nep-age New Economics Papers
on Economics of Ageing
Issue of 2016‒09‒11
sixteen papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. The Effects of the Early Retirement Age on Retirement Decisions By Weber, Andrea
  2. YOLO: Mortality Beliefs and Household Finance Puzzles By Raphael Schoenle; Kristian Ove Myrseth; Rawley Heimer
  3. The Mortality Effects of Retirement: Evidence from Social Security Eligibility at Age 62 By Maria D. Fitzpatrick; Timothy J. Moore
  4. Modele „srebrnej gospodarki” w Unii Europejskiej w ujęciu porównawczym. Próba wprowadzenia do dyskusji By Klimczuk, Andrzej
  5. What drives national differences in intensive grandparental childcare in Europe? By Giorgio Di Gessa; Karen Glaser; Debora Price; Eloi Ribe; Anthea Tinker
  6. Age Policy. Analysis of Generational Stratification of Russian Society By Smolkin, Anton
  7. Less public investment due to an aging population: The constant decline in public investment over the last four decades can only partly be explained by high public debt By Jäger, Philipp
  8. Aging, private health expenditures and environment quality By Safi, Fatma
  9. Euro Area Policies; Selected Issues By International Monetary Fund. European Dept.
  10. Changes in the Age Structure of the Population and Their Social and Political Consequences By Korotaev, Andrey Vitalievich; Shulgin, Sergei; Arkhangelskiy , Vladimir; Zinkina, Yulia Viktorovna
  11. Comparative Analysis of National and Regional Models of the Silver Economy in the European Union By Klimczuk, Andrzej
  12. Number of Children and Living Arrangements of the Elderly in China By Fengming Chen; Hiroshi Yoshida
  13. Sustainability of the French first pillar pension scheme (CNAV): assessing automatic balance By Frédéric Gannon; Stéphane Hamayon; Florence Legros; Vincent Touze
  14. Russia's Possible Demographic Scenarios and Their Consequences By Arkhangelskiy , Vladimir; Shulgin, Sergei; Efremov, Igor; Pustovalov, Denis Nikolaevich
  15. Germany; Selected Issues By International Monetary Fund. European Dept.
  16. Scenario Demographic Forecasts for the Bric Countries By Korotaev, Andrey Vitalievich; Shulgin, Sergei; Arkhangelskiy , Vladimir; Zinkina, Yulia Viktorovna

  1. By: Weber, Andrea
    Abstract: We present quasi-experimental evidence on the effects of increasing the Early Retirement Age (ERA) on older workers' retirement decisions. The analysis is based on social security reforms in Austria in 2000 and 2004, and administrative data allows us to distinguish between pension claims and job exits. Using a Regression Kink Design, we estimate that, within a birth cohort, a 1.0 year increase in the ERA leads to a 0.4 year increase in the average job exiting age and a 0.5 year increase in the average pension claiming age. When the ERA increases, many older workers remain in their jobs longer.
    Keywords: early retirement age; pension reform; regression kink design
    JEL: H55 J22 J26
    Date: 2016–09
  2. By: Raphael Schoenle (Brandeis University); Kristian Ove Myrseth (University of St. Andrews); Rawley Heimer (Federal Reserve Bank of Cleveland)
    Abstract: Subjective mortality beliefs affect pre- and post-retirement consumption and savings decisions, as well as portfolio allocation. Our new survey evidence shows that younger individuals overestimate their mortality at short horizons while older individuals over-estimate their long-run chances of survival. The formation of these beliefs across age cohorts can be attributed to overweighting the most salient causes-of-death, which change over the life-cycle. This bias matters empirically: Survival expectations correlate with heterogeneity in ï¬ nancial education and investment behavior. These beliefs make the young (old) more impatient (patient), and when embedded in a conventional dynamic life-cycle model with pre-cautionary savings, they cause the young to under-save (they have 10% less saved upon retirement) and retirees to not fully draw down their assets (they consume 12% less during retirement). In addition, we propose a few mechanisms through which mortality beliefs could affect the equity premium, particularly through a reduction in the risk free rate.
    Date: 2016
  3. By: Maria D. Fitzpatrick; Timothy J. Moore
    Abstract: Social Security eligibility begins at age 62, and approximately one third of Americans immediately claim benefits upon reaching that age. We study the link between retirement and health by examining whether mortality changes discontinuously at this threshold. Using mortality data that covers the entire U.S. population and includes exact dates of birth and death, we document a robust two percent increase in overall male mortality immediately after age 62. The rise in mortality is closely connected to changes in labor force participation, implying that mortality increases by approximately 20 percent among those who stop working because Social Security is available.
