nep-age New Economics Papers
on Economics of Ageing
Issue of 2013‒05‒11
eight papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Declining bargaining power of workers and the rise of early retirement in Europe By Batyra, Anna; de la Croix, David; Pierrard, Olivier; Sneessens, Henri R.
  2. New figures on unfunded public pension entitlements across Europe: Concept, results and applications By Kaier, Klaus; Müller, Christoph
  3. How does subjective well-being evolve with age? A literature review By López Ulloa, Beatriz Fabiola; Møller, Valerie; Sousa-Poza, Alfonso
  4. Une analyse des déterminants socio-économiques de la fragilité des personnes âgées à partir des données de panel et rétrospectives de SHARE By Nicolas Sirven
  5. Heterogeneity in Labor Supply Elasticity and Optimal Taxation By Marios Karabarbounis
  6. Do Spanish informal caregivers come to the rescue of dependent people with formal care unmet needs? By Sergi Jiménez-Martín; Cristina Vilaplana Prieto
  7. National and State Trends in Enrollment and Spending for Dual Eligibles Under Age 65 in Medicaid Managed Care. By Jenna Libersky; Allison Hedley Dodd; Shinu Verghese
  8. "An Interval Regression Analysis for Tenures of Japanese Elder Care Workers Using Matched Employer-Employee Data" By Shinya Sugawara

  1. By: Batyra, Anna (Galatasaray University Economic Research Center); de la Croix, David; Pierrard, Olivier; Sneessens, Henri R.
    Abstract: We offer an alternative explanation for the decline in labor force participation of senior workers. Typically, tax and transfer explanations have been proposed. On the contrary, a model with imperfectly competitive labor market allows to consider as well the effects of a drop in bargaining power, which would not be possible in a purely neoclassical framework. We find that a decline in the bargaining power of workers, which has taken place in the last four decades, has largely contributed to the rise in inactivity in Europe. However, we need a combination of these two explanations, along with population aging and a fall in the matching efficiency, in order to correctly reproduce the joint evolutions of other labor market variables such as the employment and unemployment rates.
    Keywords: Overlapping Generations; Search Unemployment; Labor Force Participation; Ageing; Labor Market Policy and Institutions
    JEL: E24 H55 J26 J64
    Date: 2013–05–03
  2. By: Kaier, Klaus; Müller, Christoph
    Abstract: A major aim of the recent updates of National Accounting standards (SNA2008 and ESA2010) is to provide a more complete picture of households' wealth. In this course it will become mandatory for European countries to publish annual estimates of unfunded public pension entitlements (UPPE) from 2017 onwards. This study describes the methodological concepts behind this new figure of national accounts. After a review of past studies on the subject of UPPE we provide a large cross-country comparison for 18 EU countries of this new pension wealth figures and discuss a number of possible applications for policy makers and researchers. This includes the use to estimate the offset between UPPE and savings (Feldstein 1974). Finally, we show the distribution of households' wealth across Europe including financial wealth, dwellings and UPPE. Many prosperity differences between countries with Beveridgean and Bismarkian pension systems as well as between western and central eastern European countries are eliminated when considering these three wealth categories. In addition, a direct comparison of UPPE with replacement rates shows that these two proxies for the generosity of pension systems are completely uncorrelated at the cross-country level. --
    Keywords: households' wealth,pension liabilities,pension entitlements,household saving
    JEL: E21 H55 H63
    Date: 2013
  3. By: López Ulloa, Beatriz Fabiola; Møller, Valerie; Sousa-Poza, Alfonso
    Abstract: This literature review provides an overview of the theoretical and empirical research in several disciplines on the relation between ageing and subjective well-being, i.e., how subjective well-being evolves across the lifespan. Because of the different methodologies, data sets and samples used, comparison among disciplines and studies is difficult. However, extant studies do show either a U-shaped, inverted U-shaped or linear relation between ageing and subjective well-being. --
    Keywords: Life satisfaction,Ageing,U-shape
    Date: 2013
  4. By: Nicolas Sirven (IRDES Institut de recherche et documentation en économie de la santé)
    Abstract: Les études récentes sur la demande de soins de long terme ont mis en évidence le rôle de la fragilité en tant que précurseur de la perte d’autonomie, indépendamment des maladies chroniques. La fragilité est définie comme un état de santé vulnérable résultant de la diminution de la réserve physiologique de la personne âgée. Ce concept médical est introduit ici dans un cadre d’analyse économique afin d’étudier le rôle des politiques sociales dans la prévention de la perte d’autonomie et le maintien de la qualité de vie des personnes en perte d’autonomie. En utilisant quatre vagues de données de panel de l’enquête SHARE (Survey on Health, Ageing, and Retirement in Europe), un indice de fragilité est créé comme métrique de cinq critères physiologiques (modèle de Fried) pour des répondants âgés de 50 ans et plus dans dix pays européens, entre 2004 et 2011. La dimension longitudinale est explorée de deux manières. Premièrement, les différences dans l’évolution de la fragilité sur une période de sept ans sont analysées à partir de variables pertinentes pour la politique sociale (soutien au revenu, aménagement du logement et prévention de l’isolement social) dans un modèle de panel à effets fixes. Deuxièmement, les effets fixes individuels sont décomposés grâce à un modèle à effets aléatoires avec une spécification à la Mundlak. Les données rétrospectives supplémentaires de SHARE sur l’histoire de vie (SHARELIFE) sont ensuite utilisées pour examiner les différences entre les niveaux de fragilité. Les résultats révèlent la présence de plusieurs sources d’inégalités sociales au cours de la vie. Il s’avère donc que les systèmes de protection sociale jouent un rôle majeur dans l’accompagnement, la prévention ou la réduction du processus de perte d’autonomie. Plusieurs implications pour les politiques publiques sont suggérées.
