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on Economics of Ageing |
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| By: | Aliaj, Arjeta (HEC-University of Liège, Belgium); Flawinne, Xavier (HEC-University of Liège, Belgium); Jousten, Alain (University of Liège); Perelman, Sergio (CREPP, Université de Liège); Shi, Lin (HEC-University of Liège, Belgium) |
| Abstract: | For the last two decades, the increase of employment among cohorts of individuals aged 50+ has been a policy objective on the European employment agenda. The present paper takes stock of the situation as observed in Belgium over the time period 1997-2011. First, we provide analysis on the evolution of older workers' employment in Belgium and its neighboring countries Germany, France and the Netherlands using the EU Labour Force Survey. Second, we characterize the different employment and hours of work patterns for different age sub‐groups (50‐54, 55‐59, 60‐64) and provide evidence on their respective evolution. The results show that employment rates among older workers started to catch‐up with employment rates of younger cohorts as of 2001, and with more acuity after 2006. This effect dominates the observed negative effect on hours of work and hence leads to an increase in total hours of work of the cohort – net of any purely demographic effects. |
| Keywords: | retirement, employment, hours of work |
| JEL: | J08 J21 J26 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9819&r=age |
| By: | Jean-Olivier Hairault (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); François Langot (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Sébastien Ménard (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique, GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Université du Maine); Thepthida Sopraseuth (CEPREMAP - Centre pour la recherche économique et ses applications, THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | At the end of working life, as well as reducing unemployment benefits, the unemployment-insurance agency could apply pension tax instead of wage tax. First, the pension tax provides greater incentives as the value of re-employment is tax-free. Second, the short job duration before retirement implies that the budgetary return and search incentives associated with the pension tax are considerable. By way of contrast, younger workers have greater search intensity and their future pension taxes are more remote and therefore more heavily-discounted: for them the wage tax is more efficient than is the pension tax. Finally, even in the special case where search intensity is zero close to retirement, perfect risk-sharing across unemployment and retirement is welfare-improving thanks to the pension tax. |
| Keywords: | Unemployment insurance, Retirement, Recursive contracts, Moral Hazard |
| Date: | 2016–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-01292095&r=age |
| By: | Cremer, Helmuth (Toulouse School of Economics); Pestieau, Pierre (CREPP, Université de Liège) |
| Abstract: | There exists a wide variety of tax treatments of pensions across the world. And the reasons for such a range of regimes are not clear. This note reviews the general principles of pension taxes and analyses the theoretical foundations of why pension incomes ought to be taxed specifically. To do this, one has to distinguish between public and private pensions. The design of public pensions cannot be separated from the one of taxation. Regarding private pensions, the key issue is whether or not pension saving ought to be treated differently from other forms of saving. |
| Keywords: | private pensions, deferred tax, social security, retirement |
| JEL: | H21 H55 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9821&r=age |
| By: | Andreas Irmen (CREA, Université du Luxembourg); Anastasia Litina (CREA, Université du Luxembourg) |
| Abstract: | This research empirically establishes and theoretically motivates the hypothesis that population aging has a hump-shaped effect on inventive activity. We estimate this hump-shaped relationship in a panel of 33 OECD countries over the period 1960-2012. The increasing part of the hump captures the awareness that population aging requires inventive activity to guarantee current and future standards of living. The decreasing part reflects the tendency of aging societies to lose dynamism and the willingness to take risks. Policy-wise our analysis suggests that raising the awareness of individuals about the consequences of population aging may facilitate the adoption of strategies and policies encouraging inventive activity and economic growth. |
| Keywords: | Population Aging, Inventive Activity, Panel Estimation |
| JEL: | J11 O31 O50 O57 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:16-03&r=age |
| By: | Mariusz Jarmuzek; Najla Nakhle |
| Abstract: | Reform of Lebanon’s pension system is indispensable. The country already faces fiscal sustainability risks, which will be compounded in the future by significantly higher pensionrelated spending and liabilities, mainly reflecting adverse demographics. In addition to sustainability issues, the pension system also suffers from equity shortcomings—Lebanon is the only MENA country that does not offer social security for retirees in the private sector. While several reform proposals have been formulated since the early 2000s, none has been implemented to date. Costs mount with every year of delay, so action is required soon to address these challenges. |
| Keywords: | Pensions;Ageing;Lebanon;Middle East;Fiscal policy;demographics, equity, pension reform, sustainability, pension, pension expenditure, pension system, retirement, employees, Social Security and Public Pensions, Demographic Trends and Forecasts, |
| Date: | 2016–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:16/46&r=age |
| By: | Ross Finnie (Graduate School of Public and International Affairs, University of Ottawa); David Gray (Department of Economics, University of Ottawa); Yan Zhang (Statistics Canada) |
