nep-age New Economics Papers
on Economics of Ageing
Issue of 2013‒02‒08
five papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Closing the Gap between the Retirement Age and the Normal Pensionable Age in Japan By Takayama, Noriyuki
  2. Managing Pension and Healthcare Costs in Rapidly Ageing Depopulating Countries: The Case of Japan By Takayama, Noriyuki
  3. On Financing Retirement with an Aging Population By Ellen R. McGrattan; Edward C. Prescott
  4. Heterogeneity in time preference in older households By Antoine Bozio; Guy Laroque; Cormac O'Dea
  5. Empirical Determinants of Intertemporal Choice By Jeffrey R. Brown; Zoran Ivković; Scott Weisbenner

  1. By: Takayama, Noriyuki
    Date: 2013–01
  2. By: Takayama, Noriyuki
    Date: 2013–01
  3. By: Ellen R. McGrattan; Edward C. Prescott
    Abstract: A problem facing the United States is financing retirement consumption as its population ages. Policy analysts increasingly advocate savings-for-retirement systems, but are concerned with insufficient savings opportunities with limited government debt. This concern is unwarranted. First, there is more productive capital than commonly assumed in macroeconomic modeling. Second, if the policy reform subsumes the elimination of capital income taxes, then the value of business equity increases relative to the capital stock. Phasing in a switch from the current U.S. system to a savings-for-retirement system without capital income taxes increases welfare of all current and future cohorts.
    JEL: E20 G18 H21 H61
    Date: 2013–02
  4. By: Antoine Bozio (Institute for Fiscal Studies and a report); Guy Laroque (Institute for Fiscal Studies and University College London); Cormac O'Dea (Institute for Fiscal Studies)
    Abstract: This paper suggests a method for estimating the distribution of discount rates using panel data on income and wealth. Using the English Longitudinal Survey of Ageing (ELSA), a representative sample of the English popularion over age 50, we general panel date on total consumption from the intertemporal budget constraint. The distribution of consumption levels is shown to closely match that estimated using the UK's household budget survey. Consumption transitions over time are then used to estimate the discount rates of households. We show that there is substantial heterogeneity in discounting behaviour and find that, among this older population, households with less education or numerical ability exhibit greater patience than those with higher education or numerical ability. The direction of this association is the opposite to that which has been found in experimental investigations of time preference.
    Keywords: Time preference; Discount rate; Heterogeneity; Consumption
    JEL: D12 D31 D91 E21
    Date: 2013–01
  5. By: Jeffrey R. Brown; Zoran Ivković; Scott Weisbenner
    Abstract: We study the empirical determinants of intertemporal choice by analyzing a unique decision Croatian retirees made recently about whether to accept an immediate pension payment or a larger stream of delayed payments. Individual decisions are correlated in sensible ways with income, liquidity constraints, longevity expectations, and other covariates. Attitudes toward government also matter: those less confident that the government will honor its commitments are more likely to take the immediate stream of payments. Those who believe it is important to receive “the full amount due, no matter how long it takes” are substantially more likely to take the delayed payments.
    JEL: D12 D91 H31 H55
    Date: 2013–02

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