nep-age New Economics Papers
on Economics of Ageing
Issue of 2016‒02‒17
25 papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Inequality and Defined Benefit Pensions when Life Expectancy is Heterogeneous By Kemptner, Daniel; Haan, Peter; Prowse, Victoria
  2. Skill biased labour demand and the wage growth of younger workers: Evidence from an unexpected pension reform By Danzer, Alexander
  3. Seniority Wages and the Role of Firms in Retirement By Frimmel, Wolfgang; Horvath, Thomas; Schnalzenberger, Mario; Winter-Ebmer, Rudolf
  4. Are Japanese Men of Pensionable Age Underemployed or Overemployed? By Usui, Emiko; Shimizutani, Satoshi; Oshio, Takashi
  5. Fiscal Sustainability and Demographic Change: A Micro Approach for 27 EU Countries By Dolls, Mathias; Doorley, Karina; Paulus, Alari; Schneider, Hilmar; Siegloch, Sebastian; Sommer, Eric
  6. The Health Implications of Social Pensions: Evidence from China's New Rural Pension Scheme By Cheng, Lingguo; Liu, Hong; Zhang, Ye; Zhao, Zhong
  7. The emergence of redistributive pensions in the developing world By Neugart, Michael; Kemmerling, Achim
  8. Do age complementarities affect labour productivity? Evidence from German firm level data By Peters, Cornelius
  9. Working Time Reductions at the End of the Career: Do They Prolong the Time Spent in Employment? By Albanese, Andrea; Cockx, Bart; Thuy, Yannick
  10. Education, lifetime labor supply, and longevity improvements By Fürnkranz-Prskawetz, Alexia; Sanchez-Romero, Miguel; d'Albis, Hippolyte
  11. Does Raising the Early Retirement Age Increase Reemployment of Older Unemployed Workers? By Giesecke, Matthias; Kind, Michael
  12. Pension programs around the world: determinants of social pension By Rudolph, Alexandra; Priebe, Jan
  13. Aging and Urban House Prices By Lerbs, Oliver; Hiller, Norbert
  14. Biased Survival Beliefs, Psychological and Cognitive Explanations, and the Demand for Life Insurances By Grevenbrock, Nils; Groneck, Max; Ludwig, Alexander; Zimper, Alexander
  15. Greying the Budget: Ageing and Preferences over Public Policies By de Mello, Luiz; Schotte, Simone; Tiongson, Erwin R.; Winkler, Hernan
  16. Social Insurance with Competitive Insurance Markets and Risk Misperception By Cremer, Helmuth; Roeder, Kerstin
  17. Informelle Pflege und Arbeitsmarktpartizipation By Stroka, Magdalena; Lindner, Roland
  18. The ability to pay for long-term care in the Netherlands: a life-cycle perspective By Harry ter Rele; Arjen Hussem; Casper van Ewijk; Albert Wong
  19. Micro and Macro Determinants of Health: Older Immigrants in Europe By Constant, Amelie F.; García-Muñoz, Teresa; Neuman, Shoshana; Neuman, Tzahi
  20. Composition matters! Wage inequality and the demographic and educational structure of the labor force in Germany By Weigert, Benjamin; Klemm, Marcus
  21. On the Distributional Implications of Demographic Change By Geppert, Christian
  22. Evaluating the Impact of Employment Protection on Firm-Provided Training in an RDD Framework By Bolli, Thomas; Kemper, Johanna
  23. Long-term care reform and the labor supply of household members - evidence from a quasi-experiment By Korfhage, Thorben; Geyer, Johannes
  24. Seniority Rules, Worker Mobility and Wages: Evidence from Multi-Country Linked Employer-Employee Data By Böckerman, Petri; Skedinger, Per; Uusitalo, Roope
  25. Do elderly choose nursing homes by quality, price or location? By Stroka, Magdalena; Schmitz, Hendrik

  1. By: Kemptner, Daniel; Haan, Peter; Prowse, Victoria
    Abstract: In this paper, we analyze how life expectancy-driven redistribution of income through a defined pension benefit system impacts on inequality in annual consumption. Our analysis combines a methodology that quantifies life expectancy-driven redistribution through the pension system with a structural life-cycle model in which labor supply, retirement and consumption decisions respond to changes in the pension system. Based on the estimated model, we show that the German pension system induces a large regressive redistribution of life-time income, and this redistribution increases inequality in average annual consumption. Behavioral responses to the pension system matter for the results. Increasing progressivity in pension contributions or pension benefits only partially offsets the life expectancy-driven redistribution via the pension system.
