nep-age New Economics Papers
on Economics of Ageing
Issue of 2014‒01‒24
nine papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Early Retirement, Social Security, and Output Gap By Julian Diaz Saavedra
  2. Preventive health and active ageing: the elderly are not a burden By Aisa, Rosa; Larramona, Gemma; Pueyo, Fernando
  3. Old Age Pension Systems: A Theoretical Evaluation By Homburg, Stefan
  4. Physical Stature Decline and the Health Status of the Elderly Population in England By Alan Fernihough; Mark E. McGovern
  5. Aging and Real Estate Prices: Evidence from Japanese and US Regional Data By Saita, Yumi; Shimizu, Chihiro; Watanabe, Tsutomu
  6. Are we living longer but less healthy? Trends in mortality and morbidity in Catalonia (Spain), 1994-2011 By Aida Solé-Auró; Manuela Alcañiz
  7. The Efficiency of Unfunded Pension Schemes By Homburg, Stefan
  8. Subjective Health Status of the Older Population: Is It Related to Country-Specific Economic Development Measures? By Teresa García-Muñoz; Shoshana Neuman; Tzahi Neuman
  9. Unemployment and Mortality By Timothy Halliday

  1. By: Julian Diaz Saavedra (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: We analyze two social security reforms aimed at increasing working lifetimes. The rst reform elim- inates early retirement provisions, while the second increases both the age of early eligibility and the normal retirement age. We nd that although both reforms increase the participation rates of older workers, the elimination of early retirement provisions reduces future social security imbalances if ben- ets taken early are not reduced actuarially. Additionally, we nd that both reforms increase aggregate hours and output, although eciency gains derived from the elimination of the early retirement scheme are distant from previous estimates since labor supply could be less responsive. Finally, we also nd that the output gap brought about by the early retirement scheme may decrease in coming decades.
    Keywords: Computable general equilibrium, social security reforms, macroeconomic eects, retirement.
    JEL: C68 H55 J11 J26
    Date: 2014–01–09
  2. By: Aisa, Rosa; Larramona, Gemma; Pueyo, Fernando
    Abstract: Governments concerned with public finance are introducing reforms to push their citizens to remain in the labor market beyond the normal retirement age. We build a stylized theoretical framework in which we show that the labor supply among older workers and preventive health investment go hand in hand. In particular, those workers with the highest levels of productivity are those who remain longer in the labor market and, at the same time, who invest more in preventive health. We also find that a certain level of productivity in the health sector emerges as a prerequisite for active ageing. Furthermore, an increase in such productivity leads to growth in the effective labor supply, leading to an increase in demand for health care, while liberating additional resources for the non-health sectors.
    Keywords: Active ageing, preventive health
    JEL: I1 J2
    Date: 2013–12–15
  3. By: Homburg, Stefan
    Abstract: This is a postprint of a paper that was published 1997 in H. Giersch (Ed.) Reforming the Welfare State. Berlin: Springer-Verlag
    Keywords: Public Pensions, Overlapping Generations
    JEL: H21 H55
    Date: 2014–01
  4. By: Alan Fernihough (Institute for International Integration Studies, Trinity College Dublin); Mark E. McGovern (Harvard School of Public Health)
    Abstract: Few research papers in economics have examined the extent, causes or consequences of physical stature decline in aging populations. Using repeated observations on objectively measured data from the English Longitudinal Study of Ageing (ELSA), we document that reduction in height is an important phenomenon among respondents aged 50 and over. On average, physical stature decline occurs at an annual rate of between 0.08% and 0.10% for males, and 0.12% and 0.14% for females — which approximately translates into a 2cm to 4cm reduction in height over the life course. Since height is commonly used as a measure of long-run health, our results demonstrate that failing to take age-related height loss into account substantially overstates the health advantage of older birth cohorts relative to their younger counterparts. We also show that there is an absence of consistent predictors of physical stature decline at the individual level. However, we demonstrate how deteriorating health and reductions in height occur simultaneously. We document that declines in muscle mass and bone density are likely to be the mechanism through which these effects are operating. If this physical stature decline is determined by deteriorating health in adulthood, the coefficient on a measured height when used as an input in a typical empirical health production function will be affected by reverse causality. While our analysis details the inherent difficulties associated with measuring height in older populations, we do not find that significant bias arises in typical empirical health productionfunctions from the use of height which has not been adjusted for physical stature decline. Therefore, our results validate the use of height among the population aged over 50.
    Keywords: Height, Physical Stature Decline, Early Life Conditions, Health, Aging
  5. By: Saita, Yumi; Shimizu, Chihiro; Watanabe, Tsutomu
    Abstract: In this paper, we empirically investigate how real estate prices are affected by aging. We run regional panel regressions for Japan and the United States. Our regression results show that, both in Japan and the U.S., real estate prices in a region are inversely correlated with the old age dependency ratio, i.e. the ratio of population aged 65+ to population aged 20-64, in that region, and positively correlated with the total number of population in that region. The demographic factor had a greater impact on real estate prices in Japan than in the U.S. Based on the regression result for Japan and the population forecast made by a government agency, we estimate the demographic impact on Japanese real estate prices over the next 30 years. We find that it will be -2.4 percent per year in 2012-2040 while it was -3.7 percent per year in 1976-2010, suggesting that aging will continue to have downward pressure on land prices over the next 30 years, although the demographic impact will be slightly smaller than it was in 1976-2010 as the old age dependency ratio will not increase as much as it did before.
