nep-age New Economics Papers
on Economics of Ageing
Issue of 2015‒09‒26
twelve papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Cultural and Ethnic Differences in the Transitions from Work to "Retirement" of Rural Elders in China's Minority Regions By Connelly, Rachel; Maurer-Fazio, Margaret
  2. Spouses’ retirement and the take-up of disability pension By Johnsen, Julian V.; Vaage, Kjell
  3. Impacts of Leaving Paid Work on Health, Functions, and Lifestyle Behavior: Evidence from JSTAR panel data By HASHIMOTO Hideki
  4. Age of Decision: Pension Savings Withdrawal and Consumption and Debt Response By Sumit Agarwal
  5. Pension reforms in the 1990s and during the financial crisis: More of the same? By Grech, Aaron George
  6. The Politics of Pensions By Anzia, Sarah; Moe, Terry
  7. What makes people anxious about life after the age of 65? Evidence from international survey research in Japan, the United States, China, and India By Yoshihiko Kadoya
  8. Population Ageing and Its Effects on the German Economy By Dirk Ulbricht; Dmitry Chervyakov
  9. Monitoring and Assessment Framework for the European Innovation Partnership on Active and Healthy Ageing (MAFEIP) - Conceptual description of the Monitoring and Assessment Framework for the EIP on AHA By Fabienne Abadie; Christian Boehler
  10. Impact of gender aspect on self-perceived quality of life of elderly By Ghosh, Dona
  11. Estimation of Mode Effects in the Health and Retirement Study using Measurement Models By Cernat, Alexandru; Couper, Mick P.; Ofstedal, Mary Beth
  12. The Roles of Governance in Co-Evolutionary and Transformative Change - The Case of Active Ageing By M. Bugge , Markus; Coenen, Lars; Branstad, Are

  1. By: Connelly, Rachel (Bowdoin College); Maurer-Fazio, Margaret (Bates College)
    Abstract: This paper considers the work to "retirement" transitions of the rural elders in China who reside in seven regions with substantial minority populations. The data employed, those of the China Household Ethnicity Survey, are ideal for examining the effect of cultural differences on this key lifecycle event, the reduction of market-oriented work with age. Membership in particular ethnic minority groups is used to proxy the potential differences in the culture of aging and caregiving. We find that beyond education, the strongest predictors of labor force participation for China's rural elders are age, disability, widowhood, and ethnic minority status. The effects of ethnic minority group status on labor force participation are robust and the differences in participation among ethnic groups are sometimes large. It is thus misleading, in the analysis of the labor force participation of China's rural elders, to simply dichotomize ethnic minority and majority (Han) group membership. Further careful research is needed to help understand the differences in perceptions of aging among China's rural ethnic minority groups.
    Keywords: ethnicity, retirement, labor force participation, elders, aging, China Household Ethnicity Survey
    JEL: J14 J15 J16 J26 D13 O53
    Date: 2015–09
  2. By: Johnsen, Julian V. (Department of Economics, University of Bergen); Vaage, Kjell (Department of Economics, University of Bergen)
    Abstract: This paper studies the effect of one spouse’s retirement on the Retirement of the other using a Norwegian early reform, which reduced the retirement age for workers in selected firms. The findings indicate that after the reform, the spouses of those who could retire earlier were less likely to remain in the workforce compared to the spouses of those who were not included in the early retirement scheme. This finding is compatible with preferences for shared spousal leisure. Contrary to previous findings, wives respond to husbands’ early retirement decisions. However, the findings are less conclusive with respect to husbands’ response to wives’ early retirement decisions. An investigation of the responding wives’ labor market exit strategy reveals that the reform increased their likelihood of retiring with a disability pension, representing a cost to public finance incurred in addition to the general retirement costs. This study contributes to other recent evidence on the influence of of non-health-related factors on the use of disability benefits among older workers.
    Keywords: Joint retirement; disability pension; older workers
    JEL: D04 H55 J14 J26
    Date: 2015–09–24
  3. By: HASHIMOTO Hideki
    Abstract: Despite extensive research published in economic, psychological, and public health literature, a consensual view on the causal influence of leaving paid work on health, functions, lifestyle behavior, and social participation has not been reached. Recent review studies indicate that heterogeneous characteristics of the pre-retired should be accounted for to reveal the impact of leaving paid work. Related evidence is scarce in Japan where the effective retirement age is the highest among developed countries. We used panel data from the Japanese Study of Aging and Retirement (JSTAR) to fill this knowledge gap. Using propensity-matching difference-in-difference estimation stratified by age strata (under 65 vs. 65 and over), gender, and job characteristics, we find that transitioning from paid work status to retirement exerts limited impact on cognitive function, mobility, smoking behavior, body mass index, psychological distress, hypertension prevalence, fruit intake, and social participation to voluntary services. However, some segments of older people seem more vulnerable to specific impacts, e.g., men formerly engaged in white-collar jobs and secured jobs, or older women with unsecured jobs showed a negative impact on cognitive function, while men with stressful jobs show a reduced prevalence of hypertension after retirement. We argue that the heterogeneity of the population at retirement age should be considered to specify causal pathways and policy implications of health impacts after leaving paid work more effectively.
