nep-age New Economics Papers
on Economics of Ageing
Issue of 2014‒05‒04
eleven papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Fertility decisions and pension reforms. Evidence from natural experiments in Italy By Francesco C. Billari; Vincenzo Galasso
  2. Projections of Ageing Migrant populations in France: 2008-2028 By Jean-Louis Rallu
  3. Can formal home care reduce the burden of informal care for elderly dependents? Evidence from France. By Goltz, Andreas; Arnault, Louis
  4. Why Don't Lower-Income Individuals Have Pensions? By April Yanyuan Wu; Matthew S. Rutledge; Jacob Penglase
  5. How to Improve Israel's Health-care System By Philip Hemmings
  6. Unemployment and Mortality: Evidence from the PSID By Timothy Halliday
  7. Economias de Escala e Escopo na Previdência Complementar Fechada Brasileira By Marcelo Abi-Ramia Caetano
  8. The "Second Dividend" and the Demographic Structure By Jouvet, Pierre-André; Gonand, Frédéric
  9. The Graying of Academia Will It Reduce Scientific Productivity? By Wolfgang Stroebe
  10. Formal and Informal Social Protection in Iraq By Johnson, Hillary; El Mekkaoui de Freitas, Najat
  11. Did the Intergenerational Solidarity Pact increase the employment rate of the elderly in Belgium? A macro-econometric evaluation By Catherine SMITH

  1. By: Francesco C. Billari (Department of Sociology and Nuffield College, University of Oxford); Vincenzo Galasso (CEPRA, IGIER, Università Bocconi and CEPR)
    Abstract: The emergence of old-age social security has been linked to general fertility decline, and in recent years pension reforms have emerged as a response to the challenges of population ageing, in turn partially a consequence of fertility decline. Understanding the link between social security and low fertility is therefore very important. In this paper we analyse the link between fertility and social security in a novel way. We exploit a series of pension reforms that were implemented in Italy, one of the first ‘lowest-low’ fertility societies, during the 1990s, to test the effect of expected retirement income on fertility. The design of the reforms, which introduced a discontinuity depending on the numbers of years of contributions, allows considering them as a natural experiment. We analyse fertility data reconstructed from a series of surveys from the Bank of Italy and show that couples in which the husband was affected by the reform, therefore facing a lower pension, had subsequently higher fertility.
    Keywords: old-age security, quantity-quality trade-off, public pension systems, fertility, altruism
    JEL: H55 J13 D64
    Date: 2014–04–18
  2. By: Jean-Louis Rallu (INED)
    Abstract: As migrant populations are ageing, migration is becoming less a factor of demographic rejuvenation than in the past. Ageing migrant projections provide data for social and health services that will have to serve linguitiscally and culturally diverse populations. Although migrants tend to return less than they planned, return migration is the main component of old age migration, but migrants will engage more and more in back and forth moves in the future, due to easier and cheaper travel. Old age immigration is also significant, mostly for females: late family reunification, zero generation (migrants' parents coming to help in child care), etc. These flows will tend to rebalance the sex ratios of migrants - who were mostly males - from labour sending countries. However, the main determinant of migrant ageing is the shape of their age pyramids that vary according to origin, following migration history: pre- and post-independence migration, economic booms and crisis. Migration policies, like the closed border policy following the first oil shock in 1974 and subsequent family reunification will also impact on trends in migrant ageing.
    Date: 2014
  3. By: Goltz, Andreas; Arnault, Louis
    Abstract: This paper focuses on the trade-off between formal and informal care for elderly dependents living at home in France. Using the French 2008 household Disability - Healthcare data and a newly built indicator of formal home-care prices in each French Council District, we wonder if fi nancial incentives to use more formal home care could relieve informal caregivers. We estimate a bivariate Tobit model to account for both the censor and the endogeneity of our formal home-care variable. Our results con firm that the volume of informal care provided would decrease if the elderly dependents were faced with lower formal home-care prices. Moreover, informal caregivers are shown to be much more sensitive to public subsidizes for skilled formal home care than for the low-skilled one. Subsidizing for skilled formal home care would make informal caregivers more effcient to perform lighter low-skilled tasks. Eventually, acting on formal home care prices could help French public administrators sustain the well-being of both care receivers and informal caregivers.
