nep-age New Economics Papers
on Economics of Ageing
Issue of 2014‒12‒08
twelve papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Life satisfaction and influencing factors of the elderly population in rural China By Ding, Ya
  2. New Policies for an Older Unemployed Population By Joelle Saad-Lessler; Teresa Ghilarducci
  3. Housing Equity Withdrawal in Mid-To-Late Life: Patterns and Motivations Amongst Australian Home Owners By Rachel Ong; Gavin Wood; Siobhan Austen; Therese Jefferson; Marietta E.A. Haffner
  4. The War on Poverty's Experiment in Public Medicine: Community Health Centers and the Mortality of Older Americans By Martha J. Bailey; Andrew Goodman-Bacon
  5. Longevity, Age-Structure, and Optimal Schooling By Noël Bonneuil; Raouf Boucekkine
  6. A life-cycle model with ambiguous survival beliefs By Groneck, Max; Ludwig, Alexander; Zimper, Alexander
  7. Seesaws and Social Security Bene?fits Indexing By Matthew Weinzierl
  8. Kaufkraftbereinigte Renten in Deutschland: Eine Analyse auf Kreisebene By Metzger, Christoph
  9. Distributional Effects of Means Testing Social Security: An Exploratory Analysis By Alan Gustman; Thomas Steinmeier; Nahid Tabatabai
  10. Work and Well-Being of Informal Caregivers in Europe By Dörte Heger
  11. Health Spending in Japan: Macro-Fiscal Implications and Reform Options By Masahiro Nozaki; Kenichiro Kashiwase; Ikuo Saito
  12. Africa Rising: Harnessing the Demographic Dividend By Paulo Drummond; Vimal Thakoor; Shu Yu

  1. By: Ding, Ya
    Keywords: life satisfaction, rural China, elderly population, pension system, Health Economics and Policy,
    Date: 2014
  2. By: Joelle Saad-Lessler; Teresa Ghilarducci (Schwartz Center for Economic Policy Analysis (SCEPA))
    Abstract: This study updates what we know about the Great Recession’s impact on older unemployed Americans’ health and pre-retirement life by focusing on their wealth and income sources, health insurance access, poverty rates, unemployment duration, labor force drop-out rates, and Social Security claiming from 2009 through 2012 using the Survey of Income and Program Participation (SIPP) and the Current Population survey (CPS) (Sum, Ishwar and Trubskyy. 2011, Rix 2011 and Van Horn, Corre and Heidkamp 2011). A unique contribution is an in-depth description of unemployed older Americans’ asset levels using recent cross-sectional and longitudinal data that tracks individuals over time to evaluate how their assets changed because of unemployment. All this information helps evaluate how unemployed older Americans have weathered the Great Recession of 2007, five years later.
    Keywords: Retirement, retirement savings, elderly poverty
    JEL: J14 J26 D14
    Date: 2013–06
  3. By: Rachel Ong (Bankwest Curtin Economics Centre, Curtin University); Gavin Wood (Centre for Urban Research, RMIT University); Siobhan Austen (School of Economics and Finance, Curtin University); Therese Jefferson (Graduate School of Business, Curtin University); Marietta E.A. Haffner (Faculty of Architecture and the Built Environment, Delft University of Technology)
    Abstract: resource that can perform a pension role in retirement. This paper assesses the extent to which Australians aged over 45 utilise housing equity withdrawal (HEW) through the three methods of in situ mortgage equity withdrawal, downsizing and selling up. We find that the incidence of HEW has increased over the last decade despite a global financial crisis. Mortgage equity withdrawal is the dominant form of equity release among those under pension age, while downsizing or selling up is relatively more frequent among those above pension age. Different motivations are associated with the decision to invoke alternative styles of equity withdrawal. Mortgage equity withdrawal is linked with financial and employment factors while downsizing and selling up seems to be prompted by adverse life events. Selling up to access equity is typically an option of last resort. Our findings offer insights into important debates around home ownership societies and the welfare role performed by owner-occupied housing in mid-to-late life.