| Abstract: | We focus on one particular pillar of the public retirement income network in Canada, namely receipt outcomes of the Guaranteed Income Supplement (GIS) regime. This empirical analysis is carried out in a dynamic framework. We address the extent to which individuals enter the state of GIS receipt at various ages as well as the extent to which individuals who receive GIS benefits at the earliest age of eligibility subsequently exit the regime. We first measure these transition rates, and then we focus our analysis primarily on the impact of the following three attributes of recipients: changes in marital status, entry cohort, and current age. The econometric equations include both simple transition models of both entries and exits, as well as hazard models of the probability of exiting the GIS regime. Among our many empirical findings is a non-trivial incidence of delayed entry into the regime as well as exit from the regime conditional on prior receipt of benefits. Women who transit from married to single status are more likely to enter, but the opposite finding is discerned for men. The hazard model for the risk of exiting the GIS regime conditioned on the duration of the on-going spell of receipt reveals a sharp pattern of negative duration dependence. The probability of entering the regime, conditioned on the event of not having received the benefit when one is initially eligible, becomes less and less likely as individuals age. |
| Keywords: | Old age income security, benefit receipt, marital status, transitions between states, duration effects |
| JEL: | H55 I38 J14 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:1511e&r=age |
| By: | Irene Mosca (The Irish Longitudinal Study of Ageing, Trinity College Dublin); Robert E Wright (Department of Economics, University of Strathclyde) |
| Abstract: | A small but growing body of research suggests that retirement and cognitive decline are related. In fact, some have argued that retirement causes cognitive decline. The aim of this paper is to add to this literature using data of older women from The Irish Longitudinal Study on Ageing (TILDA). Ordinary least square (OLS) regressions show a significant negative association between retirement and cognitive functioning. These estimates are based on the assumption that retirement is exogenous. As retirement is potentially endogenous with respect to cognition, instrumental variable (IV) methods are also used. The instrument employed is the abolition of the so-called “Marriage Bar”. In simple terms, the Marriage Bar was the requirement that women leave paid employment on getting married. It was established in the 1930s and removed in the 1970s. When IV estimations are used, the effect of retirement on cognition is negative but statistically insignificant. Differences between OLS and IV estimates are compared with a standard test. OLS estimates are preferred as the null hypothesis of exogeneity of retirement cannot be rejected at conventional statistical levels. |
| Keywords: | cognition, ageing, retirement |
| JEL: | J14 J26 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1604&r=age |
| By: | Laetitia Challe (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique); Florent Fremigacci (EconomiX - UP10 - Université Paris 10, Paris Ouest Nanterre La Défense - CNRS - Centre National de la Recherche Scientifique); François Langot (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Université du Maine); Yannick L'Horty (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique); Loïc Du Parquet (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Université du Maine); Pascale Petit (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12) |
| Abstract: | Several concurrent hypotheses have been proposed in order to take into account the persistence of under-employment of persons aged over 50, in France. In this paper, we are interested in the labour demand. We construct and implement an experimental protocol allowing testing four hypotheses currently discussed: the unobservable distance from retirement by the recruiter; the supposed depreciation of skills in a context with repeated technological shocks; the supposed inability of professional retraining, eventually differentiated by gender; a taste discrimination against older workers, as the result of social norms. To test each of these hypotheses, we have conducted four separate campaigns of testing for evaluating them. Between mid-January and mid-August 2015, we have sent, 6 361 applications allocated on seven occupations and twenty-eight profiles. The research investigates a statistical processing of results of these testings. Our results indicate which must necessarily combine several hypotheses to take into account the under-employment of seniors, in France: the difficulties of professional retraining following a shock in the employment career; the social norms inducing a negative representation of the older workers through the employers. Seniors are both victims of the depreciation of the human capital and age discriminations in access to employment, which will especially penalise men in their professional retraining. The classical explanation by the distance from retirement is the only one which isn’t statistical validated. |
| Keywords: | Employment of older workers, access to employment, testing |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01292137&r=age |
| By: | Thomas Blanchet (ENSAE - Ecole Nationale de la Statistique et de l'Analyse Economique - Ecole Nationale de la Statistique et de l'Analyse Economique, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Yves Dubois (INSEE Paris - INSEE Paris); Anthony Marino (INSEE Paris - INSEE Paris); Muriel Roger (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC)) |
| Abstract: | L’existence d’un système de retraite modifie les comportements d’épargne des ménages. Nous estimons le phénomène de substitution entre épargne privée et montant des droits à pension dans le cas français à partir des données de l’enquête Patrimoine et du modèle de microsimulation Destinie de l’INSEE. Les comportements d’épargne sont modélisés à l’aide du modèle de Gale (1998). Les résultats mettent en évidence des comportements de substitution entre l’épargne des ménages et leurs droits à pension. L’amplitude de ces effets est sensible aux paramètres d’actualisation des agents. Une hausse des pensions publiques induit une diminution de l’épargne complémentaire retraite et une diminution de l’investissement immobilier. Ce second effet est prédominant. |
| Keywords: | Patrimoine,Retraites,Cycle de vie |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01292412&r=age |
