nep-age New Economics Papers
on Economics of Ageing
Issue of 2013‒03‒09
five papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Author-Name: Social Security and Integration By Lionel Artige; Antoine Dedry; Pierre Pestieau
  2. Liability Driven Investments under a Benchmark Based Approach By Jan Baldeaux; Eckhard Platen
  3. Financial Autarchy as Contagion Prevention: The Case of Colombian Pension Funds By Edgardo Cayon; Susan Thorp
  4. Age Dependency and Labor Productivity Divergence By Misbah Tanveer Choudhry
  5. New Alternatives in a Plural Society: Care to Dependents and Foreign Care By García Navarro, Esperanza Begoña

  1. By: Lionel Artige; Antoine Dedry; Pierre Pestieau
    Abstract: The purpose of this letter is to analyze the impact of economic integration when countries differ in their social security systems, more specifically in the degree of funding of their pensions, and in the regulation of the retirement age. Funding and mandatory early retirement are two features which foster capital accumulation relative to pay-as-you-go pensions with exible retirement. In case of economic integration they both imply some capital outow and may lead to some utility losses.
    Date: 2013
  2. By: Jan Baldeaux; Eckhard Platen (Finance Discipline Group, UTS Business School, University of Technology, Sydney)
    Abstract: In this paper, we present an alternative approach as a suitable framework under which liability driven investments can be valued and hedged. This benchmark approach values both assets and liabilities consistently under the real world probability measure using the best performing portfolio, the growth optimal portfolio, as benchmark and numeraire. The benchmark approach identifies the investment strategy which is replicating a given claim at minimal cost. Should the liability under consideration be subject to nonhedgeable risk, e.g. mortality risk, benchmarked risk minimization identifies with its real world pricing formula the investment strategy which minimizes in a practical sense the price of a given claim and minimizes the benchmarked profit and loss from hedging. The application of the approach will be demonstrated for pensions. A least expensive pension scheme will be described that allows one in a fair and transparent manner to hedge in the least expensive way with minimal risk the post retirement payments for its members.
    Keywords: liability driven investment; benchmark approach; least expensive pensions
    JEL: G11 G12
    Date: 2013–02–01
  3. By: Edgardo Cayon (Finance Discipline Group, UTS Business School, University of Technology, Sydney); Susan Thorp (Finance Discipline Group, UTS Business School, University of Technology, Sydney)
    Abstract: Regulations restricting investment by pension funds in high risk and foreign assets may quarantine member accounts from contagious transmissions during financial crises. This paper analyses contagion from US equity markets to emerging market autarchic assets (Colombian private pension funds) during the recent financial crises. We test for contagion as changes in systematic risk between financial asset returns using an M-GARCH framework, where the S&P500 is the source of contagion to the autarchic asset. We find no evidence of contagion during the 2007-2009 crises, indicating protection to plan members from regulated portfolio restrictions during this period, but contagion from US stocks and fixed interest factors is significant during the recent sovereign debt crisis.
    Keywords: emerging markets; global financial crisis; sovereign debt crisis; regulation; systematic risk
    Date: 2013–01–01
  4. By: Misbah Tanveer Choudhry
    Abstract: This study finds strong empirical evidence in favor of the hypothesis that age composition of population matters for labor productivity growth. We applied the fixed effects panel model using data of large number of countries over the period 1980-2005. Our results suggest that higher age dependency impacts the labor productivity negatively not only directly but also modifies the impact of other determinants of labor productivity. Child dependency has more adverse effect on labor productivity as compared to old age dependency. We specifically find that marginal effect of gross capital formation, labor market reforms and information and communication technology investment on labor productivity is high and significant at lower level of age dependency. However, the marginal effect of financial development on labor productivity increases at high level of age dependency in developing economies. Diversity in size and nature of age dependency across regions and different income groups helps to explain labor productivity differential across them.
    Keywords: labour productivity growth, Age dependency, panel fixed effects
    JEL: C22 C23 O47
    Date: 2013–01–02
  5. By: García Navarro, Esperanza Begoña (University of Huelva)
    Abstract: Taking care of a dependent person means to supply those needs that this person cannot satisfy by himself due to his lack of independence or autonomy (Henderson). Care is transmitted from one generation to another as a social practice and as a cultural heritage. It is taught through culture and social practices, and it is learnt through personal experience. At the same time, care does not happen in an empty context but in the context of systems and health and social structures, among other things, that finish its shape. When caring, the culture and social practices of a carer from one country (country of origin) are different in comparison with those of the country of destination. The concept of transcultural care of Leinnenger echoes the cultural diversity that this difference or opposition involves, and recommends incorporating it in the professional practice, developing care practice which she defines as culturally competent. Other theoreticians in the field of nursing incorporate additional dimensions such as prejudice, developing approaches in which it is argued that care should be accompanied by an intercultural sensitivity (Campinha-Bacote). This article presents a study on female migrant carers and their care strategies in key areas in the province of Huelva and the city itself, southwest of Spain, where they provide elderly care in different areas of expertise: specialised care in hospitals and care for the family unit at home. After an initial description of the demographic profile of the carers interviewed in our study area, our objective is to know the strategies they develop when caring for people from different backgrounds and how they are integrated into the social, cultural and institutional context of taking care to dependents of the host society.
    Keywords: Transcultural care; Social practices; Female migrant; Dependent person
    JEL: I11
    Date: 2013–02–13

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