    JEL: C61 D31 H55
    Date: 2015
  2. By: Danzer, Alexander
    Abstract: Large-scale pension reforms can have redistributive wage effects across generations and education groups when the labour market suffers from skill mismatch. A quasi-experimental retirement shock in Ukraine illustrates the effect of labour scarcity on wage growth and returns to education: it reveals that young and well educated workers enjoyed significant wage growth accelerations while older workers with outdated skills did not benefit from the retirement of their comparable peers. The estimated wage effects are in line with predictions from a simple heterogeneous labour demand model applied to a cross-section of Ukrainian firms. The paper illustrates that general equilibrium wage effects can be estimated in a policy evaluation framework if quasi-experiments fulfil very restrictive preconditions.
    JEL: J20 J31 P23
    Date: 2015
  3. By: Frimmel, Wolfgang; Horvath, Thomas; Schnalzenberger, Mario; Winter-Ebmer, Rudolf
    Abstract: In general, retirement is seen as a pure labor supply phenomenon, but firms can have strong incentives to send expensive older workers into retirement. Based on the seniority wage model developed by Lazear (1979), we discuss steep seniority wage profiles as incentives for firms to dismiss older workers before retirement. Conditional on individual retirement incentives, e.g. social security wealth or health status, and personal fixed effects, the steepness of the wage profile will have different incentives for workers as compared to firms when it comes to the retirement date. Using an instrumental variable approach to account for selection of workers in our firms and for reverse causality, we find that firms with higher labor costs for older workers are associated with lower job exit age.
    JEL: J26 J31 H55
    Date: 2015
  4. By: Usui, Emiko (Hitotsubashi University); Shimizutani, Satoshi (Institute for International Policy Studies); Oshio, Takashi (Hitotsubashi University)
    Abstract: We investigate how Japanese men aged 60-74 adjust their workforce attachment after beginning to receive a public pension. Men who were employees at age 54 gradually move to part-time work or retire after beginning to receive pension benefits; those who continue working are more likely to be underemployed. Men self-employed at age 54, however, neither retire nor reduce their working hours even after beginning to receive pension benefits; these men are more likely to be overemployed. In contrast, U.S. men retire or move to part-time when they first claim Social Security; those who continue working as employees after Social Security starts are unlikely to be either over- or underemployed. Therefore, unlike U.S. men, Japanese men are not choosing the optimal pensionable age and labor hours to maximize their intertemporal utility.
    Keywords: Health and Retirement Study (HRS), pension benefits, Japanese Study on Aging and Retirement (JSTAR), work hours, hours constraints, Japan
    JEL: J26 I10 H55
    Date: 2015–12
  5. By: Dolls, Mathias (ZEW Mannheim); Doorley, Karina (LISER (CEPS/INSTEAD)); Paulus, Alari (ISER, University of Essex); Schneider, Hilmar (LISER (CEPS/INSTEAD)); Siegloch, Sebastian (University of Mannheim); Sommer, Eric (IZA)
    Abstract: The effect of demographic change on the labor force and on fiscal revenues is topical in light of potential pension shortfalls. This paper evaluates the effect of demographic changes between 2010 and 2030 on labor force participation and government budgets in the EU-27. Our analysis involves the incorporation of population projections, and an explicit modeling of the supply and demand side of the labor market. Our approach overcomes a key shortcoming of most existing studies that focus only on labor supply when assessing the effects of policy reforms. Ignoring wage reactions greatly understates the increase in fiscal revenues, suggesting that fiscal strain from demographic change might be less severe than currently perceived. Finally, as a policy response to demographic change and worsening fiscal budgets, we simulate the increase in the statutory retirement age. Our policy simulations confirm that raising the statutory retirement age can balance fiscal budgets in the long run.