| By: | Thomas Url; Rob J Hyndman; Alexander Dokumentov |
| Abstract: | Many countries have implemented social programs providing long-term financial or in-kind entitlements. These programs often focus on specific age-groups and consequently their expenditure streams are subject to demographic change. Given the strains already existing on public budgets, long-term forecasts are an increasingly important instrument to monitor the budgetary consequences of social programs. The expected development of the labour force is a key input to these forecasts. We Produce forecasts of age-specific labour market participation rates, combining a functional data approach with information on education, marital status and other exogenous variables. |
| Keywords: | Forecast, labour supply, age-profile, smoothing. |
| JEL: | C14 C33 J11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:msh:ebswps:2016-3&r=age |
| By: | Alicia H. Munnell; Jean-Pierre Aubry; Caroline V. Crawford |
| Abstract: | In addition to pensions, most state and local governments provide other post-employment benefits (OPEBs), the largest of which is retiree health insurance. Retiree health plans have received increased attention in recent years due to rapidly rising health costs and new reporting guidelines from the Governmental Accounting Standards Board (GASB). These guidelines, which were released in 2004 and became effective in 2007, require states and localities to change the way they account for the cost of retiree health plans from a cash to an accrual basis, essentially applying to OPEB plans the standards used for pensions. This brief provides an updated accounting of OPEB commitments, with data for 2012 or 2013. These data cover virtually all OPEB plans administered at the state level as well as a large sample of plans administered by counties, cities, and school districts. The analysis also looks beyond the sample of local governments to estimate aggregate OPEB liabilities for all local governments excluded from our sample. The discussion proceeds as follows. The first section describes the evolution of the new reporting framework. The second section discusses the OPEB sample and introduces our methodology for capturing OPEB liabilities for entities not in our sample. The third section compares OPEB and pension liabilities in the aggregate and discusses the need to use the same discount rate when comparing these liabilities. The fourth section puts the OPEB liabilities in perspective. The final section concludes that: 1) aggregate unfunded OPEB liabilities are estimated to be $862 billion – nearly two thirds of which is held at the local level; 2) these liabilities are equivalent to 28 percent of unfunded pension liabilities – when pension liabilities are calculated with an interest rate comparable to OPEBs; and 3) while OPEB liabilities are large, several factors limit their potential drain on state and local resources. |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ibslp48&r=age |
| By: | Sven Neelsen (Erasmus University Rotterdam, the Netherlands); Owen O’Donnell (Erasmus University Rotterdam, the Netherlands; University of Lausanne, Switzerland; University of Macedonia, Greece) |
| Abstract: | Like other countries seeking a progressive path to universalism, Peru has attempted to reduce inequalities in access to healthcare by granting the poor entitlement to tax-financed basic care without charge. We identify the impact of this policy by comparing the target population’s change in healthcare utilization with that of poor adults already covered through employment-based insurance. There are positive effects on receipt of ambulatory care and medication that are largest among the elderly and the poorest. The probability of getting formal healthcare when sick is increased by almost two fifths, while the likelihood of being unable to afford treatment is reduced by more than a quarter. Consistent with the shallow cover offered, there is no impact on use of inpatient care. Mean out-of-pocket (OOP) expenditure on healthcare is unaffected but spending is reduced by up to one quarter at some points of the distribution. Among healthcare users, medical spending is reduced across much of the distribution and in relative terms falls most at lower quantiles, which is consistent with limited nominal and effective coverage of expensive treatments. |
| Keywords: | Health insurance; health financing; healthcare; Universal Coverage; Peru |
| JEL: | H42 H51 I18 |
| Date: | 2016–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20160019&r=age |
| By: | Han Lin Shang; Rob J Hyndman |
| Abstract: | Age-specific mortality rates are often disaggregated by different attributes, such as sex, state and ethnicity. Forecasting age-specific mortality rates at the national and sub-national levels plays an important role in developing social policy. However, independent forecasts of age-specific mortality rates at the sub-national levels may not add up to the forecasts at the national level. To address this issue, we consider the problem of reconciling age-specific mortality rate forecasts from the viewpoint of grouped univariate time series forecasting methods (Hyndman, Ahmed, et al., 2011), and extend these methods to functional time series forecasting, where age is considered as a continuum. The grouped functional time series methods are used to produce point forecasts of mortality rates that are aggregated appropriately across different disaggregation factors. For evaluating forecast uncertainty, we propose a bootstrap method for reconciling interval forecasts. Using the regional age-specific mortality rates in Japan, obtained from the Japanese Mortality Database, we investigate the one- to ten-step-ahead point and interval forecast accuracies between the independent and grouped functional time series forecasting methods. The proposed methods are shown to be useful for reconciling forecasts of age-specific mortality rates at the national and sub-national levels, and they also enjoy improved forecast accuracy averaged over different disaggregation factors. |
| Keywords: | Forecast reconciliation, hierarchical time series forecasting, bottom-up, optimal combination, Japanese Mortality Database |
| JEL: | C14 C32 J11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:msh:ebswps:2016-4&r=age |