nep-age New Economics Papers
on Economics of Ageing
Issue of 2015‒06‒13
33 papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Wealth and the Effect of Subjective Survival Probability By Sanna Nivakoski
  2. Aging and Pension Reform: Extending the Retirement Age and Human Capital Formation By Vogel, Edgar; Ludwig, Alexander; Börsch-Supan, Axel
  3. Changing Population In Japan and A Life-Long Active Society To Cope With It By Atsushi Seike
  4. Savings in times of demographic change: Lessons from the German experience By Börsch-Supan, Axel; Bucher-Koenen, Tabea; Coppola, Michela; Lamla, Bettina
  5. Should I Stay or Should I Go? The Role of Actuarial Reduction Rates in Individual Retirement Planning in Germany By Kluth, Sebastian
  6. Extended Unemployment Benefits and Early Retirement: Program Complementarity and Program Substitution By Inderbitzin, Lukas; Staubli, Stefan; Zweimüller, Josef
  7. The Impact of Hours Flexibility on Career Employment, Bridge Jobs, and the Timing of Retirement By Kevin E. Cahill; Michael D. Giandrea; Joseph F. Quinn
  8. Labour market segmentation and pensions in the Polish defined-contribution scheme By Piotr Lewandowski; Kamil Stronski; Roma Keister
  9. Poverty and transitions in health By Adena, Maja; Myck, Michal
  10. Demographic change in the Asian Century : Implications for Australia and the Region By Peter McDonald
  11. Participación laboral según la edad y duración en el mercado laboral de la población. Colombia 1951 - 2005. By Ramón Enrique Vásquez Ramírez
  12. Social Security in an Analytically Tractable Overlapping Generations Model with Aggregate and Idiosyncratic Risk By Harenberg, Daniel; Ludwig, Alexander
  13. Was wäre wenn wir Schweden wären? Ist das Schwedische Rentensystem auf Deutschland übertragbar? By Rausch, Johannes
  14. Take-off, Persistence, and Sustainability : The Demographic Factor of Chinese Growth By Cai Fang, Lu Yang
  15. Is it all about access? Perceived access to occupational pensions in Germany By Lamla, Bettina; Coppola, Michela
  16. The political economy of public investment when population is aging: A panel cointegration analysis By Jäger, Philipp; Schmidt, Torsten
  18. Idiosyncratic Risk, Aggregate Risk, and the Welfare Effects of Social Security By Daniel Harenberg; Ludwig, Alexander
  19. Actuarial adjustments, retirement behaviour and worker heterogeneity By Giesecke, Matthias
  20. Inequality of opportunity in retirement age: The role of physical job demands By Giesecke, Matthias; Okoampah, Sarah
  21. Choice of received long-term care: Individual responses to regional nursing home provisions By Pilny, Adam; Stroka, Magdalena A.
  22. A Certainty Equivalent Valuation of Social Security Entitlements By Catherine , Sylvain
  23. Scale economies in pension fund investments: A dissection of investment costs across asset classes By Dirk Broeders; Arco van Oord; David Rijsbergen
  24. Work and well-being of informal caregivers in Europe By Heger, Dörte
  25. Intergenerational Politics, Government Debt, and Economic Growth By Tetsuo Ono
  26. Generational Differences at Work in Spain By Lasierra, Jose Manuel; Molina, Jose Alberto; Ortega, Raquel
  27. Macroeconomic crunches during working years and health outcomes later in life By Antonova, Liudmila; Bucher-Koenen, Tabea; Mazzonna, Fabrizio
  28. Long-term care insurance and carers' labor supply: A structural model By Geyer, Johannes; Korfhage, Thorben
  29. Einkommens- und Bildungsungleichheit im gesundheitlichen Vorsorgeverhalten in Europa By Bristle, Johanna
  30. The Exchange Motive in Intergenerational Transfers By Sanna Nivakoski
  31. Drug oversupply in nursing homes: An empirical evaluation of administrative data By Stroka, Magdalena A.
  32. Do elderly choose nursing homes by quality, price or location? By Schmitz, Hendrik; Stroka, Magdalena A.
  33. The mental and physical burden of caregiving: Evidence from administrative data By Stroka, Magdalena A.

  1. By: Sanna Nivakoski (UCD Geary Institute for Public Policy, University College Dublin)
    Abstract: The life-cycle hypothesis predicts that longer life expectancy should, ceteris paribus, lead to the accumu- lation of more wealth during working life to fund consumption in retirement. The prediction is tested by examining whether subjective survival probability (SSP)- a proxy measure of self-assessed life ex- pectancy - affects wealth holdings among the pre-retirement older population. SSP is instrumented to address measurement error and reverse causality. The findings suggest that a 1 percentage point increase in the self-assessed probability of reaching age 75 increases an individual's financial wealth by approximately EUR 3,400 and total wealth (including pension wealth) by approximately EUR 6,200.
    Keywords: financial wealth, pension wealth, life-cycle hypothesis, longevity, subjective survival probability
    JEL: D14 D84 D91
    Date: 2015–06–03
  2. By: Vogel, Edgar; Ludwig, Alexander; Börsch-Supan, Axel (Munich Center for the Economics of Aging (MEA))
    JEL: C68 E17 E25 J11 J24
    Date: 2015–03–23
  3. By: Atsushi Seike
    Abstract: Japan's population ageing is unprecedented in modern industrial economies. An ageing population in Japan requires policy measures to encourage lifelong social and economic participation in order to counteract a shrinking workforce and productivity declines. This paper suggests several policy tools, including pension reforms and retirement norms, that could be used to build a 'lifelong active society'.