    Keywords: housing equity withdrawal, mortgage equity withdrawal, downsizing, selling up, mid-to-late life
    JEL: E21 J14
    Date: 2014–11
  4. By: Martha J. Bailey; Andrew Goodman-Bacon
    Abstract: This paper uses the rollout of the first Community Health Centers (CHCs) to study the longer-term health effects of increasing access to primary care. Within ten years, CHCs are associated with a reduction in age-adjusted mortality rates of 2 percent among those 50 and older. The implied 7 to 13 percent decrease in one-year mortality risk among beneficiaries amounts to 20 to 40 percent of the 1966 poor/non-poor mortality gap for this age group. Large effects for those 65 and older suggest that increased access to primary care has longer-term benefits, even for populations with near universal health insurance.
    JEL: I28 I3 J14 J18
    Date: 2014–10
  5. By: Noël Bonneuil (Institut national d’études démographiques, EHESS); Raouf Boucekkine (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS, senior member, Institut universitaire de France)
    Abstract: The mechanism stating that longer life implies larger investment in human capital, is premised on the view that individual decision-making governs the relationship between longevity and education. This relationship is revisited here from the perspective of optimal period school life expectancy, obtained from the utility maximization of the whole population characterized by its age structure and its age-specific fertility and mortality. Realistic life tables such as model life tables are mandatory, because the age distribution of mortality matters, notably at infant and juvenile ages. Optimal period school life expectancy varies with life expectancy and mortality. Applications to stable population models and then to French historical data from 1806 to nowadays show that the population age structure has indeed modified the relationship between longevity and optimal schooling.
    Keywords: longevity, schooling, school life expectancy, age structure
    Date: 2014–11
  6. By: Groneck, Max; Ludwig, Alexander; Zimper, Alexander
    Abstract: On average, "young" people underestimate whereas "old" people overestimate their chances to survive into the future. We adopt a Bayesian learning model of ambiguous survival beliefs which replicates these patterns. The model is embedded within a non-expected utility model of life-cycle consumption and saving. Our analysis shows that agents with ambiguous survival beliefs (i) save less than originally planned, (ii) exhibit undersaving at younger ages, and (iii) hold larger amounts of assets in old age than their rational expectations counterparts who correctly assess their survival probabilities. Our ambiguity-driven model therefore simultaneously accounts for three important empirical findings on household saving behavior.
    Keywords: Cumulative prospect theory,Choquet expected utility,Dynamic inconsistency,Life-cycle hypothesis,Saving puzzles
    JEL: D91 D83 E21
    Date: 2014
  7. By: Matthew Weinzierl (Harvard Business School, Business, Government and the International Economy Unit)
    Abstract: The price indexation of Social Security bene.t payments has emerged in recent years as a flashpoint of debate in the United States. I characterize the direct effects that changes in that price index would have on retirees who differ in their initial wealth at retirement and mortality rates after retirement. I propose a simple but flexible theoretical framework that converts benefits reform first into changes to retirees' consumption paths and then into a net effect on social welfare. I calibrate that framework using recently-produced data on Social Security beneficiaries by lifetime income decile and both existing and new survey evidence on the normative priorities Americans have for Social Security. The results suggest that the value retirees place on protection against longevity risk is an important caveat to the widespread enthusiasm for a switch to a slower-growing price index such as the chained CPI-U.
    Date: 2014–11
  8. By: Metzger, Christoph
    Abstract: Der folgende Artikel beschäftigt sich auf Kreisebene mit Rentenzahlbeträgen in Deutschland. Neben einer Betrachtung der Rentenzahlbeträge von Männern und Frauen wird hierbei zwischen dem Rentenbestand sowie dem Rentenzugang im Jahr 2009 unterschieden. Darüber hinaus wird durch Kombination der nominalen Rentenzahlungen mit regionalen Preisindizes ein Vergleich der realen bzw. kaufkraftbereinigten Rentenhöhen ermöglicht. Die Ergebnisse zeigen, dass bei Betrachtung realer Rentenzahlbeträge die regionale Streuung aus einer gesamtstaatlichen Perspektive zunimmt, während sie sich innerhalb der meisten Bundesländer verringert.