    Date: 2015–09
  4. By: Sumit Agarwal (NUS)
    Abstract: This paper uses a unique panel of consumer financial transactions to examine how aging consumers respond to the option to cash out retirement savings. To obtain causal identification, we exploit an administrative regulation in Singapore that allows individuals to cash out a fraction of their pension savings at age 55. We find a large and highly significant increase in bank account balances when an individual turns 55, suggesting that the average consumer in our sample withdraws a large portion of their eligible retirement savings. In line with the predictions from the life-cycle/permanent-income hypothesis, we find modest increases (about 9 percent of the increase in account balance) in cumulative total spending twelve months later. This increase is driven largely by an increase in debit card spending and is concentrated among low-liquidity consumers. Consumers also use the increase in disposable income to pay down their credit card debt. We do not find any evidence that the average consumer responds by excessively increasing present consumption at the expense of future financial security. Nevertheless, consumers leave a sizeable portion of their withdrawn savings in low-interest accruing bank accounts for at least a year after withdrawal. We provide some suggestive evidence that consumer demographics, especially those related to financial literacy and sophistication, appear to matter for consumers' withdrawal decisions.
    Date: 2015
  5. By: Grech, Aaron George
    Abstract: Many EU countries have been carrying out substantial pension reforms since the mid-1990s. This article studies whether the reforms that were carried out in ten EU countries before and after the financial crisis of 2008 are different. This is done through an analysis of the different elements of these reforms and also by comparing entitlements of statutory pension systems after each set of reforms. The main conclusion is that the pre-crisis reforms were much stronger and had a more negative impact on women than the post-crisis reforms. It is harder to determine whether this represents a temporary break in the reform process or a permanent change in the orientation of pension reforms in these ten countries.
    Keywords: Social Security and Public Pensions; Retirement; Poverty; Retirement Policies
    JEL: H55 I38 J26
    Date: 2015–09
  6. By: Anzia, Sarah; Moe, Terry
    Abstract: For decades, America’s state and local governments have promised their workers increasingly generous pensions but failed to fully fund them, producing a fiscal problem of staggering proportions. In this paper, we examine the politics of public pensions. While it might seem obvious that the pension problem is due to Democrats and unions pushing for generous pensions over Republican resistance, we develop a theory—rooted in voters, interest groups, and myopic politicians—to argue that, during normal times, we should expect both parties to support generous (and underfunded) pensions, and thus to be responsible for the larger problem. It is only after the onset of the Great Recession, which disrupted normalcy by expanding the scope of conflict, that we should expect partisan conflict. Using a new dataset of state legislators’ votes on hundreds of pension bills passed between 1999 and 2011, we carry out an empirical analysis that supports these expectations.
    Keywords: Social and Behavioral Sciences
    Date: 2013–12–01
  7. By: Yoshihiko Kadoya
    Abstract: This study investigated the causes of people's anxieties about life after the age of 65 years, using household data from countries with different social contexts: Japan, the United States, China, and India. This research added contextual aspects to the literature on social security and precautionary savings. An ordered probit model was used to establish the causes of anxiety and a generalized structural equation model was used to check the robustness of the results. This study uncovered three major findings. First, anxiety levels about life at an older age partly depend on people's views of the future. Second, high financial status lessens people's anxiety levels only if prices are stable. Third, living with a child, contrary to expectations, does not necessarily lessen people's concerns about life after 65.
    Date: 2012–06
  8. By: Dirk Ulbricht; Dmitry Chervyakov
    Abstract: The latest long-term projection of Germany’s population implies a clear trend: even though slight growth is expected over the next decade, a decline in the future is almost inevitable. Furthermore, an ageing society combined with a low fertility rate will lead to massive shrinkage of the working-age population. What are the social and economic consequences of these developments? Is a decline in economic growth unavoidable? We present the results of the long-term population projection and summarize the various effects population ageing may have on Germany.