    Keywords: Demographic Trends, Japanese ageing, Intergenerational Policy
    JEL: J11 J14 J18
    Date: 2015–04
  4. By: Börsch-Supan, Axel; Bucher-Koenen, Tabea; Coppola, Michela; Lamla, Bettina (Munich Center for the Economics of Aging (MEA))
    Abstract: Pension reforms in many developed countries make individuals shoulder a bigger share of longevity and income risks. The desired response is that individuals accumulate private assets for retirement. Whether this actually takes place, is of paramount relevance for scientists and policy makers. We take Germany as an example: Twenty years of pension reform have transformed the monolithic German pension system into a multi-pillar system. Formerly generous public pension benefits are gradually being reduced, while substantial incentives are granted to occupational and private saving schemes. Has this transition worked out? We survey the reform steps and household’s reactions: How did individuals adjust their labor market behavior? How did private and occupational pension plans take off? How do behavioral adjustments vary in the population? Most Germans adapted to the new situation. Both actual and expected retirement decisions changed and the share of households without supplementary pensions decreased from 73% to 39% in little more than a decade. This is a remarkable success. Nonetheless, households with low education, low income and less financial education did neither adjust their retirement behavior nor pick up supplementary pension plans and are thus likely to face difficulties in bridging the gap arising in future pension income.
    JEL: D91 J26 D14
    Date: 2014–10–31
  5. By: Kluth, Sebastian (Munich Center for the Economics of Aging (MEA))
    Abstract: This Paper provides a two-part empirical analysis on how actuarial reduction rates for early retirement affect current pension payments in Germany and to what extent the existence and the magnitude of such reduction rates influence people’s retirement planning. First, when looking at administrative records, early retirement shows a high prevalence at the extensive and at the intensive margin, in particular for women and medium income insurant. Second, a special question in the 2011 SAVE survey is exploited where respondents are offered a hypothetical deal for early retirement if in turn they are willing to accept an actuarial reduction on their pension. It becomes evident that the maximal reduction rate people would be willing to accept is widely dispersed and on average roughly double the current legal rate. Furthermore, respondents seem to make consistent choices and high endowment of financial assets and additional old age provision, high subjective life expectancy, bad health as well as being a man are positively correlated to the actuarial reduction rate the respondents would accept at most. Given that policymakers aim to increase the average retirement age, the results emphasize the need for a simultaneous increase of not only the statutory retirement age but the minimum early retirement age as well, since actuarial reduction rates cannot be expected to change the retirement behavior of workers with a strong preference for early retirement or those who rely on social benefits.
    JEL: D03 D14 D84 D91 H55
    Date: 2014–06–03
  6. By: Inderbitzin, Lukas; Staubli, Stefan; Zweimüller, Josef
    Abstract: We explore how extended unemployment insurance (UI) benefits for older workers affect early retirement and welfare. We argue that extending UI benefits generates program complementarity (more labor market exits and disability benefit take-up in the future) and program substitution (less disability benefit take-up in the present). Exploiting a policy change in Austria, which extended UI benefits to 4 years, we find program complementarity effects for workers aged 50+ and program substitution effects for workers aged 55+. We apply the Baily-Chetty formula for optimal UI to account for complementarity and substitution, showing that UI benefits for older workers were too generous.
    Keywords: disability; early retirement; optimal benefits; policy reform; unemployment
    JEL: J14 J26 J65
    Date: 2015–06
  7. By: Kevin E. Cahill (Sloan Center on Aging & Work at Boston College); Michael D. Giandrea (U.S. Bureau of Labor Statistics); Joseph F. Quinn (Boston College)
    Abstract: To what extent does hours flexibility in career employment impact the retirement process? Workplace flexibility policies have the potential to improve both the welfare of employees and the business outcomes of employers. These policies, and hours flexibility in particular for older Americans, have also been touted as a way to reduce turnover. For older Americans, reductions in turnover could mean more years in career employment, fewer years in bridge employment, and little or no impact on the timing of retirement. Alternatively, hours flexibility in career employment could lead to longer working lives and delayed retirements. The distinction between the two outcomes is important if hours flexibility policies, such as phased retirement, are to be considered an option for alleviating the strains of an aging society. This paper describes how hours flexibility in career employment impacts the retirement patterns of older Americans. We use data on three cohorts of older Americans from the Health and Retirement Study (HRS), a large nationally-representative dataset that began in 1992. We explore the extent to which hours flexibility arrangements are available and utilized in career employment and explore the extent to which such arrangements impact job transitions later in life. We find that bridge job prevalence is higher among those with access to hours flexibility in career employment compared to those without hours flexibility. Further, while we find mixed evidence that hours flexibility extends time in career employment, we do find that hours flexibility in career employment is associated with longer tenure on bridge jobs. Taken together these results suggest that hours flexibility in career employment is associated with extended work lives, particularly in post-career employment.
    Keywords: Economics of Aging, Partial Retirement, Gradual Retirement
    JEL: J26 J14 J32 H55
    Date: 2014–02–12
  8. By: Piotr Lewandowski; Kamil Stronski; Roma Keister
    Abstract: In this paper we apply the cohort model of the pension scheme to analyse the impact of labour market segmentation, in particular the use of contracts on mandate, on expected retirement benefits in Poland. Heterogeneity of labour force and impact of differences in years of employment, contributions paid and account indexation are taken into consideration. The effects of policy instruments aimed at increasing the stream of contributions paid by workers with contracts of mandate are evaluated. We find that the expected retirement benefit in the segment of contracts of mandate is lower by 17% than in the segment of employment contracts. The major cause of this gap between segments are lower contributions in the case of men and shorter life-cycle employment in the case of women. The obligation to pay contributions on all contracts of mandate from the minimum wage level will enable closing the pension gap by ca. 4.4 pp. unless the obligation increases unemployment risk in the segment of contracts of mandate. Additional saving of 2% of the gross wage during spells of work on contract of mandate reduces the gap by less than 1 pp.
