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on Economics of Ageing |
| By: | Sang-Wook (Stanley) Cho (School of Economics, Australian School of Business, the University of New South Wales); Renuka Sane (Indian Statistical Institute, Delhi) |
| Abstract: | We investigate whether households adjust retirement savings decisions in re-sponse to changes in the means-tested public pension plans. The policy in question lowered the taper rate of the assets test on the age pension in Australia in 2007. We use HILDA, a detailed micro panel data-set for Australian households and focus on the age group between 50 and 64 in 2006, prior to the reform. We compare savings behaviours of those who were constrained to increase financial wealth because of the assets test prior to the reform with those who were not constrained, and find that assets tests do have a perverse impact on saving. |
| Keywords: | means test, age pension, savings, portfolio choice |
| JEL: | H55 J14 J26 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2014-03&r=age |
| By: | Luc Behaghel; Didier Blanchet; Muriel Roger |
| Abstract: | We analyze the influence of health and financial incentives on the retirement behavior of older workers in France, building upon Stock and Wise (1990) option value approach. The model accounts for three main retirement routes: the normal retirement, disability insurance (DI) and unemployment/preretirement pathways, and is estimated with a combination of microeconomic datasets that include the French data of the European SHARE survey. The estimates confirm that a decrease in the generosity of the pension and DI schemes induces people to stay longer in the labor market, and that people with better health tend to retire later. We present extreme situations simulating what individual's retirement behavior would have been if only one retirement route had existed and in the absence of constraints on work capabilities. We show that average years of work between 55 and 64 are nearly 14% greater when regular retirement incentives are applied to the whole population than when it is DI rules that are systematically applied. |
| JEL: | H55 J14 J26 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20030&r=age |
| By: | Alain Jousten; Mathieu Lefebvre; Sergio Perelman |
| Abstract: | Many Belgian retire well before the statutory retirement age. Numerous exit routes from the labor force can be identified: old-age pensions, conventional early retirement, disability insurance, and unemployment insurance are the most prominent ones. We analyze the retirement decision of Belgian workers adopting an option value framework, and pay special attention to the role of health status. We estimate probit models of retirement using data from SHARE. The results show that health and incentives matter in the decision to exit from the labor market. Based on these results, we simulate the effect of potential reforms on retirement. |
| JEL: | H55 J21 J26 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20035&r=age |
| By: | Jean-Olivier Hairault (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne); François Langot (IZA - Institute for the Study of Labor, GAINS-TEPP - Université du Maine, CEPREMAP - Centre pour la recherche économique et ses applications); Thepthida Sopraseuth (CEPREMAP - Centre pour la recherche économique et ses applications, THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise) |
| Abstract: | Since the last recession, it is usually argued that older workers are less affected by the economic downturn because their unemployment rate rose less than the one of prime-age workers. This view is a myth: older workers are more sensitive to the business cycle. We document volatilities of worker flows and hourly wage across age groups on CPS data. We find that old worker's job flows are characterized by a higher responsiveness to business cycles than their younger counterparts. In contrast, their wage cyclicality is lower than prime-age workers'. Beyond this empirical contribution, we show that a life-cycle Mortensen & Pissarides (1994) model is well suited to explain these facts: older workers' shorter work-life expectancy endogenously reduces their outside options and leads their wages to be less sensitive to the business cycle. Thus, in a market where wage adjustments are small, quantities vary a lot: this is the case for older workers, whereas the youngest behave like infinitively-lived agents. Our theoretical results point out that Shimer (2005)'s view on the MP model is consistent with prime-age workers' labor market while aging endogenously introduces real wage rigidities, allowing to match what we observe for old workers, without specific assumptions as in Hagendorn & Manovskii (2008). |
| Keywords: | search ; matching ; business cycle ; life-cycle |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00972291&r=age |
| By: | Takayama, Noriyuki |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:cisdps:623&r=age |
| By: | Tetsuo Ono (Graduate School of Economics, Osaka University) |
| Abstract: | This paper presents an overlapping-generation model featuring probabilistic vot- ing over two policy issues, namely, pension and public goods. To capture the forward-looking behavior of voters, we characterize a Markov-perfect political equi- librium in which the two policy variables are conditioned on a payoff-relevant state variable, that is, capital. It is shown that (i) as the population ages, the pension- to-GDP ratio and the growth rate of capital increase, but the public goods-to-GDP ratio decreases and (ii) the pension-to-GDP and public goods-to-GDP ratios are too high and the growth rate too low from the standpoint of social welfare. |
| Keywords: | Economic Growth; Population Aging; Probabilistic Voting; Public Pension; Public Goods Provision |
| JEL: | D70 E24 H55 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1417&r=age |
| By: | Flores, Miguel; Bradshaw, Benjamin; Hoque, Nazrul |
