|
on Economics of Ageing |
nep-age is sponsored by the Journal
of the Economics of Ageing, the top international
academic outlet for original theoretical and empirical research
dealing with the interaction between demographic change and the
economy. We welcome your submissions at
http://journals.elsevier.com/the-journal-of-the-economics-of-ageing/
.
|
| By: | Joseph F. Quinn (Boston College); Kevin E. Cahill (Sloan Center on Aging & Work at Boston College) |
| Abstract: | We have entered a new world of retirement income security in America, with older individuals more exposed to market risk and more vulnerable to financial insecurity than prior generations. This reflects an evolution that has altered the historical vision of a financially-secure retirement supported by Social Security, a defined-benefit pension plan, and individual savings. Today, two of these three retirement income sources — pensions and savings — are absent or of modest importance for many older Americans. Retirement income security now often requires earnings from continued work later in life, which exacerbates the economic vulnerability of certain segments of the population, including persons with disabilities, the oldest-old, single women, and individuals with intermittent work histories. Because of the unprecedented aging of our society, further changes to the retirement income landscape are inevitable, but policymakers do have options to help protect the financial stability of older Americans. We can begin by promoting savings at all (especially younger) ages and by removing barriers that discourage work later in life. For individuals already on the cusp of retirement, more needs to be done to educate the public about the value of delaying the receipt of Social Security benefits. Inaction now could mean a return to the days when old age and poverty were closely linked. The negative repercussions of this outcome would extend well beyond traditional economic measures, as physical and mental health outcomes are closely tied to financial security. |
| Keywords: | Retirement Income Security, Economics of Aging, Gradual Retirement, Vulnerable Populations, Work and Retirement |
| Date: | 2015–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:887&r=age |
| By: | Siobhan Austen (School of Economics and Finance, Curtin University); Rachel Ong (Bankwest Curtin Economics Centre, Curtin University) |
| Abstract: | This paper identifies the broad issues associated with the use of home equity to fund the consumption needs of retirees by reviewing the relevant international literature.The specific literature that examines the role of home equity in the retirement income system deals with attempts by government to shift a greater share of latelife costs onto households. An important part of this literature examines the broad economic consequences of shifting away from a public retirement income system, which features, for example, a partially funded age pension. Other relevant literature considers the decisions older households make about the use of their home equity and other financial assets to fund their consumption needs in retirement. This paper’s review highlights important issues that must be considered in a policy change directed toward increasing the use of housing assets to fund consumption needs in retirement. These include the need to obtain a clear picture of the capacity of households to achieve meaningful improvements in their retirement income by accessing their housing, acknowledging the preference of elderly households to hold onto their home equity rather than draw down on it, and accounting for the risks and costs of encouraging households to access their home equity to fund their general consumption needs in retirement. |
| Keywords: | Home equity, consumption, retirement income, annuities, risks |
| JEL: | J14 D31 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:ozl:bcecwp:wp1505&r=age |
| By: | Marcel Lever; Ilja Boelaars (University of Chicago); Ryanne Cox (DNB); Roel Mehlkopf (DNB; Netspar) |
| Abstract: | This paper measures how financial shocks - equity market, interest rate or inflation shocks - affect different generations of participants in pension schemes. We show that an individual scheme, by using a life cycle investment strategy, can largely replicate the allocation of traded risks across generations of a collective pension scheme that gradually adjusts pensions after financial shocks. Collective schemes can shift some financial risk to generations that will participate in the future, whereas individual accounts cannot. In the current institutional setting this shift of traded risk in collective contracts to future generations is limited. Collective pension schemes are able to reallocate non-traded risks among the participants to obtain a more efficient distribution of risk across generations. In schemes with individual accounts, risk sharing is limited to risks traded on financial markets. |
| JEL: | D91 G11 G23 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:317&r=age |
| By: | Peter B. Berg; Mary K. Hamman; Matthew M. Piszczek; Christopher J. Ruhm |
| Abstract: | In the coming years, a substantial portion of Germany’s workforce will retire, making it difficult for businesses to meet human capital needs. Training older workers may be a successful strategy for managing this demographic transition. This study examines relationships between establishment training programs, wages, and retirement among older men and women. Using unique matched establishment-employee data from Germany, the authors find that when establishments offer special training programs targeted at older workers, women—and especially lower wage women—are less likely to retire. Results suggest this relationship may be due to greater wage growth. For men, findings suggest establishment offer of inclusion in standard training programs may improve retention of low wage men, but analysis of pre-existing differences in establishment retirement patterns suggests this relationship may not be causal. Our research suggests targeted training programs likely play an important role in retaining and advancing careers of low wage older women. |
| JEL: | J15 J18 J2 J21 J24 J26 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21746&r=age |
