nep-age New Economics Papers
on Economics of Ageing
Issue of 2016‒08‒07
eleven papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Social Protection for Elderly. Social Exclusion and Poverty By Petru POPESCU
  2. Caring an ageing population : challenges, facts, artifacts and policies By Philippe Mossé
  3. A Long-Term Evaluation of Recent Hungarian Pension Reforms By Christoph Freudenberg; Tamás Berki; Ádám Reiff
  4. Turbulence and the Employment Experience of Older Workers By Lalé, Etienne
  5. Model uncertainty approach in mortality projection with model assembling methodologies By Albarrán, Irene; Marín, J. Miguel; Alonso, Pablo J.; Benchimol, A.
  6. What Explains the Difference in the Effect of Retirement on Health?: Evidence from Global Aging Data By Motegi, H.; Nishimura, Y.; Oikawa, M.
  7. Aging of the Baby Boomers: Demographics and Propagation of Tax Shocks By Giuseppe Fiori; Domenico Ferraro
  8. Rethinking the paradox of redistribution: how private insurance and means testing can lead to universalizing reform By Margarita Gelepithis
  9. Maybe "honor thy father and thy mother": uncertainfamily aid and the design of social long term care insurance By Canta, Chiara; Cremer, Helmuth; Gahvari, Firouz
  10. Optimal Population in a Finite Horizon By Satoshi Nakano; Kazuhiko Nishimura
  11. The Formation of Consumer Inflation Expectations:Evidence From Japan's Deflation Experience By Jess Diamond; Kota Watanabe; Tsutomu Watanabe

  1. By: Petru POPESCU (Faculty of Economics, Ecological University of Bucharest)
    Abstract: In the present article I propose to address some of the problems of social exclusion of older people in the context of the social protection of this category of people is insufficiently treated, and especially solved by the Romanian state. Financial and material resources allocated to social protection of older people in Romania are insufficient and the government has applied a strategy to eliminate or at least mitigate the appearance of social exclusion of older people who appear in the current context as a real burden to society through the material problems, health and social inclusion. Elderly people have serious problems and the Romanian company offers very few alternatives for solving multiple problems that seniors face. It is painful that after a lifetime of work for the benefit of society, the same society that the person you refuse to give you elderly and social exclusion. Financial assistance almost nonexistent, the social and the lack of social inclusion efforts make the elderly a segment that is one unattractive to society and the phenomenon tends to increase in the next period when the ratio between the active and the retired will seriously damage the detriment of persons elderly. I conducted a study of specific case in which I presented the social situation of five persons, elderly, each with conditions somewhat different in terms of living standards and material conditions and financial capabilities and we have identified the individual needs of the sample investigated for solving their problems and improving their social protection. Without creating a viable system of social protection for elderly and I think this is urgency in Romanian society will witness further marginalize a growing group of people with needs increasing but resources allocated in sharp decline. It is inadmissible to develop strategies for solving social assistance to the elderly and to see that is increasingly less to solve this problem.
    Keywords: strategy of social protection of the elderly, financial policies of social assistance, social exclusion and inclusion methods in older people, raising living standards and material and financial resources allocated to the elderly
    JEL: I23 G18 H55
    Date: 2016–04
  2. By: Philippe Mossé (LEST - Laboratoire d'économie et de sociologie du travail - Université de la Méditerranée - Aix-Marseille 2 - Université de Provence - Aix-Marseille 1 - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique)
    Abstract: An ageing population is a challenge for every country as the " demographic transition " is about to be an universal phenomenon. In this paper are first analyzed the two main dimensions of this dynamic. The first one is the demographic transition as such. Traditionally stages are defined that are placed in a chronological way. Each country being at different stage. The second dimension is the financing one, as it is necessary to allocate resources in a more efficient way that market forces would do. In a second part, the controversial impact on health care cost will be discussed. It will be demonstrated that the " last wagon " syndrome is nowadays proven. As a result, the rise of the life expectancy will not be such a burden for health insurance, whatever the models (Beveridge or Bismarck) are. To go further in the analysis of policies oriented toward caring elderly, some hints of European policy experience will be given. Beyond the European model ideology, studies show a double divide between South and North and between old and new European Union members. To conclude, the Brazilian situation will be shortly described in the light of the on going dynamic.