    Keywords: Long-term Care; Informal Care; Formal Care; Elderly;
    JEL: C34 I12 J14
    Date: 2014
  4. By: April Yanyuan Wu; Matthew S. Rutledge; Jacob Penglase
    Abstract: The brief’s key findings are: Obtaining an employer pension involves four steps: 1) having a job; 2) working for a firm with a plan; 3) being eligible for the plan; and 4) taking up the plan. For lower-income individuals, the weakest links in this chain are a lack of employment and employment with firms that do not offer a plan. Take-up rates are less of a factor, but will become increasingly important as voluntary 401(k)s continue to replace mandatory defined benefit plans. The most effective policy solution for boosting pension participation would be to provide all workers with access to a plan and automatically enroll them.
    Date: 2014–04
  5. By: Philip Hemmings
    Abstract: Israelis enjoy higher life expectancy and have a much younger demographic profile than most OECD countries. However, the demand for health care is expanding rapidly due to population growth and ageing. Also, the country’s wide socio-economic divides are reflected in differences in health outcomes. To date the health-care system, centred on four health funds, is widely acknowledged as providing a basket of universal services, with good quality primary and secondary care, while also accommodating demand for private health care. However, there are challenges and tensions in the system. Currently the authorities are having to rapidly expand the number of places in medical schools and nurse training because large cohorts of health-care professionals are heading for retirement. More broadly, there are concerns that the core notion of a universal basket of services is being eroded by co-payments and the increasing demand for the additional services and options provided by private insurance. Although the quality of care is generally good, in hospital care there is room to improve data and concern that overcrowding may become chronic. This Working Paper relates to the 2013 OECD Economic Review of Israel ( israel.htm). Comment améliorer le système de santé d'Israël Israël se singularise par une espérance de vie plus élevée et une structure démographique nettement plus jeune que la plupart des autres pays de l’OCDE. Néanmoins, la demande de soins de santé augmente rapidement en raison de l’accroissement et du vieillissement de la population. Par ailleurs, les larges fractures socioéconomiques qui caractérisent le pays se traduisent par des disparités sur le plan de la santé. Pour l’heure, le système de santé, qui s’articule autour de quatre organismes d’assurance maladie, offre un ensemble de services universels, recouvrant des soins primaires et secondaires dont la qualité est largement reconnue, tout en satisfaisant la demande de soins de santé privés. Néanmoins, ce système est en proie à des difficultés et des tensions. Aujourd’hui, les autorités doivent rapidement accroître le nombre de places offertes dans les facultés de médecine et les formations aux soins infirmiers, car des cohortes nombreuses de professionnels de la santé se préparent à prendre leur retraite. De manière plus générale, certains craignent que le principe fondamental d’universalité des soins correspondant à un ensemble de services ne soit en train d’être remis en cause par le système de participation aux frais médicaux, et par la demande croissante de services et options supplémentaires offerts par des assurances privés. Bien que les soins soient globalement de bonne qualité, il serait possible d’améliorer les données concernant les soins dispensés dans les hôpitaux et certains craignent que leur surpeuplement ne devienne chronique. Ce Document de travail se rapporte à l’Étude économique de l’OCDE d’Israël 2013 ( 2013.htm).
    Keywords: health care, Israel, life expectancy, nurses, doctors, primary care, physicians, preventative care, hospitals, hôpitaux, infirmières, soins préventifs, médecins, Israël, soins de santé, soins primaires, espérance de vie
    JEL: H75 I11 I13 I14 I18
    Date: 2014–04–14
  6. By: Timothy Halliday (Department of Economics, University of Hawaii at Manoa)
    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.
