 to 89 years living in Bialystok associated with one of two different institutions: nursing home for the elderly and University of the Third Age. By comparing the persons on two extremes of social activity it was possible to see similarities and differences in their capital equipment, and also in achievements of the life positions in the class structure and resources aimed at successful ageing. The third chapter presents the empirical analysis of the research results. This part outlines the way in which old people think about their ancestors and contemporary people. It also shows factors according to changes in their social position in the city, social issues which they consider most important for old people, their opinions about leisure time, opportunities and barriers of economic activity and types of old people social capital depending on the institution with which they are associated. Approach to the perception and use of internal disparities of seniors were also discussed. The analysis additionally contains the evaluation of senior citizens image in the polish mass media. This publication does not contain a strict ending. It only identifies the main conclusions of the research and potential directions of future analysis. Above all, older people could improve their position not by demanding increases in social benefits from which major parts are often taken away by their family members, but by highlighting their human, social and cultural capital. It is necessary to create favorable conditions for social and professional life of old people and their cooperation with members of local communities. Important role in this regard is played by institutions implementing three tasks: stimulating senior citizens' desire to satisfy previously unrealized needs; creating relationships between them so that they can solve their own problems and work for the others; and providing legal, social and vocational guidance. Stimulating cooperation between existing public, commercial and non-governmental sector organizations may serve to achieve these goals. The dissemination of bottom-up techniques of social capital building and checklist of essential features of Age-friendly Cities may also be important. |
| Keywords: | active ageing; age-friendly city; age discrimination; ageing; ageism; Bialystok (Podlasie Voivodship); border regions; borderland city; care elderly; cooperation; cultural capital; culture of poverty; development strategy; Discrimination in employment; economic activity; economic sociology; elderly; employment of persons in retirement age; employment of retirees; gerontechnology; gerontology; human capital; lifestyle; local development; lonely people; non-governmental organizations; nonprofit institutions; nursing home; old age; old age policy; old people; older people; older workers; pension age; peripheral regions; poverty; poverty enclave; professional activity; silver economy; silver market; social activity; social capital; social classes; social deviance; social diversity; social enclave; social exclusion; social inequality; social infrastructure; social marginalization; social policy; social security; social space; social welfare; sociology of ageing; sociology of borderland; sociology of the city; solidarity of generations; strategic management; strategic planning; third age; trust; university of the third age; welfare state |
| JEL: | R1 O2 P25 Z13 J11 J14 H75 I38 A14 |
| Date: | 2012–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39758&r=age |
| By: | Zhiyang Jia and Weizhen Zhu (Statistics Norway) |
| Abstract: | An extended life cycle model is used to investigate how variation in the level of expected pensions influences non-pension wealth accumulation. We try to explain why the offset effects between pension wealth and private savings are not one to one by accounting for different risks and market imperfections, which includes uninsured risk on earnings, mortality risk, borrowing constraints and bequest motive. The model is calibrated on Norwegian household data from 1992 to 2005. Based on the calibrated model, simulations are performed to explore consequences of introducing these factors. The result shows that by simply accounting these risks and constraints, we can explain most of the departure between empirical findings and theoretical prediction. |
| Keywords: | Life cycle model; Offset effect; pension wealth; private savings |
| JEL: | D91 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:697&r=age |
| By: | Jarkko Harju |
| Abstract: | This paper studies empirically savers? behavioral responses to the Finnish tax reform of 2005 by using comprehensive panel data. The tax schedule of voluntary pension savings changed from progressive to proportional, changing the saving incentives in different subgroups. The results indicate that the reform altered saving behavior by reducing voluntary pension saving coverage among high income-earners by 4 percentage points and increasing it among low incomeearners by 2 percentage points. The reform also reduced annual saving contributions among high income-earners by over 20 percent. The estimated effects result entirely from the changed saving behavior of men. |
| Keywords: | Voluntary pension savings, tax reform, tax incentives |
| JEL: | H24 H31 |
| Date: | 2012–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:33&r=age |
| By: | John B. Shoven; Sita Nataraj Slavov |