    Keywords: labour market segmentation, pensions, defined-contribution pension scheme
    JEL: J26 J32 J68
    Date: 2015–06
  9. By: Adena, Maja; Myck, Michal (Munich Center for the Economics of Aging (MEA))
    Abstract: Using a sample of Europeans aged 50+ from twelve countries in the Survey of Health, Ageing and Retirement in Europe (SHARE) we analyse the role of poor material conditions as a determinant of changes in health over a four-year period. We find that poverty defined with respect to relative incomes has no effect on changes in health. However, broader measures of poor material conditions such as subjective poverty or low relative value of wealth significantly increase the probability of transition to poor health among the healthy and reduce the chance of recovery from poor health over the time interval analysed. In addition to this the subjective measure of poverty has a significant effect on mortality, increasing it by 40.3% among men and by 58.3% among those aged 50–64. Material conditions matter for health among older people. We suggest that if monitoring of poverty in old age and corresponding policy targets are to focus on the relevant measures, they should take into account broader definitions of poverty than those based only on relative incomes.
    JEL: I14 I32 J14
    Date: 2013–07–22
  10. By: Peter McDonald (The Australian National University)
    Abstract: From the demographic perspective, the 21st century is the population ageing century. Population ageing is well underway in all Asian countries as a result of the spectacular falls in both fertility and mortality rates in the second half of the 20th century.
    Keywords: Demographic Trends, Asian Century, Intergenerational Policy
    JEL: J11 J14 J18
    Date: 2015–04
  11. By: Ramón Enrique Vásquez Ramírez
    Abstract: Las rotundas transformaciones demográficas y no demográficas que se dieron en Colombia durante la segunda mitad del siglo pasado y lo que lleva del presente redundaron en significativos cambios de la participación laboral y de la duración en la actividad económica de la población. El análisis de los cambios mencionados resulta de mucha utilidad para la política pública. En especial es útil para la evaluación y la proyección de las demandas de empleo de la población según la edad y de las necesidades de seguros de retiro. El presente artículo explora los cambios según la edad de la participación laboral y de la duración en la actividad económica de la información censal desde la segunda mitad del siglo pasado y el censo de población más reciente. Con esta información también se comparan los cambios de la estructura etaria de la población en edad de trabajar (PET) y de la población económicamente activa (PEA), para discurrir sobre el envejecimiento de la fuerza de trabajo. El análisis de los cambios de la participación laboral de los adultos mayores reviste especial atención en este artículo debido a la progresiva expansión numérica de esta población por efecto de los cambios demográficos, la vasta proporción que se encuentra en condición de pobreza y la baja cobertura del sistema de pensiones en Colombia. En particular con esta información es posible establecer si la trayectoria de participación laboral de las personas en esas edades sustenta las proyecciones existentes. ****** The categorical demographic and non-demographic changes that occurred in Colombia during the second half of the last century and which leads the present, resulted in significant changes in labor force participation and duration in the economic activity of the population. The analysis of these mentioned changes is very useful for public policy. In particular it is useful for the evaluation and screening of applications for employment of the population depending on the age and retirement insurance needs. This article explores the changes according to age of labor force participation and duration in the economic activity census data from the second half of the last century and the most recent population census. With this information the changes in the age structure of the population of working age (PET) and the economically active population (EAP) are compared to discourse on aging workforce. The analysis of changes in labor force participation of older adults is of particular attention in this article due to the progressive numerical expansion of this population as a result of demographic changes, the vast proportion found in poverty and low coverage pension system in Colombia. In particular, with this information is possible to determine whether the trajectory of labor participation of people in that age group supports existing projections.
    Keywords: Participación laboral, patrón de participación laboral, ciclo vital de participación laboral, población económicamente activa, mercado laboral, cambio demográfico, envejecimiento poblacional, adultos mayores, duración de la actividad económica, vidaeconómicamente activa, vida económicamente inactiva.
    Date: 2014–12–16
  12. By: Harenberg, Daniel; Ludwig, Alexander (Munich Center for the Economics of Aging (MEA))
    Abstract: When markets are incomplete, social security can partially insure against idiosyncratic and aggregate risks. We incorporate both risks into an analytically tractable model with two overlapping generations and demonstrate that they in- teract over the life-cycle. The interactions appear even though the two risks are orthogonal and they amplify the welfare consequences of introducing social security. On the one hand, the interactions increase the welfare benefits from insurance. On the other hand, they can in- or decrease the welfare costs from crowding out of capital formation. This ambiguous effect on crowding out means that the net effect of these two channels is positive, hence the interactions of risks increase the total welfare benefits of social security.
    JEL: C68 E27 E62 G12 H55
    Date: 2014–09–22
  13. By: Rausch, Johannes (Munich Center for the Economics of Aging (MEA))
    Abstract: Sweden is regularly mentioned as a possible model for a reform of the German Pension Insurance System. However, this is done mostly without paying attention to the differences in the initial demographic situation of both countries. In this study, the consequences of these differences for the design of the pension insurance systems in both countries are analyzed. It becomes apparent that Sweden faces considerably smaller demographic challenges. The contribution rate of the German Statutory Pension Insurance would increase by less than 2.8 percentage points until 2060 with a Swedish population structure. Simultaneously, the gross standard pension level would be 3.4 percentage points higher until 2060. Vice versa, a change to the Swedish NDC system with a constant contribution rate of 20% in Germany would induce a reduction of the average gross pension level that is more than twice as high compared to the reduction under the current system. This is completely attributable to the different assignment of the demographical burden to pensioners and contributors.