    Keywords: Demande en santé, Soins de long-terme, Soutien au revenu, Prévention, Econométrie de panel, Spécification à la Mundlak.
    JEL: I12 J14 C23
    Date: 2013–04
  5. By: Marios Karabarbounis (University of Rochester)
    Abstract: Standard public finance principles imply that workers with more elastic labor supply should face smaller tax distortions. This paper quantitatively tests the potential of such an idea within a realistically calibrated life cycle model of labor supply with heterogeneous agents and incomplete markets. Heterogeneity in labor supply elasticity arises endogenously from differences in reservation wages. I find that older cohorts are much more responsive to wage changes than younger and especially middle aged cohorts. Both a shorter time horizon and a larger stock of savings account for this difference. Since the government does not have direct information on individual labor supply elasticity it uses these life cycle variables as informative moments. The optimal Ramsey tax policy decreases the average and marginal tax rates for agents older than 50 and more so the larger is the accumulated stock of savings. At the same time, the policy increases significantly the tax rates for middle aged workers. Finally, the optimal policy provides redistribution by decreasing tax rates of wealth-poor young workers. The policy encourages work effort by high elasticity groups while targets inelastic middle aged groups to raise revenues. As a result, total supply of labor increases by 2.98% and total capital by 5.37%. These effects translate into welfare gains of about 0.85% of annual consumption.
    Date: 2012
  6. By: Sergi Jiménez-Martín; Cristina Vilaplana Prieto
    Abstract: This paper analyses the effect of unmet formal care needs on informal caregiving hours in Spain using the two waves of the Informal Support Survey (1994, 2004). Testing for double sample selection from formal care receipt and the emergence of unmet needs provides evidence that the omission of either one of these two variables would causes underestimation of the number of informal caregiving hours. After controlling for these two factors the number of hours of care increases with both the degree of dependency and unmet needs. In the presence of unmet needs, the number of informal caregiving hours increases when some formal care is received. This result refutes the substitution model and supports complementarity or task specificity between both types of care. For the same combination of formal care and unmet needs, informal caregiving hours increased between 1994 and 2004. Finally, in the model for 2004, the selection term associated with the unmet needs equation is larger than that of the formal care equation, suggesting that using the number of formal care recipients as an indicator of the goodness of the long-term care system may be confounding, if we do not complete this information with other quality indicators.
    Keywords: double sample selection, unmet need, informal care, caregiver, formal care
    JEL: H41 I10 I11
    Date: 2013–04
  7. By: Jenna Libersky; Allison Hedley Dodd; Shinu Verghese
    Abstract: This article uses 2005 and 2008 Medicaid Analytic eXtract (MAX) data to present spending and enrollment trends for adults with disabilities who are dually eligible for Medicare and Medicaid. Nationwide, the proportion of adult duals in managed care increased from 2005 to 2008, with the expansion of prepaid health plans (PHPs), particularly behavioral health PHPs, driving the increase. Although overall use of managed care has increased, there has been little expansion in the use of comprehensive managed care among adult dual eligible beneficiaries, particularly when compared with their Medicaid-only disabled adult peers. This imbalance suggests room to remove barriers preventing dually eligible adults, from enrolling in comprehensive, integrated managed care.
    Keywords: Medicaid, Dual Eligibles, Managed Care, Disability
    JEL: I J
    Date: 2013–04–30
  8. By: Shinya Sugawara (Faculty of Economics, University of Tokyo)
    Abstract:       This paper analyzes job tenures of Japanese elder care workers in the home care service sector, using an econometric framework that can fully utilize information of available data. This sector reveals a large betweenfirm difference in workers' separation rates, despite a regulation policy that induces a limited wage dispersion. I rationalize this puzzling observation by a screening model in which firms try to avoid adverse selection caused by information asymmetry regarding workers' motivation. My model induces a separating equilibrium in which several firms cover training costs for general human capital accumulation of workers. To examine a testable implication of my screening model, I construct an interval regression model using cross-section data with matched employer-employee information. A standard Bayesian estimation provides empirical results that support my economics model.
    Date: 2013–04

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