    Keywords: aging, dependency ratio, declining population, real estate prices
    JEL: G12 J11
    Date: 2013–12
  6. By: Aida Solé-Auró (Mortality, Health and Epidiemology Unit, Institut National d’Études Démographiques INED, Paris, France & Riskcenter, University of Barcelona, Barcelona, Spain); Manuela Alcañiz (Riskcenter, University of Barcelona, Barcelona, Spain)
    Abstract: Evidence on trends in prevalence of disease and disability can clarify whether countries are experiencing a compression or expansion of morbidity. An expansion of morbidity as indicated by disease have appeared in Europe and other developed regions. It is likely that better treatment, preventive measures and increases in education levels have contributed to the declines in mortality and increments in life expectancy. This paper examines whether there has been an expansion of morbidity in Catalonia (Spain). It uses trends in mortality and morbidity from major causes of death and links of these with survival to provide estimates of life expectancy with and without diseases and functioning loss. We use a repeated cross-sectional health survey carried out in 1994 and 2011 for measures of morbidity; mortality information comes from the Spanish National Statistics Institute. Our findings show that at age 65 the percentage of life with disease increased from 52% to 70% for men, and from 56% to 72% for women; the expectation of life unable to function increased from 24% to 30% for men and 40% to 47% for women between 1994 and 2011. These changes were attributable to increases in the prevalences of diseases and moderate functional limitation. Overall, we find an expansion of morbidity along the period. Increasing survival among people with diseases can lead to a higher prevalence of diseases in the older population. Higher prevalence of health problems can lead to greater pressure on the health care system and a growing burden of disease for individuals.
    Keywords: Healthy life expectancy, diseases, physical functioning, Spain
    Date: 2014–01
  7. By: Homburg, Stefan
    Abstract: This is a postprint of a paper that was published in the Journal of Institutional and Theoretical Economics 146, 1990, pp. 640-647
    Keywords: Public Pensions, Overlapping Generations
    JEL: H21 H55
    Date: 2014–01
  8. By: Teresa García-Muñoz; Shoshana Neuman (Bar-Ilan University); Tzahi Neuman
    Abstract: It is now common to use the individual's self-assessed-health-status (SAHS), which expresses her/his holistic 'internal' view, as a measure of health. The use of SAHS is supported by numerous studies that show that SAHS is a better predictor of mortality and morbidity than medical records. The 2011 wave of the rich Survey of Health Aging and Retirement Europe (SHARE) is used for the exploration of the full spectrum of factors behind the health-status in 16 European countries, using about 33 thousand observations. Special emphasis is given to the examination of development country measures and their correlation with aggregate country-levels of subjective-health. The empirical analysis includes 2 layers: (i) estimation of SAHS equations, using a large set of personal socio-economic characteristics as explanatory variables (controlling for country fixed-effects); and (ii) study of the correlations between average country SAHSs – controlled for differences in populations’ socio-economic characteristics – and objective country-specific aggregate macroeconomic development variables (logarithm of per-capita GDP; the Human Development Index; life expectancy at birth; per-capita expenditures on health; percentage of GDP spent on education; income inequality). The second part of the empirical examination (that borrows the technique used by Oswald and Wu, 2010) is novel and will lead to an answer to our core question: Is subjective-health affected by the country's economic development level? The main findings are: (i) the estimation of self-assessed-health-status regressions provides clear evidence of the effects of a large set of socio-economic variables on the individual’s subjective rating of her/his health status, beyond and above the obvious effects of health conditions; (ii) the second, more innovative, finding is related to the effects of country-specific economic development variables on the subjective-health of the residents, beyond and above those of the personal characteristics. Country dummy variables are added to the SAHS regression, to derive the country-specific aggregate SAHSs. These country dummies are then examined for correlations with a set of objective country economic development measures. It appears that the first five development measures (logarithm of per-capita GDP; the Human Development Index; life expectancy at birth; per-capita expenditures on health; percentage of GDP spent on education) are positively and significantly correlates with aggregate SAHSs, while Income Inequality does not correlate significantly with SAHS. It is therefore not only ‘who you are’ that affects the subjective rating of health, but also ‘in which country you live’. Those who live in more developed countries report higher levels of subjective-health (everything else being equal). Overall, our findings indicate that what is true for the individual is also true for the country as a whole: both individual and country-level development factors affect subjective-health and the two levels accumulate and reinforce the subjective-health assessment. This seems to be at odds with the ‘Easterlin Paradox’ that emphasizes within country individual effects and denies cross-country effects.
    Date: 2014–01
  9. By: Timothy Halliday (University of Hawaii Economic Research Organization)
    Abstract: We use micro-data to investigate the relationship between unemployment and mortality in the United States using Logistic regression on a sample of over 16,000 individuals. We consider baselines from 1984 to 1993 and investigate mortality up to ten years from the baseline. We show that poor local labor market conditions are associated with higher mortality risk for working-aged men and, specifically, that a one percentage point increase in the unemployment rate increases their probability of dying within one year of baseline by 6%. There is little to no such relationship for people with weaker labor force attachments such as women or the elderly. Our results contribute to a growing body of work that suggests that poor economic conditions pose health risks and illustrate an important contrast with studies based on aggregate data.
    JEL: I0 I12 J1
    Date: 2013–12

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