    JEL: H55 J11
    Date: 2014–12–31
  14. By: Cai Fang, Lu Yang
    Abstract: With the reduction of the working-age population and the increase of the population dependency ratio as the main characteristics of the demographic dividend having disappeared, China’s potential growth rate decreases. And our results suggest that demographic dividend contributed to nearly one forth of the economic growth in China in the past three decades, while TFP growth explains another one third with the remainder mainly due to capital accumulation, explaining nearly half. China’s potential growth rate will slow down—from nearly 10 per cent in the past 30 years to 7.5 per cent on average during 2011-2015—due to the diminished demographic dividend, but reform measures are conductive to clearing the institutional barriers to the supply of factors and productivity, thereby slowing the declining trend of potential growth rate. The aggregate reform dividend (e.g., relax family planning policy, postpone the retirement age, improvement of education and training, tax cut, and improvement of TFP) could reach to 1-2 percentage points on average during 2016-2050.
    Keywords: potential growth rate, Demographic dividend, reform dividend, total factor productivity
    JEL: O47 J21 C53
    Date: 2015–04
  15. By: Lamla, Bettina; Coppola, Michela (Munich Center for the Economics of Aging (MEA))
    Abstract: This paper provides an empirical analysis of what determines access to occupational pensions as perceived by workers. We investigate this issue in Germany, where workers have the legal right to an occupational pension since 2001, but many might lack the incentive or the ability to gather and process the relevant information to make use of their right. In particular, if workers rely exclusively on the information available at their firm, employers will continue to regulate access despite workers’ rights. Our findings suggest that the current regulation in Germany has not resolved the problem of workers’ ignorance of their access to occupational pensions. Only about half the workers are aware of having access to an occupational pension. We find that there is important heterogeneity in workers’ perceptions, and that this heterogeneity is directly related to worker and firm-side factors as well as outcomes of the employer-employee match. Distorted perceptions have important consequences for workers, policy makers and firms. Workers can only make optimal savings decisions if they are aware of their savings possibilities. Policy makers could help by making information material about occupational pensions mandatory and/or by defining standardised information. A low level of knowledge of employees might also be frustrating for employers, as this would suggest that workers do not appreciate their occupational pension, limiting the power of occupational pension as a Human Resources tool.
    JEL: J26 D83
    Date: 2013–12–11
  16. By: Jäger, Philipp; Schmidt, Torsten
    Abstract: Time preferences vary by age. Notably, according to experimental studies, senior citizens tend to discount future payoffs more heavily than working-age individuals. Based on these findings, we hypothesize that demographic change has contributed to the cut-back in government-financed investment that many advanced economies experienced over the last four decades. We demonstrate for a panel of 13 OECD countries between 1971 and 2007 that the share of elderly voters and public investment rates are cointegrated, indicating a long-run relationship between them. Estimating this cointegration relationship via pooled dynamic OLS (D-OLS) and fully modified OLS (FM-OLS) we find a negative and significant effect of population aging on public investment. Moreover, the estimation of an error correction model reveals long-run Granger causality running exclusively from aging to investment. Our results are robust to the inclusion of additional control variables typically considered in literature on the determinants of public investment.
    Abstract: Experimentelle Studien haben gezeigt, dass ältere Menschen dazu neigen, zukünftige Geldflüsse stärker als Personen im erwerbsfähigen Alter zu diskontieren. Darauf aufbauend stellen die Autoren in diesem Artikel die Hypothese auf, dass der Rückgang der öffentlichen Investitionen im Verhältnis zum Bruttoinlandsprodukt, welcher in den letzten vier Jahrzehnten in vielen entwickelten Volkswirtschaften zu beobachten war, zum Teil auf den demografischen Wandel zurückzuführen ist. Grundlage dieser Hypothese ist das 'Wähler-Gruppen Entscheidungsmodell' von Craig and Inman (1986) und die Annahme, dass ältere Wähler auf Grund ihrer Zeitpräferenzen weniger öffentliche Investitionen nachfragen als Personen im erwerbsfähigen Alter. Da der Anteil älterer Wähler im Zuge des demografischen Wandels zugenommen hat, könnte dies zum Rückgang der öffentlichen Investitionen beigetragen haben. Der Zusammenhang zwischen der öffentlichen Investitionsquote und dem Anteil älterer Wähler an der Gesamtwählerschaft wird im Artikel empirisch mit Hilfe eines Panel Kointegrationsansatzes für 13 OECD Staaten im Zeitraum zwischen 1971 und 2007 geschätzt. In Übereinstimmung mit dem theoretischen Modell finden die Autoren einen negativen sowie statistisch und ökonomisch signifikanten Zusammenhang zwischen den beiden Variablen.
    Keywords: public investment,population aging,panel cointegration
    JEL: H54 D72 J11 J14 D91
    Date: 2015
  17. By: Gabriela Tudose (INCSMPS, Bucuresti, Romania); Daniela Paşnicu (Spiru Haret, Bucuresti, Romania); Cătălin Ghinăraru (INCSMPS, Bucuresti, Romania); Adriana Ana Maria Davidescu (INCSMPS, Bucuresti, Romania)
    Abstract: In the EU-28, employment and unemployment among the elderly have experienced changes in the period 2002-2013, which differs significantly from country to country. These changes were mainly due to acute financial crisis. The paper draw a statistical analysis of active aging, active performance measures applied to the 6 member states of the European Union and Romania reflected in labor market outcomes. It was intended to highlight key issues related to the elderly population situation in Romania in conjunction with key labor market indicators and economic development. The paper concludes with a set of conclusions related to the effectiveness of older people employment activation on the labor market in Romania. Analyses undertaken in this paper illustrate that the employment and unemployment among older people continue to pose problems in the labor market in Romania. In the period 2005-2013, in Romania, the employment gap related to the average of EU-28 increased, while the unemployment shows consistently lower values than the European average for over 55 years. Although strategic goals adaptation kept pace with Europe, the implementation of measures to realize the general policies in order to increase employment of the elderly in Romania didn't show diversity and noticed no substantial financial allocation thereof.
