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on Economics of Ageing |
| By: | Ricky Kanabar; Peter Simmons |
| Abstract: | The UK state pension (which depends only on age) includes an option to defer take up which yields either a subsequent lump sum or higher weekly pension. We analyse the joint decisions on pension deferral and intertemporal labour supply/participation in a life cycle setting. We show that deferral is purely a financial decision, but the impact of deferral on work decisions depends on preferences, wage rates, non-labour income and initial wealth. To exactly characterise this we use a quasilinear utility function, and provide calibrated simulations. We also discuss the choice between a lump sum or increased weekly pension |
| Keywords: | Retirement, Labour Supply, Ageing, UK State Pension |
| JEL: | J14 J18 J22 J26 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:13/26&r=age |
| By: | Makoto Nakajima; Irina A. Telyukova |
| Abstract: | The “retirement saving puzzle” is a phenomenon in which many households U.S. households have significant wealth late in life, contrary to the predictions of a simple life-cycle model. In this project, we examine cross-country differences in the saving behavior of retirees in order to weigh in on the discussion of the puzzle. First, we find that countries in our sample vary noticeably in terms of the extent of the puzzle: one group of countries, in South and Central Europe, look like the United States, while in Northern Europe, retirees spend down their wealth much more rapidly. Second, it appears that the rate of dissaving in retirement is correlated with the extent of public coverage of healthcare and long-term care, and these differences in saving happen predominantly through dissaving of financial assets, while housing assets are less affected. In a quantitative experiment using a life-cycle model of saving in retirement, we measure the role of out-of-pocket medical spending risk in accounting for differences in observed saving patterns among retirees in the United States and Sweden, considering housing and financial assets separately. The model predicts that this risk accounts, on average across age, for one-half of the difference in median net worth between United States and Sweden, and for about 70 percent of the difference in median financial assets. The role of risk diminishes with age, and is seen primarily in financial asset saving, while housing assets do not appear to respond to spending risk, suggesting that housing is not a precautionary asset. |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2013-18&r=age |
| By: | Schwandt, Hannes (Princeton University) |
| Abstract: | A large literature in behavioral and social sciences has found that human wellbeing follows a U-shape over age. Some theories have assumed that the U-shape is caused by unmet expectations that are felt painfully in midlife but beneficially abandoned and experienced with less regret during old age. In a unique panel of 132,609 life satisfaction expectations matched to subsequent realizations, I find people to err systematically in predicting their life satisfaction over the life cycle. They expect – incorrectly – increases in young adulthood and decreases during old age. These errors are large, ranging from 9.8% at age 21 to -4.5% at age 68, they are stable over time and observed across socio-economic groups. These findings support theories that unmet expectations drive the age U-shape in wellbeing. |
| Keywords: | life satisfaction, expectations, aging |
| JEL: | A12 I30 D84 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7604&r=age |
| By: | HASHIMOTO Hideki |
| Abstract: | Despite an extensive amount of published economic, psychological, and public health research, a consensual view on the causal relationship between retirement and health remains to be articulated. This lack of consensus is arguably due to the diversity in the transitional process from employment to full retirement, the usage of various characteristics of outcome measures, social and economic conditions affecting the retirement decision, and the impact of crowding-out by activities not related to formal work (e.g., in the family and community network). We used panel data from the Japanese Study of Aging and Retirement (JSTAR) to scrutinize the complex relationships among employment status transition; physical, functional, and cognitive aspects of health measures; and types of social participation. We confirmed that transitioning from employment to retirement is a diverse and gradual process with distinct gender-related aspects. Social participation is significantly related to exiting formal work situations for men, but not for women. There were distinct patterns of health transition across employment status transition, by types of health measures, and by reasons for retirement. Regression analyses were conducted to identify the effect of retirement, as leave from paid work, on health conditions. Variables included in the analyses accounted for social participation, stress received from the former job, and reasons for retirement. The results which included propensity weighting reveal that psychological distress and cognitive function decline after retirement for men, but not for women. Retirement from jobs with high stress was followed by an improvement in health, especially among men. Additional results indicate that retirement is accompanied by increased social participation. Social participation ameliorates psychological distress and cognitive decline among men, but not among women. Limitations in the instrumental activities of daily life as well as in grip strength are not considerably affected by retirement. Among women, retirement to engage in family care significantly and heavily affected the level of psychological distress. These results indicate that the theories on which aspects of health status determine—and are determined by—the mode of employment status transition should be improved. Policies on work and health in the elderly population should not seek a one-size-fits-all solution, but should target different segments in terms of work characteristics, economic and social needs, and gender roles in the household. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:13078&r=age |
| By: | Zou, Tieding |