    Abstract: This article examines the average pension amounts paid out by the statutory pension insurance in Germany on a regional level. The analysis is done separately for males and females and both for all pensioners as well as for new pensioners in 2009. Additionally the information about pension levels is combined with regional price levels for the purpose of analyzing real (i.e. purchasing-power parity adjusted) pension levels. The results reveal that looking at real pension levels increases regional differences from a federal perspective whereas differences in pension levels within federal states are to some extent reduced.
    JEL: H55 H75 R10
    Date: 2014
  9. By: Alan Gustman (Dartmouth College); Thomas Steinmeier (Texas Tech University); Nahid Tabatabai (Title: Dartmouth College)
    Abstract: This paper examines the distributional implications of introducing additional means testing of Social Security benefits where proceeds are used to help balance Social Security’s finances. Benefits of the top quarter of households ranked according to the relevant measure of means are reduced using a modified version of the Social Security Windfall Elimination Provision (WEP). The replacement rate in the first bracket of the benefit formula, determining the Primary Insurance Amount (PIA), would be reduced from 90 percent to 40 percent of Average Indexed Monthly Earnings (AIME). Four measures of means are considered: total wealth; an annualized measure of AIME; the wealth value of pensions; and a measure of average indexed W2 earnings. The empirical analysis, based on data from the Health and Retirement Study, starts with a baseline benefit for each household, calculated as the product of the average benefit-tax ratio under the current system, multiplied by the taxes paid by the household. These means tests would reduce total household benefits by 7 to 9 percentage points, amounting to 15.4 to 16.4 percent of the benefits of affected workers at baseline. We find that the basis for means testing Social Security makes a substantial difference as to which households have their benefits reduced, and that different means tests may have different effects on the benefits of families in similar circumstance. We also find that the measure of means used to evaluate the effects of a means test makes a considerable difference as to how one would view the effects of the means test on the distribution of benefits.
    Date: 2014–08
  10. By: Dörte Heger
    Abstract: Informal caregivers provide valuable services to elderly persons with long-term care needs, but the consequences of caregiving on caregivers are not yet fully understood. This paper illustrates the interrelation between caregiving and caregivers’ labour force participation, cognitive ability, and health in a simple theoretical model, and estimates the effects of caregiving using panel data from thirteen European countries, which allows to analyze the effect of institutions on caregivers’ outcomes. The results show that caregiving severely and signicantly reduces caregivers’ probability of being employed, but only in countries with few formal care alternatives. Furthermore, caregivers in all countries suffer from worse mental health when caregiving is prompted by poor parental health. The results for the effects of caregiving on physical health and cognitive ability are mixed.
    Keywords: Informal care; labour supply; cognitive ability; physical and mental health
    JEL: I12 J14 J18 J22
    Date: 2014–10
  11. By: Masahiro Nozaki; Kenichiro Kashiwase; Ikuo Saito
    Abstract: Health spending has risen rapidly in Japan. We find two-thirds of the spending increase over 1990–2011 resulted from ageing, and the rest from excess cost growth. The spending level will rise further: ageing alone will raise it by 3½ percentage points of GDP over 2010–30, and excess cost growth at the rate observed over 1990–2011 will lead to an additional increase of 2–3 percentage points of GDP. This will require a sizable increase in government transfers. Japan can introduce micro- and macro-reforms to contain health spending, and financing options should be designed to enhance equity.
    Keywords: Health care spending;Japan;Aging;Fiscal policy;Public health;Fiscal reforms;Japan, health spending, long-term care, fiscal policy
    Date: 2014–08–04
  12. By: Paulo Drummond; Vimal Thakoor; Shu Yu
    Abstract: Africa will account for 80 percent of the projected 4 billion increase in the global population by 2100. The accompanying increase in its working age population creates a window of opportunity, which if properly harnessed, can translate into higher growth and yield a demographic dividend. We quantify the potential demographic dividend based on the experience of other regions. The dividend will vary across countries, depending on such factors as the initial working age population as well as the speed and magnitude of demographic transition. It will be critical to ensure that the right supportive policies, including those fostering human capital accumulation and job creation, are in place to translate this opportunity into concrete economic growth.
    Keywords: Demographic transition;Africa;Sub-Saharan Africa;Population growth;Human capital;Labor force participation;Econometric models;Demographic Dividend, Economic Growth, Sub-Saharan Africa, Panel Estimates
    Date: 2014–08–05

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