nep-age New Economics Papers
on Economics of Ageing
Issue of 2015‒10‒25
eight papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Demographics and the Secular Stagnation Hypothesis in Europe By Favero, Carlo A.; Galasso, Vincenzo
  2. Gradual Retirement, Financial Incentives, and Labour Supply of Older Workers: Evidence from a Stated Preference Analysis By Elsayed, Ahmed; de Grip, Andries; Fouarge, Didier; Montizaan, Raymond
  3. Population aging and households? saving in the Russian Federation By Bussolo,Maurizio; Simone,Schotte; Matytsin,Mikhail
  4. Pension System of Belarus: Current State and Necessity for Reforms By Kateryna Bornukova; Katerina Lisenkova; Anastasia Luzgina
  5. The 2011 Pension Reform in Italy and its Effects on Current and Future Retirees By Flavia Coda Moscarola; Margherita Borella
  6. Challenges for European Welfare States By Börsch-Supan, Axel
  7. Rational pension policies By Börsch-Supan, Axel
  8. Trends in Firm Entry and New Entrepreneurship in Canada By Shutao Cao; Mohanad Salameh; Mai Seki; Pierre St-Amant

  1. By: Favero, Carlo A.; Galasso, Vincenzo
    Abstract: Demographic trends in Europe do not support empirically the secular stagnation hypothesis. Our evidence shows that the age structure of population generates less long-term growth but positive real rates. Policies for growth become very important. We assess the relevance of the demographic structure for the choice between macro adjustements and structural reforms. We show that middle aged and elderly individuals have a more negative view of reforms, competitiveness and globalization than young. Our results suggest that older countries -- in terms of share of elderly people -- should lean more towards macroeconomic adjustments, whereas younger nations will be more supportive of structural reforms.
    Keywords: Europe; growth; real interest rates; stochastic mortality
    JEL: J11 J14
    Date: 2015–10
  2. By: Elsayed, Ahmed (IZA); de Grip, Andries (ROA, Maastricht University); Fouarge, Didier (ROA, Maastricht University); Montizaan, Raymond (ROA, Maastricht University)
    Abstract: Using data from a stated preferences experiment in the Netherlands, we find that replacing full-time pension schemes with schemes that offer gradual retirement opportunities induce workers to retire one year later on average. Total life-time labour supply, however, decreases with 3.4 months because the positive effect of delayed retirement on labour supply is cancelled out by the reduction in working hours before full retirement. The impact of gradual retirement schemes is, however, heterogeneous across groups of workers. Workers with non-routine job tasks retire at a later age when they can gradually retire. Financial incentives, either in terms of changing pension income or the price of leisure, also affect the expected retirement age, but the impact of these financial incentives does not differ with the possibility of gradual retirement. Finally, we find that gradual retirement is not a preferred option among workers as the large majority still prefers full retirement. This especially holds for workers with a lower wage and those with higher life expectancy.
    Keywords: gradual retirement, labour supply, financial incentives
    JEL: J14 J26
    Date: 2015–10
  3. By: Bussolo,Maurizio; Simone,Schotte; Matytsin,Mikhail
    Abstract: Using household data from the Russian Longitudinal Monitoring Survey, this paper assesses how aging affects saving. To overcome a systematic bias against the life-cycle hypothesis of survey data, the paper estimates how the age profile of saving changes when the micro data are corrected to account for the contribution to pensions (as additional saving) and receipt of benefits from pensions (as dissaving). With these corrections, the Russian data support the life-cycle hypothesis. A small decline in the aggregate saving rate, because of aging, can thus be expected. However, since aggregate saving rates result from a combination of age and cohort effects, this decline may not be significant. When extrapolating the rising trends of the cohort effect, the fact that younger generations are earning and saving more than older generation at the same age, the projection shows a growing aggregate saving rate. The changes in saving of future cohorts, for example because of changes in the growth rate of the economy, can affect the aggregate saving rate even more than aging.
    Keywords: Science Education,Economic Theory&Research,Debt Markets,Banks&Banking Reform,Emerging Markets
    Date: 2015–10–15
  4. By: Kateryna Bornukova (Belarusian Economic Research and Outreach Center (BEROC)); Katerina Lisenkova (National Institute of Economic and Social Research); Anastasia Luzgina (Belarusian Economic Research and Outreach Center (BEROC))
    Abstract: The pension system of Belarus is inherited from USSR. It is gender-biased and does not contribute to economic development. Obsolescence of the system and demographic situation in Belarus make pension system reforms inevitable. Under the current pension system the deficit of the Pension fund will reach 1.8% of GDP by 2020. Transition to the fully-funded pension system is not possible until macroeconomic stabilization is achieved. In the medium term only parameters of current pension system can be reformed. Equating of retirement age of females and males with gradual increase of pension age to 65/65 is the most effective measure among all available alternatives. It will provide not only the financial stability of the Pension fund, but will also increase labor force participation, which will become the engine of economic growth.
    Date: 2015–09
  5. By: Flavia Coda Moscarola (University of Turin and CeRP-Collegio Carlo Alberto); Margherita Borella (University of Turin and CeRP-Collegio Carlo Alberto)
    Abstract: TWe analyse the effects of the pension reform of 2011 on individuals’ retirement age, adequacy and distribution of the benefits for various categories of Italian workers. The main findings are an increase in the average retirement age, generally raising over time, coupled with a sizeable increase in average replacement rates. However, the most affected group is represented by women employees born in 1955 and retiring in the period 2012-2021, who face an average increase in retirement age of four years, while benefiting from an increase in the average replacement rate of thirteen percentage points.
    Date: 2015–09
  6. By: Börsch-Supan, Axel (Munich Center for the Economics of Aging (MEA))
    Abstract: In the absence of social security reform, current pension entitlements of an aging population exceed future fiscal capacity. However, structural labor market reforms facilitate the transition to sustainable schemes in which a sizeable part of the current generosity of European welfare states can be maintained. In fact, many European states have already taken important steps in this direction. In the end insufficient productive capacities to support the welfare state pose smaller challenges to reform than do time inconsistencies built into the political process of redesigning pension plans.
    Date: 2015–08–01
  7. By: Börsch-Supan, Axel (Munich Center for the Economics of Aging (MEA))
    Abstract: Aim of this keynote is to develop a framework how to approach the design of pension policies as rationally as possible. The first step is to realize and accommodate endogenous adjustments. The second step is to align the root causes of demographic change with corresponding reform steps which include but are not confined by pension reform. The third step is to separate the issues as best as possible to strengthen the political feasibility of reform. The paper shows that relatively few and moderate reform steps suffice to solve the demographic problem in countries such as Germany and Switzerland. This is in striking contrast to the widespread resistance to reform. We falsify some of the myths, prejudices and misperceptions which make reforms politically so hard to put into place.
    Date: 2015–09–08
  8. By: Shutao Cao; Mohanad Salameh; Mai Seki; Pierre St-Amant
    Abstract: Recently released data show downward trends for both the firm entry rate and the rate of new entrepreneurship since the early 1980s in Canada. This paper documents these trends and discusses potential explanations. A shift-share analysis suggests that changes to Canada’s industrial and demographic structures cannot explain the long-term downward trends, although population aging accounts for part of the decline in new entrepreneurship since around 2000. The paper also discusses other factors potentially contributing to the downward trends: increased industrial concentration, changing labour market conditions, an increased college wage premium and higher student debt. In-depth analysis of these factors is left for future research.
    Keywords: Firm dynamics; Market structure and pricing; Productivity
    JEL: L11 M13
    Date: 2015

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