    Keywords: demographic change, fiscal effects, labor supply, labor demand, pension systems
    JEL: H68 J11 J21
    Date: 2015–12
  6. By: Cheng, Lingguo (Shanghai University of Finance and Economics); Liu, Hong (Central University of Finance and Economics); Zhang, Ye (Nanjing University); Zhao, Zhong (Renmin University of China)
    Abstract: This paper estimates the causal effect of income on health outcomes of the elderly and investigates underlying mechanisms by exploiting an income change induced by the launch of China's New Rural Pension scheme (NRPS). Using this policy experiment, we address the endogeneity of pension income by applying a fixed-effect model with instrumental variable correction. The results reveal that pension enrollment and income from the NRPS both have had a beneficial impact on objective measures of physical health, cognitive function, and psychological well-being of the rural elderly, and also reduced mortality over a three-year horizon by 6 percentage points. Evidence further suggests that pension recipients respond to the new pension income in multiple ways: improved nutrition intake, better accessibility to health care, increased informal care, increased leisure activities, and better self-perceived relative economic situation. These in turn act as channels from pension income to health of the Chinese rural elderly.
    Keywords: pension income, health, channels, elderly, China
    JEL: H55 I12 I38 J14
    Date: 2016–01
  7. By: Neugart, Michael; Kemmerling, Achim
    Abstract: Pension schemes that redistribute money to the elderly have seen a remarkable surge in developing countries. To explain this phenomenon we build a political economy model of a Beveridgean pay-as-you-go social security system which incorporates family transfers driven by costs of non-compliance to a social norm. For appropriately chosen weights of a political support function a government will choose to increase pensions if the share of the urban population increases, productivity differentials between urban and rural workers widen, or if the social norm erodes.
    JEL: H55 D72 O18
    Date: 2015
  8. By: Peters, Cornelius
    Abstract: In Germany as in many other European countries there will be a shift in the age structure of the workforce in the next decades. The number of older workers will increase whereas the number of young and middle aged workers will decline. This paper provides evidence how the demographic ageing affects labor productivity. It focuses on age complementarities between workers. Using a cross sectional linked employer-employee data set from 2012 translog cost functions are estimated. To maintain consistency with microeconomic theory, several parameter constraints are imposed. To control for the skill level of the workers a nested production structure is applied. In addition, this allows to analyse the complementarities between different age groups by skill level. Based on the estimated parameters pairwise elasticities of complementarity and factor price elasticities are calculated. The results indicate that workers belonging to different age groups are complementary factors. The complementarities especially arise between young and medium aged workers and are higher within groups of high skilled labor. Simulating the expected shift in the age structure due to the demographic ageing indicates that the productivity of younger and middle aged workers will increase whereas the productivity of older workers will decline due to the complementary relationship between the different age groups.
    JEL: C31 D24 J11
    Date: 2015
  9. By: Albanese, Andrea (Ghent University); Cockx, Bart (Ghent University); Thuy, Yannick (Ghent University)
    Abstract: In this paper we study the effects on the survival rate in employment of a scheme that facilitates gradual retirement through working time reductions. We use information on the entire labour market career and other observables to control for selection and take dynamic treatment assignment into account. We also estimate a competing risks model considering different (possibly selective) pathways to early retirement. We find that participation in the scheme initially prolongs employment, as participants keep accumulating full pension rights. However, as participants become eligible for early retirement subsequently, these larger financial incentives induce them to leave the labour force prematurely. These adverse incentives are stronger for individuals who reduce their working time most. After two (four) years for men (women), the positive effects reverse. The more favourable effect for women is likely a consequence of their lower opportunities to enter early retirement. The gradual retirement scheme fails the cost-benefit test.