| Abstract: | Social Security benefits may be commenced at any time between ages 62 and 70. As individuals who claim later can, on average, expect to receive benefits for a shorter period, an actuarial adjustment is made to the monthly benefit to reflect the age at which benefits are claimed. In earlier work (Shoven and Slavov, 2012), we investigated the actuarial fairness of this adjustment for individuals with average life expectancy for their cohort. We found that for current real interest rates, delaying is actuarially advantageous for a large subset of people, particularly for primary earners in married couples. In this paper, we quantify the degree of actuarial advantage or disadvantage for individuals whose mortality differs from the average. We find that at real interest rates close to zero, most households – even those with mortality rates that are twice the average – benefit from some delay, at least for the primary earner. At real interest rates closer to their historical average, however, singles with mortality that is substantially greater than average do not benefit from delay; however, primary earners with high mortality can still improve the present value of the household’s benefits through delay. We also investigate the extent to which the actuarial advantage of delay has grown since the early 1960s, when the choice of when to claim first became available, and we decompose this growth into three effects: (1) the effect of changes in Social Security's rules, (2) the effect of changes in the real interest rate, and (3) the effect of changes in life expectancy. |
| JEL: | D14 H55 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18210&r=age |
| By: | Hohmeyer, Katrin (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Kopf, Eva (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Fiebig, Mareike; Grüttner, Michael (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "The increasing life expectancy coming along with a birth deficit is expected to lead to an increasing demand for elderly care in Germany in the future. In Germany, private home care, often provided by family members, is given primacy over institutional care. At the same time, a labour market participation of broad groups of people is necessary for the sustainable financing of the social security system. However, informal care-giving and labour market participation might not be compatible for all care-givers. Consequently, a conflict of goals - labour market participation and informal home care for persons in need of care - might occur. Also needy individuals receiving the welfare benefit 'Unemployment Benefit II' have to be available for job placement in order to reduce or end their neediness. The research report, therefore, describes care-giving activities of individuals living in households receiving the welfare benefit 'Unemployment Benefit II'. Based on the first four waves of the panel study 'Labour Market and Social Security', the report considers observations aged between 15 and 64 years who lived in a household receiving the welfare benefit at the time the sample was drawn. About 7 % of the respondents provide care to relatives or friends. The amount as well as the type of care provided varies strongly over observations. Carers are more often female, aged 35 years or older, have children and cohabit with a partner than non-carers. They are less likely to be employed and more likely to live in a household with welfare benefit receipt at the time of the interview. They are less often required to search for a job than non-carers. However, only for roughly one quarter of them, care-giving is the reason for not being obliged to search for a job. This indicates that care-giving is not necessarily preventing employment but that care-giving might also arise due to non-employment." (Author's abstract, IAB-Doku) ((en)) |
| Date: | 2012–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabfob:201210&r=age |
| By: | Galo Nuño (European Central Bank); Cristina Pulido (Banco de España); Rubén Segura-Cayuela (Bank Of America Merril Lynch) |
| Abstract: | This paper analyses the long-run growth rates of advanced economies, based on demographic factors. To this end, growth is broken down into two components: growth in productivity (GDP per working-age person) and the projected rate of growth of the working-age population. Productivity is assumed to grow in the long-run at a constant rate equal to that of the technology leader, whereas the demographic projections are those of the United Nations. This simple methodology abstracts from other factors normally considered in the literature on long-term growth, such as the convergence process (we focus on advanced economies) and heterogeneity in participation and employment rates. However, the results do not differ much from those obtained using these other approaches (which are richer, but also more speculative), although the growth rates turn out to be somewhat lower in most cases. They indicate a general deceleration of growth in advanced economies in the coming two decades, due to a slowdown in working-age population growth. Japan, Germany, Italy and Spain face the least favourable growth dynamics in our sample, as these countries face reductions in the size of their workforces. By 2050 France and the United Kingdom could have overtaken Germany to become the largest economies in Europe. In the case of Spain (whose working-age population is expected to peak in 2024) the growth rate of GDP will progressively decline to just below 2% over the following decade. |
| Keywords: | Advanced economies, demography, convergence, endogenous growth. |
| JEL: | E20 O40 O50 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:bde:opaper:1206&r=age |