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on Economics of Ageing |
| By: | Niels Vermeer; Maarten van Rooij; Daniel van Vuuren |
| Abstract: | In this study we gauge the impact of social interactions on individual retirement preferences. A survey including self-assessments and vignette questions shows that individual preferences are affected by preferences and actual retirement behavior of the social environment. Retirement from paid work depends on the retirement age of relatives, friends, colleagues and acquaintances. Information and advice provided by the social environment play a role in the retirement decision. A majority of respondents would postpone retirement when their social environment retires later. A one year increase in the social environment's retirement age leads to an average increase of three months in the individual retirement age. In addition, people tend to stick more to the state pension age than to other retirement ages, which suggests a norm about retirement at the state pension age. |
| Keywords: | retirement decisions; social norms; sources of advice; state pension age |
| JEL: | J26 J14 Z13 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:426&r=age |
| By: | Bertoni, Marco (University of Padova); Brunello, Giorgio (University of Padova) |
| Abstract: | The "Retired Husband Syndrome", that affects the mental health of wives of retired men around the world, has been anecdotally documented but never formally investigated. We use Japanese micro data and the exogenous variation generated by the 2006 revision of the Japanese Elderly Employment Stabilization Law, which mandated employers to guarantee continuous employment between mandatory retirement age and full pension eligibility age, to estimate the causal effect of the husband's retirement on the wife's mental health. We find that adding one year to the time spent in retirement by Japanese husbands increases the probability that their wives develop the syndrome by 5.8 to 13.7 percentage points, depending on the empirical specification. We discuss mechanisms at work and argue that – ceteris paribus – increasing female labour force participation might exacerbate rather than attenuate the phenomenon. |
| Keywords: | retirement, pension reforms, couples, stress, depression, Japan |
| JEL: | D1 I1 I3 J14 J26 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8350&r=age |
| By: | Alfonso R. Sánchez; J. Ignacio García Pérez; Sergi Jiménez-Martín |
| Abstract: | In this paper, we explore the links between pension reform, early retirement, and the use of unemployment as an alternative pathway to retirement. We use a dynamic rational expectations model to analyze the search and retirement behaviour of employed and unemployed workers aged 50 or over. The model is calibrated to reproduce the main reemployment and retirement patterns observed between 2002 and 2008 in Spain. It is subsequently used to analyze the effects of the 2011 pension reform in Spain, characterized by two-year delays in both the early and the normal retirement ages. We find that this reform generates large increases in labour supply and sizable cuts in pension costs, but these are achieved at the expense of very large welfare losses, especially among unemployed workers. As an alternative, we propose leaving the early retirement age unchanged, but penalizing the minimum pension (reducing its generosity in parallel to the cuts imposed on individual pension benefits, and making it more actuarially fair with age). This alternative reform strikes a better balance between individual welfare and labour supply stimulus. |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2014-06&r=age |
| By: | Falilou Fall |
| Abstract: | This paper provides a framework for comparing a defined benefit (DB) and a defined contribution (DC) point schemes, which are both pay-as-you go (PAYG) financed. Two stylised PAYG pension schemes are modelled and simulated to compare their robustness to shocks. The same demographic developments (distribution of workers by age and revenue and distribution of survival rate by age) are applied to the two schemes. The impacts of different shocks (productivity, migration and longevity) on the two schemes are compared. Different policy reforms (increasing the contribution rate, diminishing the pension benefit, changing the up-rating and increasing the retirement age) to cope with the ageing shock are analysed and compared. Une comparaison de la robustesse des systèmes de retraite en répartition Ce document fournit un cadre pour comparer des systèmes de retraite en répartition à prestations définies et à cotisations définies. Deux régimes de retraite par répartition stylisés sont modélisés et simulés pour comparer leur robustesse aux chocs. Les mêmes évolutions démographiques (distribution des travailleurs selon l'âge et les revenus et des taux de survie par âge) sont appliquées aux deux régimes. Les impacts des différents chocs (productivité, migration et longévité) sur les deux systèmes sont comparés. Et, les différentes réformes (augmentation du taux de cotisation, diminution des prestations de retraite, changement du mode d’actualisation des salaires passés et augmentation de l'âge de la retraite) pour faire face au choc du vieillissement sont analysées et comparées. |