    Keywords: part-time work, older workers, Inverse Probability Weighting, dynamic selection into treatment, endogenous sampling
    JEL: J14 C22 J18 J22
    Date: 2015–12
  10. By: Fürnkranz-Prskawetz, Alexia; Sanchez-Romero, Miguel; d'Albis, Hippolyte
    Abstract: This paper presents an analysis of the differential role of mortality for the optimal schooling and retirement age when the accumulation of human capital follows the so-called "Ben-Porath mechanism". We set up a life-cycle model of consumption and labor supply at the extensive margin that allows for endogenous human capital formation based on Card (2001). This paper makes two important contributions. First, we provide the conditions under which a decrease in mortality leads to a longer education period and an earlier retirement age. Second, those conditions are decomposed into a Ben-Porath mechanism and a lifetimehuman wealth effect vs. the years-to-consume effect. Finally, using Swedish data for cohorts born between 1865 and 2000, we show that our model can match the empirical evidence.
    JEL: J10 J24 J26
    Date: 2015
  11. By: Giesecke, Matthias; Kind, Michael
    Abstract: This study examines an increase in the early retirement age from 60 to 63 for the group of older unemployed workers in Germany. The reform extends the distance to retirement for affected individuals by up to three years. We use this source of exogenous variation to estimate differences-in-differences of the reemployment hazard, thereby accounting for time-invariant unobserved heterogeneity and the possibility of competing risks. Previous to the estimation, we account for selection on observables by implementing matching based on entropy balancing. Our results indicate that - all other things equal - the sub-hazard of reemployment increases by 3.6% for each month by which the early retirement age is raised. The effect is large in absolute and relative terms and implies that unemployment as a pathway into early retirement is less prevalent. Thus, raising the distance to retirement substantially reduces public costs from non-employment.
    JEL: J14 J26 J64
    Date: 2015
  12. By: Rudolph, Alexandra; Priebe, Jan
    Abstract: Old age poverty is to become one of the most pressing issues in the coming decades given the demo-graphic trends forecasted. This paper investigates the main instrument to fight old age poverty: Social, non-contributory pension systems. A new comprehensive data set on 172 countries over the 2001-2013 period on the provision of social pension across the world allows us to investigate recent trends in social pension implementation and test internal and external political economy drivers of the process. By using a first order Markov transition model to account for the state dependence inherent in public pension provision, we find that demand factors such as demographic trends drives the decision to reform internally. External actors can support the continuance of social pension especially in developing countries. Thus, international influence seems to be effective in enhancing the instruments to fight old-age poverty.
    JEL: H55 J14 I38
    Date: 2015
  13. By: Lerbs, Oliver; Hiller, Norbert
    Abstract: This paper investigates the long-run relationship between the size and age structure of a city s resident population and the price of local housing. For estimation purposes, we combine city-level demographic information with housing price data for 87 cities in Germany over 1995-2012. Employing a panel error correction framework that accounts for the evolution of city in-come and housing financing costs, we find that real urban house prices per-form stronger in cities that age less rapidly. A combination of the empirical estimates with current population projections suggests that population aging will exert considerable downward pressure on urban house prices in upcoming years.
    JEL: G12 J11 R31
    Date: 2015
  14. By: Grevenbrock, Nils; Groneck, Max; Ludwig, Alexander; Zimper, Alexander
    Abstract: This paper presents new findings on biased survival beliefs by constructing their individual-level objective counterparts. We find that biases can be modelled through age-dependent probability weighting functions as known in cumulative prospect theory. The dynamics of these probability weighting functions over age suggest that misconception is increasingly driven by pessimism and likelihood insensitivity. These findings are in line with rationalizations in the literature using structural behavioral learning models with psychological biases. Exploiting newly available data from the Health and Retirement Study (HRS) on psychological factors we provide further empirical evidence supporting these explanations. Finally, we show that misconception is relevant for the demand for life insurance.
