nep-age New Economics Papers
on Economics of Ageing
Issue of 2014‒08‒28
four papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. What old stagers could teach us: Examining age complementarities in regional innovation systems By Arntz, Melanie; Gregory, Terry
  2. Private Pensions, Retirement Wealth and Lifetime Earnings By Jie Zhou; James MacGee
  3. Inequality of Opportunity in Retirement Age – The Role of Physical Job Demands By Matthias Giesecke; Sarah Okoampah
  4. Job Lock: Evidence from a Regression Discontinuity Design By Fairlie, Robert

  1. By: Arntz, Melanie; Gregory, Terry
    Abstract: Concerns have been raised that demographic ageing may weaken the competitiveness of knowledge-based economies and increase regional disparities. The age-creativity link is however far from clear at the aggregate level. Contributing to this debate, we estimate the causal effect of the workforce age structure on patenting activities for local labour markets in Germany using a flexible knowledge production function and accounting for potential endogeneity of the regional workforce structure. Overall, our results suggest that younger workers boost regional innovations, but this effect partly hinges on the presence of older workers as younger and older workers turn out to be complements in the production of knowledge. With demographic aging mainly increasing the older workforce and shrinking the younger one, our results imply that innovation levels in ageing societies may drop in the future. Moreover, differences in the regional age structure currently explain around a sixth of the innovation gap across German regions. --
    Keywords: regional innovation system,demographic ageing,knowledge production function,regional disparities,age complementarities
    JEL: R12 R23 J11
    Date: 2014
  2. By: Jie Zhou (Bank of Canada); James MacGee (UWO)
    Abstract: This paper investigates the effect of private pensions on the retirement wealth distribution. We incorporate stochastic private pension coverage into a calibrated life-cycle model with stochastic earnings. Private pensions lead to higher net worth inequality at retirement, which is closer to the inequality observed in the PSID than a model without private pensions. However, the offset effect of private pension wealth on net worth is much larger in the model than in the data. We find that taxation and inflation can largely account for the difference.
    Date: 2014
  3. By: Matthias Giesecke; Sarah Okoampah
    Abstract: We quantify differences in the retirement age between manual and non-manual workers and evaluate these differences in the context of the literature on equality of opportunity. The focus is on the question how individual background during childhood transmits through physical demands of occupations on retirement ages. Individual retrospective data from the German Socio-Economic Panel are used to analyse labour force dynamics over the years 1984 to 2011. Discrete time duration models suggest that retirement ages differ substantially between manual and non-manual workers. To elaborate how such differences are explained by individual background characteristics on the one hand and eff ort and luck on the other hand, we make use of tests for stochastic dominance and a Blinder-Oaxaca decomposition. The result is that individual background characteristics explain a share of about one third of inequality in retirement ages as transmitted through physical demands of occupations.
    Keywords: Retirement age; inequality of opportunity; physical job demands; blinderoaxaca-decomposition
    JEL: D63 J26 J62 C14
    Date: 2014–06
  4. By: Fairlie, Robert
    Abstract: Employer-provided health insurance may restrict job mobility, resulting in “job lock.â€Â  Previous research on job lock finds mixed results using several methodologies. We take a new approach to examine job-lock by exploiting the discontinuity created at age 65 through the qualification for Medicare. Using a novel procedure for identifying age in months from matched monthly CPS data and a relatively unexplored administration measure of job mobility, we compare job mobility among male workers in the months just prior to turning age 65 to job mobility in the months just after turning age 65. We find no evidence that job mobility increases at the age 65 threshold when Medicare eligibility starts. We also do not find evidence that other factors such as retirement, reduction in hours worked, social security eligibility, pension eligibility, and sample changes confound the results on job mobility in the month individuals turn 65.
    Keywords: Social and Behavioral Sciences, Job lock; health insurance; Medicare
    Date: 2014–08–15

This nep-age issue is ©2014 by Claudia Villosio. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.