    Abstract: El envejecimiento de la población es un reto para todos los países desde el momento en que "transición demográfica" está a punto de ser un fenómeno universal. En este trabajo se analiza la primera vez que las dos dimensiones principales de esta dinámica. La primera es la transición demográfica como tal. Etapas definidas tradicionalmente se colocan en orden cronológico. Cada país está en una etapa diferente. La segunda dimensión es la necesidad financiera para asignar recursos de manera más eficiente que las fuerzas del mercado. En la segunda parte, se discutirá el polémico impacto en el costo de la atención de salud. Se demostró que el síndrome de "último coche" ahora se ha demostrado día. Como resultado, el aumento de la esperanza de vida no será un problema para los sistemas de salud, independientemente del modelo de salud (Beveridge o Bismarck). Para ir más allá en el análisis de las políticas para el cuidado de los ancianos, se mostrará algunas de las experiencias de la política europea en la materia. A pesar de la adición de la ideología europea, los estudios muestran una doble brecha entre el Norte y el Sur y entre los nuevos y antiguos miembros de la UE. En conclusión, la situación brasileña se describirá brevemente a la luz de la dinámica en curso
    Abstract: O envelhecimento da população é um desafio para todos os países a partir do momento em que "transição demográfica" está prestes a ser um fenômeno universal. Neste artigo são analisadas pela primeira vez as duas dimensões principais desta dinâmica. O primeiro deles é a transição demográfica como tal. Tradicionalmente, estágios definidos são colocados de forma cronológica. Cada país está em uma fase diferente. A segunda dimensão é sobre necessidade financeira para alocar recursos de forma mais eficiente que as forças de mercado faria. Numa segunda parte, será discutido o impacto controverso no custo de cuidados de saúde. Será demonstrado que a síndrome do "último vagão" é hoje em dia comprovada. Como resultado, o aumento da expectativa de vida não será um problema para os sistemas de saúde, independente do modelo de saúde (Beveridge ou Bismarck). Para ir mais longe na análise das políticas voltadas para cuidar de idosos, serão mostradas algumas experiências de políticas europeias sobre o assunto. Apesar da Além da ideologia europeia, estudos mostram uma dupla divisão entre Sul e Norte e entre os novos e antigos membros da União Européia. Para concluir, a situação brasileira será brevemente descrita à luz da dinâmica em curso.
    Keywords: ageing,social policy,care,Europe,Envejecimiento, la política social, cuidado, Europa,envelhecimento,política social,cuidado,Europa
    Date: 2015
  3. By: Christoph Freudenberg (Institute of Public Finance Freiburg University); Tamás Berki (Magyar Nemzeti Bank, Central Bank of Hungary); Ádám Reiff (Magyar Nemzeti Bank, Central Bank of Hungary)
    Abstract: This paper studies the effect of Hungarian pension reforms between 2009-2012 on the adequacy and long-term fiscal stability of the Hungarian public pension system. For the adequacy analysis, we use a micro simulation model to project future initial pension levels relative to future gross wages. For the analysis of fiscal stability, we use a generational accounting-based macro model to forecast future yearly cash balances and calculate implicit pension liability (IPL) indicators. We find that major recent reforms have stabilized the public pension system until around 2035, but after this, mainly due to unfavorable demographic developments, we project increasing deficits that reach about 4% of GDP by 2060.
    Keywords: Pension reforms, Sustainability of pension systems, Micro simulation
    JEL: H55
    Date: 2016
  4. By: Lalé, Etienne (University of Bristol)
    Abstract: This paper provides a unified account of the trends in unemployment and labor force participation pertaining to the employment experience of older male workers during the past half-century. We build an equilibrium life-cycle model with labor-market frictions and an operative labor supply margin, wherein economic turbulence à la Ljungqvist and Sargent (1998) interact with institutions in ways that deteriorate employment. The model explains simultaneously: (i) the fall in labor force participation in the United States, (ii) the similar but more pronounced decline in Europe alongside rising unemployment rates and (iii) differences across European countries in the role played respectively by unemployment and labor force participation. The model also shows that policies that fostered early retirement may have exacerbated the deterioration of European labor markets: raising early retirement incentives to reduce unemployment among older workers tends to increase unemployment at younger ages, especially in turbulent economic times and under stringent employment protection legislation.
    Keywords: job search, job loss, turbulence, European unemployment, labor force participation
    JEL: E24 J21 J64
    Date: 2016–07
  5. By: Albarrán, Irene; Marín, J. Miguel; Alonso, Pablo J.; Benchimol, A.
    Abstract: Forecasting mortality rates has become a key task for all who are concerned with payments for non-active people, such as Social Security or life insurance firms managers. The non-ending process of reduction in the mortality rates is forcing to continuously improve the models used to project these variables. Traditionally, actuaries have selected just one model, supposing that this model were able to generate the observed data. Most times the results have driven to a set of questionable decisions linked to those projections. This way to act does not consider the model uncertainty when selecting a specific one. This drawback can be reduced through model assembling. This technique is based on using the results of a set of models in order to get better results. In this paper we introduce two approaches to ensemble models: a classical one, based on the Akaike information criterion (AIC), and a Bayesian model averaging method. The data are referred to a Spanish male population and they have been obtained from the Human Mortality Database. We have used four of the most widespread models to forecast mortality rates (Lee-Carter, Renshaw-Haberman, Cairns-Blake-Dowd and its generalization for including cohort effects) together with their respective Bayesian specifications. The results suggest that using assembling models techniques gets more accurate predictions than those with the individual models.