    Keywords: elderly employment, elderly unemployment, active ageing policies, salary subsidies, European strategic objectives, employment regulation, employment agency.Length: 7 pages
    JEL: J6 J08 J01
    Date: 2015–05
  18. By: Daniel Harenberg; Ludwig, Alexander (Munich Center for the Economics of Aging (MEA))
    JEL: C68 E27 E62 G12 H55
    Date: 2015–05–08
  19. By: Giesecke, Matthias
    Abstract: The behavioural response with respect to actuarial adjustments in the German public pension system is analysed. The introduction of actuarial adjustments serves as a source of exogenous variation to estimate discrete time transition rates into retirement. The analysis is conducted on administrative data from social security records and on survey data in a comparative scenario. Probability mass points that occur for institutional reasons and due to social norms are controlled for. Moreover, worker heterogeneity is taken into account, which has not been addressed in the previous literature. The results show that on average retirement is postponed by five months due to financial incentives via actuarial adjustments. However, this response is about 40 per cent lower for manual workers compared to non-manual workers which indicates that their retirement income may deteriorate.
    Abstract: Die Studie untersucht die Verhaltensreaktion auf finanzielle Anreize hinsichtlich des Renteneintrittsalters. Die Einführung versicherungsmathematischer Abschläge dient als Quelle exogener Variation, um Renteneintrittsraten in diskreter Zeit zu schätzen. Die Analyse basiert auf Administrativdaten der Deutschen Rentenversicherung (VSKT) sowie Umfragedaten des Sozioökonomischen Panels (SOEP) um mögliche Unterschiede in den Ergebnissen aufgrund der Datenmenge und Datenqualität in einem komparativen Szenario zu kontrollieren. Ein besonderer Fokus in der Analyse des Renteneintrittsverhaltens liegt auf individueller Heterogenität hinsichtlich des physischen Anspruchs ehemals ausgeübter Berufe. Die Ergebnisse zeigen, dass die Einführung versicherungsmathematischer Abschläge in Deutschland zu einer durchschnittlichen Verzögerung des Renteneintritts um fünf Monate führt. Diese Reaktion auf finanzielle Anreize ist bei Individuen mit ehemals physisch anspruchsvollen Berufen jedoch etwa 40% niedriger.
    Keywords: natural experiment,actuarial adjustments,retirement,worker heterogeneity
    JEL: C41 H55 J26
    Date: 2014
  20. By: Giesecke, Matthias; Okoampah, Sarah
    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 effort 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.
    Abstract: Wir quantifizieren die Differenz im Renteneintrittsalter zwischen Individuen, die sich hinsichtlich des Grades der physischen Arbeitsbelastung in ihrem Beruf unterscheiden. Diskrete Verweildauermodelle deuten auf substantielle Unterschiede im Renteneintrittsalter zwischen diesen Gruppen hin. Wir evaluieren die Differenz hinsichtlich der Frage, inwiefern prädeterminierte Umstände in der Kindheit über den Kanal der Selektion in physisch anspruchsvolle Berufe auf das Renteneintrittsalter wirken. Um Unterschiede zu separieren, die durch prädeterminierte Umstände auf der einen Seite und durch individuelle Entscheidungen oder Zufall auf der anderen Seite hervorgerufen wurden, testen wir auf stochastische Dominanz für ausgewählte prädeterminierte Kriterien und führen eine Blinder-Oaxaca-Zerlegung durch. Die Ergebnisse implizieren, dass prädeterminierte individuelle Charakteristika etwa ein Drittel der Differenz im Renteneintrittsalter erklären, welche über den Kanal des physischen Anspruchs der Beschäftigung transportiert wird.
    Keywords: retirement age,inequality of opportunity,physical job demands,blinder-oaxaca-decomposition
    JEL: D63 J26 J62 C14
    Date: 2014
  21. By: Pilny, Adam; Stroka, Magdalena A.
    Abstract: Existing literature analyzing the choice of received long-term care by frail elderly (65+ years) predominantly focuses on physical and psychological conditions of elderly people as factors that influence the decision for a particular type of care. Until now, however, the regional in-patient long-term care supply has been neglected as influential factor in the individual's decision-making process. In this study, we analyze the choice of received long-term care by explicitly taking the regional supply of nursing homes into account. When estimating a discrete choice model, we distinguish between four different types of formal and informal care provision. We find that the decision for long-term in-patient care is significantly correlated with the regional supply of nursing home places, while controlling for physical and psychological conditions of the individual.