    JEL: D12 D83 I10
    Date: 2015
  15. By: de Mello, Luiz (OECD); Schotte, Simone (German Institute of Global and Area Studies (GIGA)); Tiongson, Erwin R. (Georgetown University); Winkler, Hernan (World Bank)
    Abstract: This paper looks at how individual preferences for the allocation of government spending change along the life cycle. Using the Life in Transition Survey II for 34 countries of Europe and Central Asia, we find that older individuals are less likely to support a rise in government outlays on education and more likely to support increases in spending on pensions. These results are very similar across countries, and they do not change when using alternative model specifications, estimation methods and data sources. Using repeated cross‐sections, we control for cohort effects and confirm our main results. Our findings are consistent with a body of literature arguing that conflict across generations over the allocation of public expenditures may intensify in ageing economies.
    Keywords: ageing, public spending, cohort effects
    JEL: H3 H5 J14
    Date: 2016–01
  16. By: Cremer, Helmuth (Toulouse School of Economics); Roeder, Kerstin (University of Augsburg)
    Abstract: This paper considers an economy where individuals differ in productivity and in risk. Rochet (1991) has shown that when private insurance markets offer full coverage at fair rates, social insurance is desirable if and only if risk and productivity are negatively correlated. This condition is usually shown to be satisfied for many health risks, but it appears to be violated for the old age dependency risk (mainly because longevity in turn is positively correlated with productivity). We examine the role of uniform and nonuniform social insurance to supplement a general income tax when neither public nor private insurers can observe individual risk and when it is positively correlated with wages. Consequently, a Rothschild and Stiglitz (1971) equilibrium emerges in the private insurance market and low-wage/low-risk individuals are not fully insured. We show that even when social insurance provided to the poor has a negative incentive effect, it also increases their otherwise insufficient insurance coverage. Social insurance to the rich produces exactly the opposite effects. Whichever of these effects dominates, some social insurance is always desirable. Finally, we introduce risk misperception which exacerbates the failure of private markets. The insurance term now reflects the combined failure brought about by adverse selection and misperception. Now the low-risk individuals are not only underinsured, but also pay a higher than fair rate. However, and rather surprisingly, it turns out that this does not necessarily strengthen the case for public insurance.
    Keywords: social insurance, optimal taxation, adverse selection, overconfidence, long-term care
    JEL: H21 H51 D82
    Date: 2016–01
  17. By: Stroka, Magdalena; Lindner, Roland
    Abstract: Der demografische Wandel und die damit einhergehende Alterung der Gesellschaft sowie Reduktion der Erwerbsbevölkerung stellen große gesellschaftliche Herausforderungen dar. Der Bedarf an familiärer Pflege wird infolge der zunehmenden Alterung der Gesellschaft weiter steigen. Die Angehörigenpflege wird dabei aufgrund des traditionellen Rollenverständnisses in der Regel von Frauen übernommen. Da dem Rückgang der Erwerbsbevölkerung u.a. mit einer höheren Frauenerwerbsquote gegen gesteuert werden soll, kommt es zwangsläufig zu einem Konflikt zwischen erhöhtem Pflegebedarf und verminderter Erwerbsbevölkerung. Vor diesem Hintergrund stellt sich daher die Frage, inwiefern sich Erwerbsbeteiligung und informelle Pflege miteinander vereinbaren lassen. Ziel dieser Untersuchung ist die Analyse der Effekte der Erbringung informeller Pflegeleistungen auf die Arbeitsmarktpartizipation von Männern und Frauen. Für die Untersuchung dieser Fragestellung werden Routinedaten der Techniker Krankenkasse herangezogen. Zur Verfügung steht ein Paneldatensatz für die Jahre 2007-2009 mit ca. 16 Mio. Beobachtungen. Um den Einfluss der Erbringung informeller Pflegeleistungen auf die Arbeitsmarktpartizipation zu identifizieren, werden lineare Modelle geschätzt, in denen für zeitinvariante Heterogenität kontrolliert wird. Während die Ergebnisse für Männer durchweg insignifikant sind, ist für Frauen ein signifikant positiver Zusammenhang zwischen der Erbringung informeller Pflegeleistungen und sowohl lang- als auch kurzfristiger Arbeitslosigkeit zu beobachten. Um über die Auswirkungen von informeller Pflege auf die Arbeitsmarktpartizipation zu diskutieren, ist es notwendig jegliche Opportunitätskosten zu berücksichtigen. Die aktuellen Pflegegesetze sehen zwar eine finanzielle Entschädigung für Pflegende vor, beziehen aber nicht die Reduzierung oder Niederlegung der Arbeit und das damit einhergehende verringerte Einkommen des Pflegenden in ausreichendem Maße mit ein. Eine Möglichkeit, um Pflegende zu entlasten, wäre die Flexibilisierung von Arbeitszeiten.