    Keywords: Renshaw-Haberman model; projected life tables; longevity risk; Lee-Carter model; Cairns-Blake-Dowd model; bootstrap; Bayesian model averaging; AIC model averaging
    Date: 2016–07
  6. By: Motegi, H.; Nishimura, Y.; Oikawa, M.
    Abstract: This paper analyzes the reasons for differences in the effect of retirement on health estimated results in previous studies. We investigate these differences by focusing on the analysis methods used by these studies. Using various health indexes, numerous researchers have examined the effects of retirement on health. However, there are no unifed views on the impact of retirement on various health indexes. Consequently, we show that the choice of analysis method is one of the key factors in explaining why the estimated results of the effect of retirement on health differ. Moreover, we re-estimate the effect of retirement on health by using a fixed analysis method controlling for individual heterogeneity and endogeneity of the retirement behavior. We analyze the effect of retirement on health parameters, such as cognitive function, self-report of health, activities of daily living (ADL), depression, and body mass index in eight countries. We find that the effects of retirement on self-report of health, depression, and ADL are positive in many of these countries.
    Keywords: aging; health; retirement; global aging data;
    JEL: I00 I10 I12 I19 J26
    Date: 2016–07
  7. By: Giuseppe Fiori (North Carolina State University); Domenico Ferraro (Arizona State University)
    Abstract: We investigate the consequences of demographic change for the effects of tax cuts in the United States over the post-WWII period. Using narratively identified tax changes as proxies for structural shocks, we establish that the responsiveness of unemployment rates to tax changes largely varies across age groups: the unemployment rate response of the young is nearly twice as large as that of prime-age workers. Such heterogeneity is the channel through which shifts in the age composition of the labor force impact the response of the aggregate U.S. unemployment rate to tax cuts. We find that the aging of the Baby Boomers considerably reduces the effects of tax cuts on unemployment.
    Date: 2016
  8. By: Margarita Gelepithis
    Abstract: Market-heavy welfare systems, in which low or moderate state benefits are topped up by private welfare arrangements, are expected to undermine political support for the extension of social rights and perpetuate benefit fragmentation over time. And where low state benefits are means-tested, political support is expected to be particularly prone to erosion. In this paper I develop the argument that the combination of private pension insurance and means-testing does not always perpetuate fragmentation. Rather, it structures the policy preferences of pension industry representatives and right-of-centre parties such that these actors push for reforms to make the state pension more universal. I make my argument by examining the reform history of nine market-heavy pension systems in the three decades since 1980. A fuzzy- set Qualitative Comparative Analysis (fsQCA) maps the conditions under which universalizing reforms have occurred, and two case studies link institutional conditions to reform outcomes via the policy preferences of key political actors.
    Keywords: universalism, dualization, means-testing, private insurance, pension reform
    Date: 2016–07
  9. By: Canta, Chiara; Cremer, Helmuth; Gahvari, Firouz
    Abstract: We study the role and design of private and public insurance programs when informal care is uncertain. Children's degree of altruism is represented by a parameter which is randomly distributed over some interval. The level of informal care on which dependent elderly can count is therefore random. Social insurance helps parents who receive a low level of care, but it comes at the cost of crowding out informal care. Crowding out occurs both at the intensive and the extensive margins. We consider two types of LTC policies. A topping up (TU ) scheme provides a transfer which is non exclusive and can be supplemented. An opting out (OO) scheme is exclusive and cannot be topped up. TU will involve crowding out both at the intensive and the extensive margins, whereas OO will crowd out solely at the extensive margin. However, OO is not necessarily the dominant policy as it may exacerbate crowding out at the extensive margin. Finally, we show that the distortions of both policies can be mitigated by using an appropriately designed mixed policy.
    Keywords: Long term care, uncertain altruism, private insurance, public insurance, topping up, opting out.
    JEL: H2 H5
    Date: 2016–07
  10. By: Satoshi Nakano; Kazuhiko Nishimura
    Abstract: A favorable population schedule for the entire potential human family is sought, under the overlapping generations framework, by treating population as a control variable in a dynamic social welfare maximization context. The Benthamite and Rawlsian social welfare functions are examined, with zero future discounting, while infinity in the maximand is circumvented by introducing the depletion of energy resources and its postponement through technological innovations. The model is formulated as a free-horizon dynamic planning problem, solved via a non-linear optimizer. Under exploratory scenarios, we visualize the potential trade-offs between the two welfare criteria.
    Date: 2016–08
  11. By: Jess Diamond (Hitotsubashi University,); Kota Watanabe (CIGS and University of Tokyo); Tsutomu Watanabe (University of Tokyo)
    Abstract: Using a new micro-level dataset we investigate the relationship between the inflation experience and inflation expectations of individuals in Japan. We focus on the period after 1995, when Japan began its era of deflation. Our key findings are fourfold. Firstly, we find that inflation expectations tend to increase with age. Secondly, we find that measured inflation rates of items purchased also increase with age. However, we find that age and inflation expectations continue to have a positive correlation even after controlling for the individual-level rate of inflation. Further analysis suggests that the positive correlation between age and inflation expectations is driven to a significant degree by the correlation between cohort and inflation expectations, which we interpret to represent the effect of historical inflation experience on expectations of future inflation rates.
    Keywords: Inflation Expectations, Deflation, Monetary Policy, Panel Data, Japan
    Date: 2016–07

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