| Keywords: | sustainability, defined benefit, ageing, pension, defined contribution, pension modelling, pension system, vieillissement, retraite, contributions définies, modélisation de la retraite, prestation définie, durabilité |
| JEL: | C6 H55 H75 J32 |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1134-en&r=age |
| By: | Luis J. Carranza; Angel Melguizo; David Tuesta |
| Abstract: | . |
| Keywords: | defined contributions, matching contributions, pension coverage, pensions |
| JEL: | G23 H55 J32 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:1232&r=age |
| By: | Rik Dillingh (University of Tilburg, Ministry of Social Affairs and Employment, and Netspar); Henriette Prast (University of Tilburg, CentER, Netspar); Maria Cristina Rossi (University of Turin and CeRP-Collegio Carlo Alberto, CEPS/INSTEAD and Netspar); Maria Cesira Urzì Brancati (University of Modena and Reggio Emilia and CeRP-Collegio Carlo Alberto) |
| Abstract: | This paper presents the results from a survey on the attitudes toward reverse mortgages of homeowners aged 45 and over in the Netherlands. We find that there is substantial potential interest in reverse mortgages, especially for the purpose of being able to live more comfortably and not worry about money until death, or to be able to spend a large sum of money upon retirement on hobbies, home improvements or traveling. A similar study has been done for Italy, where results differ from those related to the Netherland. For Italian households a reverse mortgage is primarily seen as a last resort. We use two different frames for suggestions on the use of the loan – own consumption versus bequest - and find that the latter significantly raises interest in reverse mortgages of people with a bequest wish. We interpret this as evidence that people are unaware of the potential of reverse mortgages to optimize the timing of bequests. Women are less interested, while demand is highest among those around retirement age, depends positively on the ratio of housing wealth over income and on the perceived riskiness of future pensions, and negatively on the expected replacement ratio. We find a counterintuitive result for bequest timing, as people are more interested if the age difference with the oldest child is larger. |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:135&r=age |
| By: | Bishnu, Monisankar; Wang, Min |
| Abstract: | This paper characterizes an intergenerational welfare state with endogenous education and pension choice under general equilibrium-probabilistic voting. We show that politically implementing public education program always increases the future human capital, but this higher future human capital would not help support a more generous social security in the future. The effect of implementing PAYG social security on education however crucially depends on the sources of funding for education investment. Establishing PAYG pension program depresses investment in public education. However if the source of funding for education investment is private, in both the cases when pension is the only instrument or when public pension and public education are implemented together as a package, there can be an improvement in education investment if and only if the political influence of the old is limited and so the size of the PAYG social security is small. A substantially thick pension scheme which results from a heavy influence of the old in the political process spoils the mutual benefits. |
| Keywords: | education; Markov perfect equilibrium; Pension; Probabilistic voting; Endogenous growth |
| JEL: | D90 E6 H3 H52 H55 |
| Date: | 2014–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:37764&r=age |
| By: | Özdemir, Durmuş; Rosch, Angi |
| Abstract: | Annual population growth rate in Turkey is as high as 1.1 per cent, while many EU countries have shrinking, and hence ageing, populations. In this paper we consider an age-structured population that consists of female natives and Turkish immigrants into the EU. Immigrants’ fertility and mortality schedule may differ from that of EU natives, their children may adopt it. We apply a discrete-time Leslie-type model which allows for immigration and the study of its long-run effects. We examine the contribution of EU natives and Turkish immigrants to the EU population in terms of age-specific reproductive values which measure the value of one female of a given age as a seed for future population growth. Genealogies are derived in terms of the realisations of a corresponding Markov chain running backward in time. |
| Keywords: | Turkey and the EU; ageing populations; immigration; stochastic demography; stable populations; discrete-time Leslie-type model; age-specific reproductive values; Markov chain; genealogy |
| JEL: | J11 J15 |
| Date: | 2005–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55848&r=age |
| By: | Boon, Ling-Ni; Brière, Marie; Gresse, Carole; Werker, Bas J. M. |
