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on Economics of Ageing |
| By: | Holzmann, Robert (University of Malaya) |
| Abstract: | Population aging is typically associated with economic challenges for productivity and financial threats for the old-age financial protection system of a country. This paper takes an optimistic position and outlines key ingredients to make it a successful experience. Yet to turn this challenge into an opportunity requires a significant change in a society's mindset and policies, such as recognizing that population aging and increased life expectancy are quite likely the biggest challenge to mankind in recorded history. This calls for a review and revision of societal institutions, from the likely oldest one – marriage – to one of the youngest – retirement income schemes. Mere tinkering at the margin of existing retirement income programs will be neither sufficient nor helpful. To develop the arguments, the paper reviews and proposes changes to the measurement of population aging – globally and for East Asian countries; outlines critical policy paths to address population aging successfully; analyzes the implications of population aging for the selection of an old-age financial protection system; and offers guidance to this end. |
| Keywords: | NDC, life expectancy, measuring population aging, happy aging, FDC |
| JEL: | H55 J11 J14 J26 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7571&r=age |
| By: | Bloemen, Hans (VU University Amsterdam); Hochguertel, Stefan (VU University Amsterdam); Zweerink, Jochem (VU University Amsterdam) |
| Abstract: | This paper identifies and estimates the impact of early retirement on the probability to die within five years, using administrative micro panel data covering the entire population of the Netherlands. Among the older workers we focus on, a group of civil servants became eligible for retirement earlier than expected during a short time window. This exogenous policy change is used to instrument the retirement choice in a model that explains the probability to die within five years. Exploiting the panel structure of our data, we allow for unobserved heterogeneity by way of individual fixed effects in modeling the retirement choice and the probability to die. We find for men that early retirement, induced by the temporary decrease in the age of eligibility for retirement benefits, decreased the probability to die within five years by 2.5 percentage points. This is a strong effect. We find that our results are robust to several specification changes. |
| Keywords: | instruments, retirement, mortality |
| JEL: | C26 I1 J26 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7570&r=age |
| By: | Burkhard Heer (University of Augsburg); Andreas Irmen (CREA, Université de Luxembourg) |
| Abstract: | We study the effect of a declining labor force on the incentives to engage in labor-saving technical change and ask how this effect is influenced by institutional characteristics of the pension scheme. When labor is scarcer it becomes more expensive and innovation investments that increase labor productivity are more profitable. We incorporate this channel in a new dynamic general equilibrium model with endogenous economic growth and heterogeneous overlapping generations. We calibrate the model for the US economy and obtain the following results. First, the effect of a decline in population growth on labor productivity growth is positive and quantitatively significant. In our benchmark, it is predicted to increase from an average annual growth rate of 1.74% over 1990-2000 to 2.41% in 2100. Second, institutional characteristics of the pension system matter both for the growth performance and for individual welfare. Third, the assessment of pension reform proposals may depend on whether economic growth is endogenous or exogenous. |
| Keywords: | Growth, Demographic Transition, Capital Accumulation, Pension Reform |
| JEL: | O41 C68 O11 D91 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:13-17&r=age |
| By: | Cremer, Helmuth (Toulouse School of Economics); Roeder, Kerstin (University of Munich) |
| Abstract: | This paper studies the determination of informal long-term care (family aid) to dependent elderly in a worst case scenario concerning the "harmony" of family relations. Children are purely selfish, and neither side can make credible commitments (which rules out efficient bargaining). The model is based on Becker's "rotten kid" specification except that it explicitly accounts for the sequence of decisions. In Becker's world, with a single good, this setting yields efficiency. We show that when family aid (and long-term care services in general) are introduced, the outcome is likely to be inefficient. Still, the rotten kid mechanism is at work and ensures that a positive level of aid is provided as long as the bequest motive is operative. We identify the inefficiencies by comparing the laissez-faire (subgame perfect) equilibrium to the first-best allocation. We initially assume that families are identical ex ante. However, the case where dynasties differ in wealth is also considered. We study how the provision of long-term care (LTC) can be improved by public policies under various informational assumptions. Interestingly, crowding out of private aid by public LTC is not a problem in this setting. With an operative bequest motive, public LTC will have no impact on private aid. More amazingly still, when the bequest motive is (initially) not operative, public insurance may even enhance the provision of informal aid. |
| Keywords: | rotten kids, long-term care, family aid, optimal taxation |
| JEL: | D13 H21 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7565&r=age |
| By: | Patrizio Piraino (Department of Economics, University of Cape Town); Sean Muller (Department of Economics, University of Cape Town); Jeanne Cilliers (Department of Economics, University of Stellenbosch); Johan Fourie (Department of Economics, University of Stellenbosch) |
| Abstract: | The literature on parent-child correlations in socioeconomic status provides little evidence on long-term multigenerational dynamics. This is because most studies of intergenerational status persistence are based on two (at most three) successive generations. Our analysis adds to the intergenerational mobility literature by studying the correlation in longevity across multiple generations of a historical population. By using information on birth and death dates of eighteenth and nineteenth century settlers in South Africa’s Cape Colony, we are able to estimate the intergenerational transmission of longevity, which is found to be positive and significant. Our analysis confirms one of the most consistent findings in the social sciences: the correlation between the status of parents and that of their offspring is positive and significant. |
| Keywords: | intergenerational mobility, persistence, social mobility, inequality, genealogical, Cape Colony |
| JEL: | J62 N37 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers190&r=age |
| By: | Sterdyniak, Henri (OFCE) |
| Abstract: | François Hollande et le gouvernement Ayrault veulent de nouveau réformer les retraites en 2013, trois ans après la réforme de 2010. Dans son intervention du 28 mars, François Hollande a mis en avant le déficit prévu de 20 milliards en 2020 pour annoncer un nouvel allongement de la durée de cotisations tout en refusant la désindexation des petites retraites et des retraites du régime général. Jean-Marc Ayrault annonce que la « réforme traitera la pénibilité au travail, la complexité des régimes et résoudra les inégalités. Au final, nous paierons les retraites, nous préserverons les plus petites retraites et nous pérenniserons les régimes de retraite pour les générations à venir » (...). |
| Date: | 2013–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:ner:sciepo:info:hdl:2441/7o52iohb7k6srk09ne5qj60b2&r=age |