nep-age New Economics Papers
on Economics of Ageing
Issue of 2014‒06‒22
five papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Understanding the effect of retirement on health using Regression Discontinuity Design By Eibich, P.;
  2. Non-contributory pensions By Rosangela Bando; Paul Gertler; Sebastián Galiani
  3. Technical progress, retraining cost and early retirement By Lorenzo Burlon; Montserrat Vilalta-Bufí
  4. Future Labour Force Dynamics up to 2030 Accounting for Trends in Educational Attainment and Recent Pension Law Reforms By Thomas Horvath; Helmut Mahringer
  5. Impacts of Immigration on Aging Welfare-State An Applied General Equilibrium Model for France By Xavier Chojnicki; Lionel Ragot

  1. By: Eibich, P.;
    Abstract: This paper estimates the causal effect of retirement on health, health behavior, and healthcare utilization. Using Regression Discontinuity Design to exploit financial incentives in the German pension system for identification, I investigate a wide range of health behaviors (e.g. alcohol and tobacco consumption, physical activity, diet and sleep) as potential mechanisms. The results show a long-run improvement in health upon retirement. Relief from work-related stress, increased sleep duration and more frequent physical exercise seem to be key mechanisms through which retirement affects health. Moreover, the improvement in health caused by retirement leads to a reduction in healthcare utilization.
    Keywords: retirement; health; regression dicontinuity design; health behavior; healthcare;
    JEL: I12 J14 J26
    Date: 2014–06
  2. By: Rosangela Bando; Paul Gertler; Sebastián Galiani
    Abstract: The creation of non-contributory pension schemes is becoming increasingly common as countries struggle to reduce poverty. Drawing on data from Mexico's Adultos Mayores Program (Older Adults Program) --a cash transfer scheme aimed at rural adults over 70 years of age-- we evaluate the effects of this program on the well-being of the beneficiary population. Exploiting a quasi-experimental design whereby the program relies on exogenous geographical and age cutoffs to identify its target group, we find that the mental health of elderly adults in the program is significantly improved, as their score on the Geriatric Depression Scale decreases by 12%. We also find that the proportion of treated individuals doing paid work is reduced by 20%, with most of these people switching from their former activities to work in family businesses; treated households show higher levels of consumption expenditures (on average, an increase of 23%). Very importantly, we also rule out significant anticipation effects that might have been associated with the program transfers. Thus, overall, we find that non-contributory pension schemes target to the poor in developing countries can improve the well-being of poor older adults without having any indirect impact (through potential anticipation effects) on the earnings or savings of future program participants.
    Keywords: Poverty, Pension funds, Social Security, Income, Consumption & Saving, mental health, non-contributory pensions, poverty, mental health, well-being
    Date: 2014–06
  3. By: Lorenzo Burlon (Bank of Italy); Montserrat Vilalta-Bufí (University of Barcelona)
    Abstract: Technological progress affects early retirement in two opposing ways. On the one hand, it increases real wages and thus produces an incentive to postpone retirement. On the other hand, it erodes workers' skills, making early retirement more likely. Using the Health and Retirement Study surveys, we re-examine the effect of technical progress on early retirement, finding that when the technical change is small the erosion effect dominates, but when it is large the wage effect dominates. Our results imply that retraining cost is a strongly concave function with respect to technical progress.
    Keywords: technical progress, retraining, retirement
    JEL: J24 J26 O33
    Date: 2014–06
  4. By: Thomas Horvath (WIFO); Helmut Mahringer (WIFO)
    Abstract: The Austrian population will continue to grow over the next decades. At the same time the number of working age people is predicted to decline until 2030. In how far this demographic change will translate into changes in the total number of people in the labour force (employed plus unemployed people) depends mainly on their labour market attachment. This paper analyses the development of labour force participation rates explicitly accounting for changes in the education structure, long-term trends in participation rates and recent tightenings in pension law. These factors are shown to affect labour force participation rates markedly. A reduction in the total number of people in the workforce until 2030 seems unlikely when accounting for these facts.
    Keywords: Arbeitskräfteangebot, Demographie, Bildung, Pensionsreform
    Date: 2014–06–10
  5. By: Xavier Chojnicki; Lionel Ragot
    Abstract: Immigration is often seen as an instrument of adaptation for aging countries. In this paper, we evaluate, using a dynamic general equilibrium model, the contribution of migration policy in reducing the tax burden associated with the aging population in France. Four variants, compared to a baseline scenario based on oficial projections, are simulated with the aim to quantify the immigration effects on the French social protection finances. The first variant assesses the economic effects of immigration in France as projected into official forecasts. The three other variants are built on the same more ambitious annual flows of immigrants (corresponding to net migration that have characterized the second great wave of immigration in France in the twentieth century). These three variants only distinguish in terms of the skill structure of new migrants. We show that the age and skill structure of immigrants are the key feature that mainly determine the effects on social protection finances. Overall, these effcts are all the more positive in the short-medium term that the migration policy is selective (in favor of more skilled workers). In the long term, beneficial effects of a selective policy may disappear. But the financial gains from more consequent migration flows are relatively moderated in comparison of demographic changes implied.
    Keywords: Migration, AGEM, Overlapping generations, Aging, Public finance, Social protection.
    JEL: C68 D58 E60 H55 H68 J61
    Date: 2014

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