| Abstract: | Using the most comprehensive publicly available data to-date, we study the effect of three aspects of pension regulation (namely quantitative investment restrictions, minimum return or benefit guarantee, and the type of supervising authority) on risk-adjusted funded pension performance in 27 countries. Regulatory strictness’ influence on the Sharpe ratio of investment return depends on a country’s level of economic development. In emerging market economies, existence of quantitative investment restrictions across asset classes adversely affects risk-adjusted returns. This impact is more severe if higher investment limits are imposed on equities and foreign assets, as opposed to on bonds. Having a minimum benefit or return guarantee, as well as having a specialized supervising authority has no statistically significant effect on the risk-adjusted returns regardless of economic development. |
| Keywords: | Régulation bancaire et financière; Fonds d'épargne-retraite; Funded pension; Pension regulation; |
| JEL: | G23 G28 H55 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/13629&r=age |
| By: | Melissa A. Boyle; Joanna N. Lahey |
| Abstract: | Measuring the overall impact of public health insurance receipt is important in an era of increased access to publicly-provided and subsidized insurance. Although government expansion of health insurance to older workers leads to labor supply reductions for recipients, there may be spillover effects on the labor supply of uncovered spouses. While theory predicts a decrease in overall household work hours, financial incentives such as credit constraints, target income levels, and the need for own health insurance suggest that spousal labor supply might increase. In contrast, complementarities of spousal leisure would predict a decrease in labor supply for both spouses. Utilizing a mid-1990s expansion of health insurance for U.S. veterans, we provide evidence on the effects of public insurance availability on the labor supply of spouses. Using data from the Current Population Survey and Health and Retirement Study, we employ a difference-in-differences strategy to compare the labor market behavior of the wives of older male veterans and non-veterans before and after the VA health benefits expansion. Our findings suggest that although household labor supply may decrease because of the income effect, wives’ labor supply increases, suggesting that financial incentives dominate complementarities of spousal leisure. This effect is strongest for wives with lower education levels and lower levels of household wealth. Moreover, wives with employer-provided health insurance in the previous year remain on the job while those without increase their hours, suggesting incentives to retain or obtain health insurance. Finally, non-working wives enter the labor force, those who were working part-time increase their hours, and full-time “career” women are largely unaffected. |
| JEL: | H42 I13 J14 J22 J26 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20371&r=age |
| By: | Cohen, Lee (Federal Reserve Bank of New York); Cornette, Marcia Millon (Federal Reserve Bank of New York); Mehran, Hamid (Federal Reserve Bank of New York); Tehranian, Hassan (Federal Reserve Bank of New York) |
| Abstract: | This study provides an empirical analysis of the impact of Wisconsin and Ohio pension cut legislation on values of banks operating in Wisconsin and Ohio, banks operating in other states in which pension cut legislation was being considered as Wisconsin and Ohio went through its legislative process, and all publicly traded U.S. banks. We find that banks doing business in Wisconsin and Ohio experience positive (negative) stock price reactions to announcements that indicate an increased (a decreased) probability of pension cut legislation. The stock price reactions are positively related to the extent to which banks operate in Wisconsin and Ohio. Stock price reactions are rarely evident for banks in the other thirteen states that were considering pension cut legislation during the period of analysis. We also find municipal bond spreads tighten and bank credit supply increases with pension cut legislation. Overall, the findings suggest states’ budget cuts affect bank values and credit supply through their municipal bond holdings. |
| Keywords: | financial institutions; municipal debt; public pensions |
| JEL: | G11 G21 H72 H75 |
| Date: | 2014–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:679&r=age |
| By: | William R. Cline (Peterson Institute for International Economics); Jared Nolan (Peterson Institute for International Economics) |
| Abstract: | This paper applies time series analysis to distinguish between cyclical and demographic causes of the decline of the labor force participation rate. Some public discussions suggest that the decline of US unemployment from its 2009 peak of 10 percent to about 6 percent by mid-2014 grossly exaggerates recovery because most of the decline reflects the exit of discouraged workers from the labor force. This study finds instead that one-half to two-thirds of the decline in labor force participation by about 3 percentage points from late 2007 to early 2014 is attributable to aging of the population. Although about one-third is found attributable to the lagged influence of high, and especially long-term, unemployment, going forward the potential rebound in the participation rate from recovery is projected to be approximately offset by further aging of the population. |
| Keywords: | labor force participation, aging, unemployment |
| JEL: | E52 J11 J21 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp14-4&r=age |