    Abstract: Due to the demographic change and the concomitant ageing of society, the labor force will reduce substantially. In order to mitigate the consequences of the demographic change the European Council aims at a higher labor force participation of women. Simultaneously, the demand for informal care will increase due to the ageing of society. Owing to the traditional understanding of women's role, mainly females engage in informal care. Attempting to counteract the reduction of labor force by means of increasing women’s labor force participation, there occurs a conflict between rising demand for informal care and decreasing labor force. Based on this background, the compatibility of labor market participation and informal care should be contemplated critically. The objective of this study is to analyze the effects of informal care on labor market participation of men and women. This study uses administrative data of Germany’s largest sickness fund, the Techniker Krankenkasse, to analyze the above-mentioned issue. The data set contains more than 16 million observations for 2007-2009. In order to identify the effects of informal care on labor force participation, linear regression models are estimated in which is controlled for time-invariant heterogeneity. For men the results are not significant. The results for women illustrate a significant positive relationship between informal care and long-term as well as short-term unemployment. In order to discuss the effects of informal care on labor force participation, it is essential to take all opportunity costs into account. The current care laws include a financial compensation for informal caregivers, but they do not take the reduction or termination of employment and the associated reduced income into consideration. A transition to more flexible working hours could possibly relieve informal caregivers.
    Keywords: Informelle Pflege,Arbeitsmarktpartizipation,Arbeitslosigkeit,Pflegestufen,Fixed-Effects
    JEL: I10 J10
    Date: 2016
  18. By: Harry ter Rele; Arjen Hussem; Casper van Ewijk; Albert Wong
    Abstract: This paper uses synthetic life-cycle paths at the individual level to analyze the distribution of long-term care expenditures in the Netherlands. Using a comprehensive set of administrative data 20,000 synthetic life-cycle paths of household income and long-term care costs are constructed using the nearest neighbor resampling method. We show that the distribution of these costs is less skewed when measured over the life-cycle than on a cross-sectional basis. This may provide an argument for self-insurance by smoothing these costs over the life-cycle. Yet costs are concentrated at older ages, which limits the scope for self-insurance. Furthermore, the paper investigates the relation between long-term care expenditures, household composition, and income over the life-cycle. The expenditures on a lifetime basis from the age of 65 are higher for low income households, and (single) women.
    Date: 2016–01
  19. By: Constant, Amelie F. (Temple University); García-Muñoz, Teresa (Universidad de Granada); Neuman, Shoshana (Bar-Ilan University); Neuman, Tzahi (Hebrew University, Jerusalem)
    Abstract: We study the health determinants of immigrant men and women over the age of fifty, in Europe, and compare them to natives. We utilize the unique Survey of Health Aging and Retirement (SHARE) and augmented it with macroeconomic information on the 22 home countries and 16 host countries. Using Multilevel Analysis we can best capture the within and between countries variation and produce reliable results. We find that during the first decade after arrival, immigrants report higher levels of subjective health compared to natives and to previous cohorts of immigrants. As time since migration passes by, reported subjective health decreases; immigrants' health becomes the same as that of comparable natives or it even decreases. The level of economic development of both the origin and the host country positively affect the individual's health, but the effect of the host country is much more pronounced. It appears that positive and negative deviations (of the host from the origin country) have different impacts on individual health: an increase in a positive deviation (the country of origin is more developed compared to the host country – a 'loss' for the immigrating individual) leads to a decrease in the immigrant's subjective health, while an increase in the absolute negative deviation (a 'gain' for the immigrating person) leads to an increase in the immigrant's subjective health. These differential effects can be explained as some variant of the Loss-Aversion Theory.