| Abstract: | The purpose of this study is to provide life expectancy estimates at birth for states and aggregates of municipalities by population size within regions of Mexico. A regression-based technique is used to estimate life expectancy for these populations from 1990 to 2000. Our findings suggest that the greatest increase in life expectancy among population size groups occurred in “extended-rural” municipalities (those with a population of 2,500 to 14,999) with an average of 7 years. The capital region showed the highest increase in life expectancy among all the regions, with considerable increases in extended-rural municipalities. Our estimates are consistent with expectations with respect to urban advantages in life expectancy, which probably reflect the concentration of public health services, as well as primary, secondary and tertiary medical care. This analysis may be useful in evaluating the public health policies of the Mexican authorities that have focused on diminishing health inequalities between well and poorly served populations. In general, the life expectancies prepared by the regression method are quite close to those prepared from age-specific mortality rates, and our results show the utility of this shortcut method compared with life expectancies estimated from complete sets of age-specific mortality rates. |
| Keywords: | Health disparities, mortality rates, life expectancy, Mexican municipalities |
| JEL: | I19 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55212&r=age |
| By: | T. Gudaitis; A. Fiori Maccioni |
| Abstract: | The 2013 pension reform in Lithuania forced workers to choose their level of participation to the second pillar system. Three options were given - a lower contribution rate, a higher contribution rate with governmental subsidy, and to exit from the second pillar system. The aim of this article is to evaluate the best rational choice for individuals of different gender and age, depending on the expected financial returns of their second pillar accounts. Results reveal that the participation in the second pillar system is always more convenient than the abandonment, even under the conservative hypothesis of zero real rate of return. Because of the governmental subsidy, the higher contribution rate can be the best choice for young and middle-aged workers, and its convenience increases with higher expected returns. |
| Keywords: | second pillar, rational choice, private pension funds, Lithuanian pension system |
| JEL: | J11 H75 H55 C02 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201402&r=age |
| By: | Bruno Amable (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne, CEPREMAP - Centre pour la recherche économique et ses applications, IUF - Institut Universitaire de France - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique); Baptiste Françon (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne) |
| Abstract: | In this paper, we investigate the microeconomic effects of one major feature of the German Hartz Reforms (2003-2005), namely the reduction in compensation duration for older unemployed above 45 years of age. We look at two potential effects of this measure: on job take-up rates, but also on post-unemployment outcomes, through various indicators of matching quality (job stability, skill adequacy) and job quality (type of job contract). Applying difference-in-differences estimators, we show that the effects of this specific feature were rather scant. Regarding unemployment duration, only unemployed within a specific age group (55 to 59 years old) were affected by the reform. Evidence suggests that this is because they previously used unemployment schemes as a bridge to early retirement. In addition, there is some evidence of detrimental effects on job or matching quality. |
| Keywords: | Unemployment benefits; unemployment duration; job matching; job quality; early retirement; difference-in-differences |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00973884&r=age |
| By: | Alicia H. Munnell; Dina Bleckman |
| Abstract: | The brief’s key findings are: Commentators question whether pension coverage is a serious problem, indicating that 80 percent have access to a plan. But this number refers to access – not participation – and to full-time workers in both the public and private sectors. A review of four household surveys and one employer survey finds that only about half of all private workers (age 25-64) are participating in a plan. So, yes, coverage remains a serious problem. |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2014-7&r=age |
| By: | Raphael Desmet; Nicole Fasquelle; Christophe Joyeux; Saskia Weemaes |
| Abstract: | This Working Paper studies the financial and social sustainability of the Belgian social protection system. The results of this publication were presented at the 20st Congrès des économistes belges de langue française and published in the conference proceedings. Assuming no policy changes and against the background of population ageing, the long-term public finance projections highlight an important budgetary challenge. In that framework, this paper examines a number of pathways based on the three pillars of the European strategy as determined during the 2001 Stockholm summit. The budgetary strategy (pillar 1) of the Belgian stability programme in itself does not guarantee the long-term sustainability of public finance and should, therefore, be completed by reforms in support of economic growth (through employment or productivity, pillar 2) or reforms of the pension schemes (as part of pillar 3). The social consequences of the reforms which alter the generosity of the pension schemes should not be overlooked. |
| JEL: | E6 H53 H55 H6 J1 J2 |
| Date: | 2013–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:fpb:wpaper:1315&r=age |