    Date: 2015
  9. By: Fabienne Abadie (European Commission – JRC - IPTS); Christian Boehler (European Commission – JRC - IPTS)
    Abstract: After having identified a short list of candidate indicators for assessing the impact of the European Innovation Partnership on Active and Healthy Ageing (EIP on AHA) in the first and second reports on outcome indicators for MAFEIP, the next step in this project was to develop a quantitative approach that could be suited to establishing a link between candidate indicators and the EIP on AHA objectives. This report therefore conceptualises a model for estimating the impact of the Partnership's activities on its targets for health and sustainability of health and care system using the outcome indicators that were previously identified. In accordance with the EIP on AHA headline target of increasing the average healthy life expectancy of European citizens by two years by 2020, we took the methods to calculate Healthy Life Years (HLY) as a starting point, but adapted them to better accommodate the needs of MAFEIP. The rationale for this adaptation was to ensure the resulting model can adequately estimate the health impacts achieved by EIP on AHA commitments, and also to utilise data on indicators that are most frequently reported across EIP on AHA participants. The resulting model is based on a Markov process with three generic health states ('baseline health', 'deteriorated health' and 'death'), which can draw upon data from primary and secondary outcome indicators across populations, interventions, commitments and geographic domains. We discuss how the model's flexibility that allows it to be applied to different contexts could be enhanced further through the optional inclusion of additional health states or extensions for incorporating additional secondary indicators. We also discuss how to use the model for estimating the impact of activities delivered within the EIP on AHA on the sustainability of health and care systems in terms of the incremental impact of the interventions on health and care expenditure. We propose that the model should be implemented as a web-based monitoring tool to enable stakeholders within commitments to independently assess the impact of their respective interventions on health and sustainability of health and care systems, with the support and guidance of IPTS.
    Keywords: EIP, Active and Healthy Ageing, EIP on AHA, indicators, monitoring, framework
    JEL: I11 I18 O33 O38
    Date: 2015–05
  10. By: Ghosh, Dona
    Abstract: Quality of Life (QoL) is a complex, scattered and multidimensional approach that depends on an extensive set of biological to psychological indicators passing through various socio-economic interactions. It induces enormous heteroscedasticity among individuals in the way of ageing and spurs difference in each elderly from the other. Most of the researchers attempted either to identify indicators or develop indexes to channelize the multidimensionality towards measuring subjective appraisal of QoL but in depth analysis especially, regarding perception of female elderly is missing, even in the era of feminization of ageing i.e. increasing number of female elderly to old age, particularly in mostly and second mostly populated countries like China and India. This study mainly focuses on the gender dimension along with various socio-economic and health constructs in China and India. There are two objectives. Firstly, to analyze the difference across gender with respect to self-perceived Quality of Life (QoL) in different socio-economic and health related contexts. Secondly, to find out the determinants of QoL and try to find out whether sex is an important factor in this regard. The first section of the study consists of the descriptive statistics across gender in both the countries according to their subjective QoL, which is measured on a five point likert scale and further reduced in a trichotomous scale: Good, Moderate and Poor. In the second section Ordered Logit Regression Model has been adopted. Moreover, in determining the control variables three indexes (co-morbidity index, active daily work index and mood index) have been formulated. In both the countries females have a higher percentage to report about moderate, poor or very poor QoL, while men mostly reported very good or good QoL. The results show that age, active of daily work index, mood index and co-morbidity index have significant impact on QoL. Moreover, for females, the odds of poor QoL versus the combined moderate and good are 0.07597 times lower than for males, given the other variables are held constant.
    Keywords: Quality of Life; Gender; Active Daily Work Index; Co-morbidity Index; Mood Index
    JEL: I14
    Date: 2015–08–24
  11. By: Cernat, Alexandru; Couper, Mick P.; Ofstedal, Mary Beth
    Date: 2015–09–22
  12. By: M. Bugge , Markus (NIFU Nordic Institute for Studies in Innovation, Research and Education); Coenen, Lars (CIRCLE, Lund University, NIFU Nordic Institute for Studies in Innovation, Research and Education, Fellow at the strategic theme Institutions of Utrecht University, the Netherlands); Branstad, Are (Buskerud and Vestfold University College (HBV))
    Abstract: Addressing the need for a better understanding of how policy can target grand challenges, this paper applies a multi-level perspective (MLP) on socio-technical transitions onto current transformation processes in health care and active ageing. The objective of the paper is to improve our understanding of the roles and challenges for policy in this system shift, when perceived and conceptualized through the lens of an MLP perspective. In this way the paper seeks to a) contribute to an improved understanding of the co-evolutionary processes of transformative change in health care; and b) to examine the roles and tensions of governance and coordination of such processes in particular.
    Keywords: co-evolution; multi-level perspective; governance; health care; active ageing
    JEL: I15 O38
    Date: 2015–09–11

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