| By: | Alan L. Gustman; Thomas L. Steinmeier; Nahid Tabatabai |
| Abstract: | The composition, wealth and employment of male veterans and nonveterans are analyzed for four cohorts from the Health and Retirement Study, ages 51 to 56 in 1992, 1998, 2004 and 2010. Half of the men in the two oldest cohorts served in the military. Only 16 percent of the men in the youngest cohort, the only cohort subject to the All-Volunteer Military, served. One fifth to one third of the members of each cohort who served saw combat, mainly in Viet Nam and in the First Gulf War. Among those 51 to 56 in 1992, veterans were better educated, healthier, wealthier, and more likely to be working than nonveterans. By the 2010 cohort, 51 to 56 year old veterans had lost their educational advantage over nonveterans, were less healthy, less wealthy and less likely to be working. After standardizing in multiple regressions for the influence of major observable characteristics, for the original 1992 HRS cohort the wealth of veterans is no longer higher than the wealth of nonveterans. In contrast, the wealth of veterans from the youngest cohort, those 51 to 56 in 2010, remains about 10 to 13 percent below the wealth of nonveterans from that cohort. There also is a decline from older to younger cohorts of veterans compared to nonveterans in the probability of being not retired, of working more than 35 hours per week, and in the likelihood of holding a job for more than 10 years. Comparisons are made within the group of veterans by years of service, officer rank and other covariates. |
| JEL: | D31 E21 H55 J14 J26 J32 J45 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21736&r=age |
| By: | Gopi Shah Goda; John B. Shoven; Sita Slavov |
| Abstract: | We examine the connection between taxes paid and benefits accrued under the Social Security Disability Insurance (SSDI) program on both the intensive and extensive margins. We perform these calculations for stylized workers given the existing benefit structure and disability hazard rates. On the intensive margin, we examine the effect of an additional dollar of earnings on the marginal payroll taxes contributed and future benefits earned. We find that the present discounted value of disability benefits received from an additional dollar of earnings, net of the SSDI payroll tax, generally declines with age, becoming negative around age 40 and reaching almost zero at age 63. On the extensive margin, we determine the effect of working an additional year on the additional payroll taxes and future benefits as a percentage of income. The return to working an additional year at an income level just large enough to earn Social Security credits for the year is large and positive through age 60. However, the return to working an additional full year is substantially smaller and becomes negative at approximately age 57. Thus, older workers face strong incentives to earn enough to obtain creditable coverage through age 60, but they face disincentives for additional earnings. In addition, workers ages 61 and older face work disincentives at any level of earnings. We repeat this analysis for stylized workers at different levels of earnings and find that, while the program transfers resources from high earners to low earners, the workers experience similar patterns in the returns to working. |
| JEL: | H31 H53 J22 J26 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21708&r=age |
| By: | Pfutze,Tobias; Rodriguez Castelan,Carlos |
| Abstract: | One of the primary motivations behind the establishment of noncontributory pension programs is to allow beneficiaries to retire from the labor force. Yet, as with other unconditional cash transfer schemes, their aggregate effects may be more complex. Using panel data and instrumental variable techniques, this paper shows that the effect of one such program, Colombia Mayor, has been to raise the labor force participation of relatively younger male beneficiaries. This increase occurred precisely in the occupations with characteristics that are likely to require some up-front investment. The paper concludes that the transfer effectively loosened the liquidity constraints to remaining in these occupations. However, no such effect is found among women or older beneficiaries. |
| Keywords: | Labor Markets,Population Policies,Poverty Monitoring&Analysis,Debt Markets,Labor Policies |
| Date: | 2015–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7516&r=age |
| By: | Damon Morris (Department of Economics, University of Sheffield); Ian Gregory-Smith (Department of Economics, University of Sheffield); Brian Main (Business School, University of Edinburgh); Alberto Montagnoli (Department of Economics, University of Sheffield); Peter Wright (Department of Economics, University of Sheffield) |
| Abstract: | This paper evaluates the impact of the ‘A-day’ pensions simplification legislation introduced in the UK in 2006. This reform exogenously affected the cost of pension provision for firms whose executives had accumulated pensions benefits in excess of the prescribed limit. We find a strong reaction in the form of pension provision in a sample of UK executive directors. After A-day, many executives saw their defined benefit scheme replaced with supplementary cash payments. This had the unintended consequence of significantly decreasing the relationship between executive pay and firm performance for those executives affected by the reform. |
| Keywords: | Executive compensation; Executive pensions; Pay for Performance; A-day |
| JEL: | J32 J33 M12 M52 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2015026&r=age |
| By: | Andrea Wysocki; Mary Butler; Robert L. Kane; Rosalie A. Kane; Tetyana Shippee; François Sainfort |
| Abstract: | Despite a shift from institutional services toward more home and community-based services (HCBS) for older adults who need long-term services and supports (LTSS), the effects of HCBS have yet to be adequately synthesized in the literature. |
| Keywords: | comparative effectiveness review , home- and community-based services , nursing homes |
| JEL: | I |
| Date: | 2015–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:30503869a2a744d387ea9ac13203592e&r=age |