| By: | Thomas Crossley (Institute for Fiscal Studies and University of Essex); Jochem de Bresser; Liam Delaney; Joachim Winter (Institute for Fiscal Studies and Ludwig-Maximilians-Universität München) |
| Abstract: | Much empirical research in economics is based on data from household surveys. Panel surveys are particularly valuable for understanding dynamics and heterogeneity. A possible concern with panel surveys is that survey participation itself may alter subsequent behavior. We provide novel evidence of survey effects on a central life-cycle choice: household saving. We exploit randomized assignment to survey modules within the LISS Panel, an internet panel survey which is representative of the Dutch population. We find that households that respond to detailed questions on expenditures and needs in retirement reduced their non-housing saving rate by 3.5 percentage points, on average. This mean effect is driven by high-education households which have the highest pension and housing wealth. Our saving measure is based on linked administrative wealth data. Thus we can rule out the possibility that the effect is on reporting, rather than on the underlying saving behavior. One interpretation is that the survey acted as a salience shock, possibly with respect to reduced housing costs in retirement. |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:14/06&r=age |
| By: | Sherry A. Glied |
| Abstract: | Doctors and hospitals in the United States serve patients covered by many types of insurance. This overlap in the supply of health care services means that changes in the prices paid or the volume of services demanded by one group of patients may affect other patient groups. This paper examines how marginal shifts in the demand for services among the adult population under 65 (specifically, factors that affect the uninsurance rate) affect use in the Medicare population. I provide a simple theoretical framework for understanding how changes in the demand for care among adults under 65 may affect Medicare spending. I then examine how two demand factors–recent coverage eligibility changes for parents and the firm size composition of employment–affect insurance coverage among adults under 65 and how these factors affect per beneficiary Medicare spending. Factors that contribute to reductions in uninsurance rates are associated with contemporaneous decreases in per beneficiary Medicare spending, particularly in high variation Medicare services. Reductions in the demand for medical services among adults below age 65 are not associated with reductions in the total quantity of physician services supplied. The increased Medicare utilization that accompanies lower demand among those under 65 has few, if any, benefits for Medicare patients. |
| JEL: | I1 I11 I13 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20045&r=age |
| By: | Frédéric Gonand; Pierre-André Jouvet |
| Abstract: | The demographic structure of a country influences economic activity. The "second dividend" modifies growth. Accordingly, in general equilibrium, the second dividend and the demographic structure are interrelated. This paper aims at assessing empirically the "second dividend" in a dynamic, empirical and intertemporal setting that allows for measuring its impact on growth, its intergenerational redistributive effects, and its interaction with the demographic structure. The article uses a general equilibrium model with overlapping generations, an energy module and a public finance module. Policy scenarios compare the consequences of recycling a carbon tax through lower proportional income tax rather than higher public lumpsum expenditures. They are computed for two countries with different demographics (France and Germany). Results suggest that the magnitude of the "second dividend" is significantly related with the demographic structure. The more concentrated the demographic structure on cohorts with higher income and saving rate, the stronger the effect on capital supply of the second dividend. The second dividend weighs on the welfare of relatively aged working cohorts. It fosters the wellbeing of young working cohorts and of future generations. The more concentrated the demographic structure on aged working cohorts, the higher the intergenerational redistributive effects of the second dividend. |
| Keywords: | Energy transition, intergenerational redistribution, overlapping generations, double dividend, general equilibrium |
| JEL: | D58 D63 E62 L7 Q28 Q43 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:1405&r=age |
| By: | Serge Volkoff (CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé); Anne- Françoise Molinié (CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé) |
| Abstract: | En 2000, le Conseil européen avait fixé un taux d'emploi moyen de 50 % pour les 55-64 ans à l'horizon 2010. Dix ans après, ce niveau n'est pas atteint, mais l'emploi des " seniors " progresse dans les pays d'Europe. Ce constat et la poursuite probable de cette tendance incitent à s'intéresser à la " soutenabilité " du travail dans les dernières années de la vie professionnelle. Ainsi, l'enquête européenne de 2010 sur les conditions de travail ne fait pas apparaître, pour les plus de 55 ans, de mise à l'abri vis-à-vis de la pénibilité physique ; c'est surtout l'inadaptation des horaires à la vie hors travail qui semble moins ressentie par les seniors que par les plus jeunes. La déclaration de troubles de la santé croît avec l'âge et de nombreux aspects de la vie au travail semblent contribuer, chez les seniors, à un mauvais état de santé déclaré, ainsi qu'au sentiment qu'ils ne pourront pas poursuivre la même activité professionnelle à 60 ans. Un tel sentiment doit nécessairement être pris en compte dans la mise en œuvre des politiques publiques de l'emploi mais aussi du travail. |
| Keywords: | emploi des seniors;fins de vie professionnelle et retraite; conditions de travail; qualité de vie au travail |
| Date: | 2013–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00974502&r=age |