    Abstract: Die bisherige Literatur, die sich mit der Wahl der Pflegeform für die Langzeitpflege von über 65-jährigen Pflegebedürftigen beschäftigt, beschränkt sich zumeist auf den körperlichen und psychologischen Zustand der pflegebedürftigen Person als Einflussfaktor. Bisher wurde das regionale Angebot an stationärer Pflege nicht als Einflussfaktor untersucht. In dieser Studie untersuchen wir die Wahl der Pflegeform in Deutschland, wobei wir explizit das regionale Angebot an Pflegeheimplätzen als potenziellen Einflussfaktor in unser empirisches Modell einbeziehen. Darüber hinaus berücksichtigen wir in unserer Modellierung alle vier informellen sowie formellen Pflegeformen, die in Deutschland angeboten werden. Unsere Ergebnisse zeigen, dass die Entscheidung für stationäre Pflege signifikant mit dem regionalen Angebot an Pflegeheimplätzen korreliert, sofern für den körperlichen und psychologischen Zustand des Pflegebedürftigen und regionale Unterschiede kontrolliert wird.
    Keywords: informal care,formal care,choice of care,administrative data,nursing home supply
    JEL: C35 D12 I11
    Date: 2014
  22. By: Catherine , Sylvain
    Abstract: This paper computes the certainty equivalent of the United States Social Security in a calibrated life-cycle model when the stock and labor markets are cointegrated. In the baseline calibration, the certainty equivalent of current workers and retirees is found to be 37% lower at the national scale than the sum of expected cash flows discounted at the risk-free rate. The results suggest that the present value of pension entitlements and the transition cost to a funded system may be largely overestimated if not properly risk-adjusted.
    Keywords: Household finance; Social Security; Public liabilities; Portfolio choices
    JEL: D91 G11 G18 H55 H60
    Date: 2015–02–13
  23. By: Dirk Broeders; Arco van Oord; David Rijsbergen
    Abstract: Using a unique dataset of 225 Dutch occupational pension funds with a total of 928 billion euro of assets under management, we provide a comprehensive analysis of the relation between investment costs and pension fund size. Our dataset is free from self-reporting biases and decomposes investment costs for 6 asset classes in management costs and performance fees. A pension fund that has 10 times more assets under management, has on average 7.67 basis points lower annual investment costs. These economies of scale are solely driven by management costs. Robustness checks show that this key finding does not vary over different pension fund sizes. Economies of scale do, however, differ per asset class. We find significant economies of scale in fixed income, equity and commodity portfolios, but not in real estate investments, private equity and hedge funds. We also find that large pension funds pay significantly higher performance fees for equity, private equity and hedge fund investments.
    Keywords: pension funds; asset management; management costs; performance fees
    JEL: G11 G12 G23
    Date: 2015–06
  24. By: Heger, Dörte
    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 13 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.
    Abstract: Informelle Pflegerinnen und Pfleger leisten einen wertvollen Beitrag zu der Pflege älterer Menschen. Welche Folgen die Erbringung von Pflege auf die pflegende Person hat, ist jedoch noch nicht vollständig bekannt. Diese Studie verdeutlicht den Zusammenhang zwischen Pflegeerbringung, Arbeit, kognitiven Fähigkeiten und Gesundheit in einem theoretischen Modell und schätzt die Auswirkung von Pflegeerbringung anhand von Längsschnittdaten aus 13 europäischen Ländern. Dabei wird insbesondere der Einfluss institutioneller Faktoren auf die Auswirkungen von Pflegeerbringung analysiert. Die Ergebnisse zeigen, dass Pflegeerbringung die Erwerbstätigkeit in Ländern mit einem geringeren professionellen Pflegeangebot stark reduziert. Dagegen leiden in allen Ländern pflegende Personen häufiger an depressiven Symptomen. Die Ergebnisse für kognitive Fähigkeiten und Gesundheit sind gemischt.
    Keywords: informal care,labour supply,cognitive ability,physical and mental health
    JEL: I12 J14 J18 J22
    Date: 2014
  25. By: Tetsuo Ono (Graduate School of Economics, Osaka University)
    Abstract: This study presents a two-period overlapping-generations model featuring in- tergenerational conflict over fiscal policy. In particular, we characterize a Markov- perfect political equilibrium of the voting game between generations and show the following three main results. First, population aging incentivizes the government to invest more in capital for future public spending, positively affecting economic growth. Second, when the government finances its spending by issuing bonds, the introduction of the balanced budget rule results in a higher public spending-to-GDP ratio and a higher growth rate. Third, to obtain a normative implication of the po- litical equilibrium, we compare it with an allocation chosen by a benevolent planner who takes care of all future generations. The planner's allocation might feature less growth and more borrowing than the political equilibrium if the planner attaches low weights to future generations.
    Keywords: Economic Growth; Government Debt; Overlapping Generations; Pop- ulation Aging; Voting
    JEL: D72 D91 H63
    Date: 2014–06
  26. By: Lasierra, Jose Manuel; Molina, Jose Alberto; Ortega, Raquel
    Abstract: The purpose of this paper is to explore differentials in the job satisfaction and the organizational commitment of Baby Boomers and Generation X. In light of multiple age segments in the workforce, and the ageing population, human resource management strategies aimed at attracting, engaging, and retaining employees of all ages are of strategic importance. Through the use of the large-scale Quality of Life at Work, 2006-2010 survey (Spain), we have carried out an empirical approach that points to real and significant differences between these two generations, with respect to wages, leisure time, co-worker relationships, occupations, and human relationships. The findings of our study suggest that management will increasingly be required to take the generational diversity of the workforce into account. The value of this paper is to show several marked differences between generation groups in the labour market and, subsequently, it concludes by considering the implications of our results for work management both in theory and in practice.