    Keywords: Recessions, Mortality, Health, Aggregation, Unemployment
    JEL: I0 I12 J1
    Date: 2014–04
  7. By: Marcelo Abi-Ramia Caetano
    Abstract: O objetivo deste texto é identificar a existência de economias de escala e escopo na previdência complementar fechada brasileira por meio da realização de um conjunto de testes quantitativos. Como forma de melhor estruturar os fundamentos teóricose empíricos, serão apresentados a revisão da literatura internacional sobre o tema, a estrutura geral da previdência complementar fechada brasileira, estatísticas descritivas da base de dados usada no trabalho, um modelo teórico para existência de economias de escala em previdência complementar, os métodos quantitativos aplicados, seus respectivos resultados e uma seção com implicações normativas. This work identifies the existence of economies of scale and scope for the Brazilian complementary pension funds via quantitative tests on the administrative data base. It will be presented the literature review, descriptive statistics of the data base; a theoretical model on the existence of economies of scale in complementary pensions, the quantitative methods used, its results and the normative implications. Econometric results show that economies of scale on Brazilian complementary pensions are stronger than in the rest of the world.
    Date: 2014–04
  8. By: Jouvet, Pierre-André; Gonand, Frédéric
    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 lowe r 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 demog raphic 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: 2014–04
  9. By: Wolfgang Stroebe
    Abstract: The belief that science is a young person’s game and that only young scientists can be productive and publish highquality research is still widely shared by university administrators and members of the scientific community. Since the average age of university faculties is increasing not only in the United States but also in Europe, the question arises as to whether this belief is correct. If it were valid, the abolition of compulsory retirement in the United States and some parts of Canada would lower the productivity of these university systems. To address this question, this article reviews research on the association of age and scientific productivity conducted during the last four decades in North America and Europe. Whereas early research typically showed a decline in productivity after the ages of 40 to 45 years, this decline has been absent in more recent studies. Explanations for this change are discussed.
    Keywords: academic productivity; scientific achievement; age discrimination; creative potential
    Date: 2014–03
  10. By: Johnson, Hillary; El Mekkaoui de Freitas, Najat
    Abstract: We study formal and informal insurance in Iraq using empirical data from a household survey. We study access to social security, health insurance, and retirement. Then, we examine the types of risks that Iraqi households face, and the informal coping mechanisms they use to deal with them. After studying formal and informal social protection separately, we study the relationship between the two and test the hypothesis of crowding out. We find that socio-­demographic characteristics affect formal insurance detention, the probability of a risk occurring, and the type of risk coping mechanism that a household uses. The most important determinant of receiving formal benefits is the sector of employment: public sector workers are between 83% and 84% more likely than private sector workers to have formal benefits. Poverty, the type of employment, the place of residence, the size of the household, the gender of the household head, and the education of the household impact the probability with which a household is affected by different types of risks. These socio -­‐ demographic characteristics along with the type of risk that the household faced influence the household’s choice of risk coping mechanism. We find evidence of crowding out; however, we conclude that this should not translate to a reduction in formal safety nets. Our results have many policy implications to improve access to formal insurance, reduce risks, and mitigate the negative aspects of certain informal coping mechanisms in Iraq .
    Keywords: Iraq; Social protection; formal and informal insurance; risk coping mechanisms;
    JEL: O53 O17 I38 D10 D81
    Date: 2013–09
  11. By: Catherine SMITH (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: In December 2005, the Belgian government adopted the law on the Intergenerational Solidarity Pact (ISP) with the objective to increase the employment rate of the elderly. In order to meet that objective, several active ageing policies and reforms were taken. The aim of this paper is to investigate the overall effectiveness of the ISP in rising the elderly employment rate by gender. Two methods are used. Both rely on a macro-econometric model which explains the evolution of the elderly employment rate by the economic conditions. The first method uses forecasts of the macro-econometric model as an indicator of the value the employment rate would have taken in the absence of the policies. The second method tests for the presence of structural breaks after the introduction of the main policies of the ISP. The results of the first method suggest a positive impact of the policies on elderly employment rate which is slightly larger for men, and a negative impact on younger men's employment rate, suggesting a substitution effect. These effects are however too small to be statistically significant. Using the second method, no structural break is found.
    JEL: J21 J26 H53 E32
    Date: 2014–04–09

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