    Keywords: self-assessed health status, immigration, Europe, country of origin, older population, multilevel regression
    JEL: C22 J11 J12 J14 O12 O15 O52
    Date: 2014–12
  20. By: Weigert, Benjamin; Klemm, Marcus
    Abstract: This paper addresses the importance of compositional changes in the labor force for the development of the wage distribution. Demographic change and higher educational attainment imply a shift toward employees with more experience and/or better education. These groups are characterized by higher relative wages as well as higher within-group wage inequality. Mechanically, these compositional shifts entail a rise in wage inequality. We discuss the mechanisms theoretically and present empirical evidence using data of the German Socio-Economic Panel from the mid 1990's to 2012. Accounting for the parallel changes in the age structure and the educational background of the labor force, these compositional effects alone can explain one quarter of the observed increase in aggregate wage inequality.
    JEL: J31 D31 J11
    Date: 2015
  21. By: Geppert, Christian
    Abstract: This paper provides a quantitative assessment of the impact of future demographic change on the distributions of earnings and skills in the German economy. The model accommodates household heterogeneity along both, the intra- and the inter-generational dimension. The results suggest a decline in the skill premium of 30 percentage points until the year 2050 meanwhile, the college educated share of the population increases by about 4 percentage points. Welfare effects from changing wages, interests, and pensions are severe and amount to up to 6% of consumption in every period of the remaining lifetime. While welfare effects differ considerably across generations they are rather homogeneous across skill groups unless the educational choice of households is restricted.
    JEL: J11 I24 C68
    Date: 2015
  22. By: Bolli, Thomas; Kemper, Johanna
    Abstract: This paper exploits exceptions in the application of employment protection legislation (EPL) to small firms beneath a particular size threshold to test the theoretical hypothesis that EPL increases the incentives of firms to train their employees in a regression discontinuity setting. Using firm-level data from Finland and Italy provides no empirical evidence for this hypothesis. In fact, the results rather suggest a potentially negative impact, which is unstable across empirical specifications though. We test whether this might be due to a negative selection of employees by comparing firms with low and high shares of old employees. The insignificantly higher effect of EPL for firms with older workers provides at best suggestive evidence that EPL affects training negatively though.
    JEL: J24 J21 L51
    Date: 2015
  23. By: Korfhage, Thorben; Geyer, Johannes
    Abstract: Germany introduced a new mandatory insurance for long-term care in 1995. It replaced a system based on means-tested transfers. The new scheme made it easier for households to draw benefits and to organize informal care. We exploit this reform as a natural experiment and examine its effect on the labor supply of caregivers who live in the same household as the care recipient. We find strong negative results for male labor supply but not for women. We conduct a set of robustness tests and our results prove to be stable.
    JEL: J22 H31 I18
    Date: 2015
  24. By: Böckerman, Petri (Turku School of Economics, Labour Institute for Economic Research, Helsinki a); Skedinger, Per (Research Institute of Industrial Economics (IFN)); Uusitalo, Roope (Jyväskylä University School of Business and Economics)
    Abstract: We construct a multi-country employer-employee data to examine the consequences of employment protection. We identify the effects by comparing worker exit rates between units of the same firm that operate in two countries that have different seniority rules. The results show that last-in-first-out rules reduce dismissals of older, more senior workers, especially in shrinking multinational firms, and increase their bargaining power, resulting in a steeper seniority-wage profile.
    Keywords: Multi-country linked employer-employee data; Employment protection legislation; Seniority rules
    JEL: J08 J32 J63 K31 L51
    Date: 2016–01–08
  25. By: Stroka, Magdalena; Schmitz, Hendrik
    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.
    JEL: I10 I11 I19
    Date: 2015

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