    Keywords: Generational groups, work organization, job satisfaction, employee commitment, human resources
    JEL: M12 M51 M54
    Date: 2015–06–03
  27. By: Antonova, Liudmila; Bucher-Koenen, Tabea; Mazzonna, Fabrizio (Munich Center for the Economics of Aging (MEA))
    Abstract: We investigate the long-term effects of macroeconomic crises experienced during prime working age (20 to 50) on health outcomes later in life using data from eleven European countries. Experiencing a severe crisis in which GDP dropped by at least 1% significantly reduces health later in life. Specifically, respondents hit by such a shock rate their subjective health as worse, are more likely to suffer from chronic diseases and mobility limitations, and have lower grip strength. The effects are larger among low-educated respondents. Experiencing a crisis year decreases the probability of being in good health later in life equivalent to being two years older in the overall sample or four years older in the low-educated subsample. Highly educated respondents' health is not affected by economic crises and additionally economic booms have a positive effect on their health. An analysis of critical periods in life reveals that in particular crises experienced later in the career (between age 40 and 50) matter for health. Extensive robustness checks show that our results are not driven by general improvements in health during the post-war years.
    JEL: I15 J14 N14
    Date: 2014–12–19
  28. By: Geyer, Johannes; Korfhage, Thorben
    Abstract: In Germany, individuals in need of long-term care receive support through benefits of the long-term care insurance. A central goal of the insurance is to support informal care provided by family members. Care recipients can choose between benefits in kind (formal home care services) and benefits in cash. From a budgetary perspective family care is a cost-saving alternative to formal home care and to stationary nursing care. However, the opportunity costs resulting from reduced labor supply of the carer are often overlooked. We focus on the labor supply decision of family carers and the incentives set by the long-term care insurance. We estimate a structural model of labor supply and the choice of benefits of family carers. We find that benefits in kind have small positive effects on labor supply. Labor supply elasticities of cash benefits are larger and negative. If both types of benefits increase, negative labor supply effects are offset to a large extent.
    Abstract: Eines der zentralen Ziele der deutschen Pflegeversicherung ist die Unterstützung informeller Pflege durch Familienangehörige. Die Pflegeversicherung bietet anspruchsberechtigten Personen die Möglichkeit, zwischen verschiedenen Leistungen zur Unterstützung der häuslichen Pflege zu wählen. Pflegegeld kann entweder als Geldleistung direkt ausgezahlt werden oder als Sachleistung (in Form von formeller Pflege durch Pflegedienstleister) in Anspruch genommen werden. Werden ausschließlich die direkten Ausgaben der Pflegeversicherung berücksichtigt, erscheinen Geldleistungen und damit informelle Pflege durch Familienangehörige als kostengünstiger im Vergleich zu den teureren Alternativen der formellen häuslichen Pflege oder der stationären Pflege in Pflegeheimen. Unberücksichtigt bleiben dabei jedoch die Opportunitätskosten der informellen Pflege, die vor allem durch ein reduziertes Arbeitsangebot der Pflegenden entstehen können. Wir untersuchen deshalb die Veränderungen der Arbeitsangebotsentscheidung und des Pflegeverhaltens informell pflegender Haushaltsmitglieder durch veränderte Anreize der Pflegeversicherung. Dafür schätzen wir ein strukturelles Modell des Arbeitsangebots und der Nachfrage nach Leistungen aus der Pflegeversicherung. Unsere Ergebnisse zeigen kleine positive Arbeitsangebotseffekte durch eine Ausweitung der Sachleistungen und große negative Effekte durch eine Erhöhung der Geldleistungen. Kommt es zu einer simultanen Ausweitung beider Leistungen, gleichen sich die die gegenläufigen Effekte zu großen Teilen gegenseitig aus und der Arbeitsangebotseffekt bleibt moderat.
    Keywords: labor supply,long-term care,long-term care insurance,structural model
    JEL: J22 H31 I13
    Date: 2014
  29. By: Bristle, Johanna (Munich Center for the Economics of Aging (MEA))
    Abstract: Soziale Ungleichheit im Gesundheitsverhalten ist ein in der Gesundheitssoziologie viel diskutiertes Forschungsfeld, wobei gesundheitlichen Vorsorgeuntersuchungen bisher eher wenig Aufmerksamkeit zukam. Die vorliegende Arbeit untersucht für drei Vorsorgeuntersuchungen, ob die Teilnahme nach Bildung und Einkommen variiert und somit auch hier soziale Ungleichheit besteht. Daraufhin soll gezeigt werden, inwieweit diese sozial ungleiche Inanspruchnahme von Vorsorgeuntersuchungen im europäischen Vergleich und nach spezifischen institutionellen Merkmalen der Gesundheitssyteme variiert. Die Arbeit orientiert sich theoretisch an einem mikrosoziologischem Handlungsmodell, welches rationaler Kosten- Nutzen-Kalkulation folgt. Datengrundlage bilden die ersten beiden Wellen des Survey of Health, Ageing and Retirement in Europe (SHARE), welche sich auf die Bevölkerung 50+ in 13 europäischen Ländern bezieht. Für Makroeinflüsse werden Daten der OECD zu den staatlichen Ausgaben für Prävention und Public Health sowie zu der Höhe privater Zuzahlungen herangezogen. Die Ergebnisse zeigen, dass die Teilnahme sich nach Bildung und Einkommen unterscheidet, dies aber auf wenige spezifische Länder in den Analysen zurückzuführen ist. Von systemischer Seite haben die privaten Zuzahlungen keinen Einfluss auf die soziale Ungleichheit von Vorsorgeuntersuchungen, wohingegen staatliche Ausgaben zumindest teilweise Erkärungskraft besitzen.
    Date: 2014–02–04
  30. By: Sanna Nivakoski (UCD Geary Institute for Public Policy, University College Dublin)
    Abstract: This article examines the exchange motive in intergenerational monetary transfers, namely current inter vivos transfers and planned bequests. The focus is on the causal effect of child-provided help on transfers from parents to adult children. Cross-sectionally, small transfers and help are positively correlated, with the findings robust to inclusion of child-parent relationship controls and lagged help. In an analysis of first-differenced data, the effect is statistically significant at the 10 per cent level. The analysis of planned bequests reveals no effect of child-provided help, suggesting that inter vivos transfers are better suited to exchange.