| Abstract: | This paper gives a literature review for the affecting factors of pension reforming,the result indicates that,(1)Efficiency and equity are the two aspects of pension system ,and the aging problem,labor productivity,ma- croeconomic environment,et al. will affect the relationship between efficiency and equity.(2)Parameter adjusting and Structure reforming is a good way to strengthen the ability to cope with aging and improve the budget condi- tion for pension system.(3)In order to narrow the wealth gap ,keep some redistributive function is necessary.(4)D- uring a pension reforming,not only the equity is important ,but also the efficiency,the disequilibrium of capital market and labor market can be improved through pension reforming.(5)Pension reforming must pay attention to political preference of different interest group,the majority voting rule must be obeyed,which is useful to guarantee the system’s universality and impartiality,and will be good to enhance the political feasibility of pension reforming. |
| Keywords: | Pension; Equity; Efficiency; Aging; Decision Mechanism |
| JEL: | G22 H53 I38 J14 |
| Date: | 2013–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:49578&r=age |
| By: | John B. Shoven; Sita Nataraj Slavov |
| Abstract: | Social Security retirement benefits can be claimed at any age between 62 and 70, with delayed claiming resulting in larger monthly payments. In Shoven and Slavov (2013), we show that claiming later increases the present value of lifetime benefits for most individuals. However, this has not always been the case. During the late 1990s and early 2000s, a number of policy changes increased the gains from delay, particularly for couples. In addition, mortality improved and real interest rates fell substantially over this period, further increasing the attractiveness of delay. We perform simulations to examine the role of these factors in changing the gains from delay. We find that the gains from delay increased substantially after 2000, with changes in the interest rate playing the largest role in driving the increase. Using data from the Health and Retirement study, we show that individuals who turned 62 after 2000 are indeed more likely to delay than those who turned 62 before 2000. However, even in the younger cohort, most individuals still claim benefits soon after turning 62. Moreover, we find no evidence of a relationship between the probability of delay and the individual characteristics (e.g., gender, race, or health status) that affect the gains from delay. |
| JEL: | D14 H55 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19370&r=age |
| By: | Peine; Moors |
| Abstract: | In this paper, we strive to unravel in how far current practices of Health Technology Assessment (HTA) are suitable to guide health policy decisions about personal health systems (PHS). We focus on the implicit representations of users and their position in the innovation process that underly established HTA practices, and explore in how far these representations are conducive to health technology decisions that support older people in meaningful and active lives. Our analysis builds on Callon’s recent distinction between prosthetic and habilitation social policies [M. Callon, Economic Markets and the Rise of Interactive Agencements: From Prosthetic Agencies to Habilitated Agencies, in: T. Pinch, R. Swedberg (Eds.), Living in a Material World: Economic Sociology Meets Science and Technology Studies, The MIT Press, Cambridge, 2008, pp. 29-56]. We revisit the results of two case studies that we conducted in the fields of Point-of-Care Diagnostics, set in the domains of primary and secondary care, and care robot service platforms operating in domestic environments. By contrasting these cases we demonstrate how a different logic of addressing values in innovation feeds into either prosthetic or habilitation policy decisions about health technology. Based on this analysis, we argue that HTA practices in the context of PHS need to incorporate a logic of valuing health technology in order to fully deliver the potential of PHS to the lives of older persons. |
| Keywords: | Innovation, health technology, ageing, user representation, care robots, HTA |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:uis:wpaper:1302&r=age |
| By: | LEFEBVRE, Mathieu (University of Liège); PESTIEAU, Pierre (University of Liège; Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium; PSE and CEPR); PONTHIERE, Grégory (Paris School of Economics and Ecole Normale Supérieure, Paris) |
| Abstract: | Income-differentiated mortality, by reducing the share of poor persons in the population, leads to what can be called the "Mortality Paradox": the worse the survival conditions of the poor are, the lower the measured poverty is. We show that the extent to which FGT measures (Foster Greer Thorbecke 1984) underestimate old-age poverty under income-differentiated mortality depends on whether the prematurely dead would have, in case of survival, suffered from a more severe poverty than the average surviving population. Taking adjusted FGT measures with ex- tended lifetime income profiles as a benchmark, we identify conditions under which the selection bias induced by income-differentiated mortality is higher for distribution-sensitive measures than for headcount measures. Finally, we show, on the basis of data on poverty in 11 European economies, that the size of the selection bias varies across different sub-classes of FGT measures and across countries. |
| Keywords: | income-differentiated mortality, FGT poverty measures |
| JEL: | I32 |
| Date: | 2013–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2013042&r=age |
| By: | Beatrice Rammstedt; Frank M. Spinath; David Richter; Jürgen Schupp |
| Abstract: | Evidence of assortative mating according to personality was reported in a previous SOEP-based study (Rammstedt & Schupp, 2008). Based on population representative data of almost 7,000 couples, high levels of congruence between spouses were found, which increased with marriage duration. Almost 5,000 of these couples were tracked over a five-year period with personality assessed at the beginning and end of this time, which allowed us to investigate the relationship between personality congruence and marriage duration longitudinally. Using this data, we investigated (a) whether personality congruence is predictive for partnership longevity and whether congruence therefore differs between subsequently stable and instable couples, (b) if stable couples become more congruent, and (c) if separated couples become less congruent with regard to their personality over time. The results provide initial evidence of personality congruence as a predictor for partnership longevity: the more congruent couples are in the personality domain of Openness, the more stable their partnership. In addition, we found no indications of an increase in personality congruence over time within the stable couples; within the separated couples, however, a strong decrease in congruence was detectable. |
| Keywords: | Assortative mating, Big Five, personality, congruence, personality change, partnership |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp585&r=age |