    Keywords: exchange motive, intergenerational transfers, inter vivos, bequests, informal care
    JEL: J14 D13 D91 H31
    Date: 2015–06–03
  31. By: Stroka, Magdalena A.
    Abstract: A widely discussed shortcoming of long-term care in nursing homes for elderly is the inappropriate or suboptimal drug utilization, in particular the utilization of psychotropic drugs. This paper estimates the effect of institutionalization on the drug intake of frail elderly using administrative data from the largest sickness fund in Germany. Difference-in-differences propensity score matching techniques are used to compare drug prescriptions of frail elderly who entered a nursing home with those who remained in the out-patient care system. The findings suggest that nursing home inhabitants receive more doses of antipsychotics, antidepressants and analgesics. The potential oversupply goes along with estimated drug costs of about 87 million per year.
    Abstract: Unter Rückgriff auf die Routinedaten Deutschlands größter Krankenkasse analysiert die vorliegende Studie die Unterschiede der in einem Jahr verschriebenen Dosen verschiedener Arzneistoffklassen im ambulanten und stationären Pflegebereich. Erstmalig in der Literatur werden dabei im Rahmen der Untersuchung von Verschreibungsunterschieden potenziell inadäquate Medikationen für ältere Menschen betrachtet. Die Ergebnisse des Difference-in-difference Propensity Score Matchings zeigen, dass im stationären Pflegebereich mehr Antipsychotika, Antidepressiva und Schmerzmittel verordnet werden als in der ambulanten Pflege. Diese potenzielle Überversorgung geht mit jährlichen Medikamentenkosten in Höhe von etwa 87 Millionen einher.
    Keywords: medication errors,patient safety,expenditures,drug over- and undersupply,medical costs
    JEL: I10
    Date: 2014
  32. By: Schmitz, Hendrik; Stroka, Magdalena A.
    Abstract: Quality report cards addressing information asymmetry in the health care market have become a popular strategy used by policymakers to improve the quality of care for elderly. Using individual level data from the largest German sickness fund merged with institutional level data, we examine the relationship between nursing home quality, as measured by recently introduced report cards, nursing home prices, nursing home's location and the individual choice of nursing homes. Report cards were stepwise introduced as of 2009 and we use a sample of 2010 that includes both homes that had been evaluated at that time and that had not yet been. Thus, we can distinguish between institutions with good and bad ratings as well as non-rated nursing homes. We find that the probability of choosing a nursing home decreases in distance and price. However, we find no significant effect of reported quality on individuals' choice of nursing homes.
    Abstract: Auf Basis der im Jahr 2009 in Deutschland eingeführten Pflegenoten, mithilfe derer eine Differenzierung in über- und unterdurchschnittlich gut bewertete Einrichtungen sowie Heime ohne Qualitätsinformationen vorgenommen werden kann, wird im vorliegenden Artikel die Rolle von Qualitätsinformationen bei der individuellen Wahl einer Pflegeeinrichtung analysiert. Ziel des Artikels ist es, die Frage zu beantworten, ob Individuen über- bzw. unterdurchschnittlich gut bewertete Heime gegenüber Einrichtungen ohne Qualitätsinformationen vorziehen bzw. vermeiden. Daneben wird die Rolle des Preises und der Distanz zum bisherigen Wohnort bei der Wahl der stationären Pflegeeinrichtung untersucht. Die Analyse basiert auf den Routinedaten Deutschlands größter Krankenkasse, der Techniker Krankenkasse, die mit weiteren administrativen Daten zu den betrachteten Einrichtungen verknüpft wurden. Die Ergebnisse der Untersuchung zeigen, dass sowohl mit steigender Distanz zum bisherigen Wohnort als auch mit steigenden Preisen die Wahrscheinlichkeit der Wahl eines Heimes sinkt. Hingegen wirken sich weder positive noch negative Qualitätssignale auf die Wahl des Pflegeheimes aus.
    Keywords: nursing home choice,quality report cards,quality information,demand
    JEL: I10
    Date: 2014
  33. By: Stroka, Magdalena A.
    Abstract: This study evaluates the mental and physical strain experienced by informal caregivers. Econometric problems due to individuals selecting themselves into informal care provision are tackled by using informative and detailed data from the largest sickness fund in Germany and applying propensity score matching techniques. The findings suggest that carers take more psychoactive drugs as well as analgesics and gastrointestinal agents. Thus, informal caregiving appears to be a burdensome task with implications for both mental and physical health.
    Abstract: Die vorliegende Studie verfolgt das Ziel der Aufdeckung von Opportunitätskosten die mit der Erbringung der informellen Pflege Angehöriger einhergehen und sich in der Verschlechterung des Gesundheitszustandes der pflegenden Personen äußern. Hierzu werden die Routinedaten Deutschlands größter Krankenkasse verwendet. Unter Rückgriff auf die Methode des Propensity Score Matchings liefert die Untersuchung Evidenz für eine höhere Einnahme von Psychopharmaka sowie Schmerz- und Verdauungsmitteln durch informelle Pfleger im Vergleich zu Personen ohne Pflegeverpflichtungen. Es scheint also, als dass informelle Pflege sowohl mit mentaler als auch physischer Gesundheitsbelastung einhergeht.
    Keywords: informal care,burden,drugs,propensity score matching
    JEL: I10
    Date: 2014

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