    Date: 2016–08
  4. By: Klimczuk, Andrzej
    Abstract: Jednym ze zjawisk związanych z procesem starzenia się społeczeństw są przemiany systemów gospodarczych zorientowane na produkcję i dystrybucję dóbr i usług dla osób starszych, jak również dla młodszych grup wiekowych w ramach ich przygotowania do starości. Artykuł przybliża główne cechy koncepcji „srebrnej gospodarki” w kontekście realizacji polityki aktywnego starzenia się. Opracowanie przedstawia typologię modeli srebrnej gospodarki w krajach Unii Europejskiej na poziomach krajowym i regionalnym na podstawie wykorzystania porównań indeksu aktywnego starzenia się (Active Ageing Index) do typologii zróżnicowań i kultur kapitalizmu oraz typologii państw dobrobytu. W podsumowaniu przybliżono wnioski dla działań praktycznych oraz propozycje dalszych kierunków badań. ** Some phenomena associated with ageing populations are transition of economies to focus more on the production and distribution of goods and services for older adults as well as for younger age groups as part of their preparation for old age. The paper presents the main features of the concept of “silver economy” in the context of active ageing policies. The study presents a typology of the silver economy models in the European Union at national and regional levels based on the use of the Active Ageing Index in comparison to the typology of differences and cultures of capitalism as well as the typology of welfare states. The summary contains conclusions for practical interventions and proposals for further research.
    Keywords: indeks aktywnego starzenia, rozwój regionalny, srebrna gospodarka, zarządzanie strategiczne, zróżnicowanie/kultury kapitalizmu; Active Ageing Index, regional development, silver economy, strategic management, varieties/cultures of capitalism
    JEL: J14 O57 R19
    Date: 2016
  5. By: Giorgio Di Gessa; Karen Glaser; Debora Price; Eloi Ribe; Anthea Tinker
    Abstract: Objectives. Grandparents play an important role in looking after grandchildren, although intensive grandparental childcare varies considerably across Europe. Few studies have explicitly investigated the extent to which such cross-national variations are associated with national level differences in individual demographic and socio-economic distributions along with contextual-structural and cultural factors (e.g., variations in female labor force participation, childcare provision, and cultural attitudes). Methods. We used multilevel models to examine associations between intensive grandparental childcare and contextual-structural and cultural factors, after controlling for grandparent, parent, and child characteristics using nationally representative data from the Survey of Health, Ageing and Retirement in Europe. Results. Even controlling for cross-national differences in demographic and socio-economic distributions, contextual-structural factors play an important role in explaining grandparental childcare variations in Europe. In particular, higher levels of intensive grandparental childcare are found in countries with low labor force participation among younger and older women, and low formal childcare provision, where mothers in paid work largely rely on grandparental support on an almost daily basis. Discussion. Encouraging older women to remain in paid work is likely to have an impact on grandchild care which in turn may affect mothers’ employment, particularly in Southern European countries where there is little formal childcare.
    Keywords: Europe; Grandparents; Childcare; Female labor force participation; Intergenerational relationships; SHARE.
    JEL: R14 J01
    Date: 2015–08–26
  6. By: Smolkin, Anton (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: In this paper, an analysis of the key characteristics of the social status of the elderly in Russia was made. The situation of intergenerational contacts in a number of cases initially is potentially a conflict: youth is characterized by cautious, indifferent attitudes towards older people. Negative expectations of each party to help interpret any ambiguous actions of the other as a potential conflict, which exacerbates the situation, leaving no place that could be described as "neutral behavior." Restrictions on the media representatives of the third age contributes to a specific behavioral practices that give a tactical advantage, but the potential to lower the status of the elderly person and help to perpetuate negative stereotypes about old age.
    Keywords: elderly, Russia, age politics
    Date: 2016–06–07
  7. By: Jäger, Philipp
    Abstract: Public investment, for instance in infrastructure, has been constantly decreasing for four decades. New research by RWI for 13 OECD-countries shows: this development significantly correlates with population aging. Senior citizens do not value future payoffs of infrastructure projects and other public investments as much as working-age-individuals since people's time preferences change with age. Because of their growing voting power, elderly voters exhibit an increasing influence on policy proposals of political parties. To counter these effects, politicians should consider demeny voting, where parents get additional votes for each child. Other options include user-pay-infrastructure or alternative funding sources like Public Private Partnerships.
    Date: 2016
  8. By: Safi, Fatma
    Abstract: This paper presents a simple two-period overlapping generation's model with uncertain lifetimes that contains environmental and health issues. It investigates an intergenerational conflict between old and young generations as regards two defensive expenditures, offsetting the influence of a worsening environment, represented here by health care and environmental investment. Workers support environmental maintenance while retirees prefer investing in healthcare. The author shows that an increasing support for private health expenditures in an aging economy leads to a higher level of capital accumulation and leads also to a higher level of environmental quality only if the maintenance efforts are larger than consumption externalities.
    Keywords: aging,environmental expenditures,environmental quality,overlapping generations,age-based conflict
    JEL: D91 J11 Q20
    Date: 2016
  9. By: International Monetary Fund. European Dept.
    Abstract: This Selected Issues paper discusses the impact of workforce aging on productivity in the euro area. The euro area population has aged considerably over the past few decades, and the process is expected to accelerate in the years ahead. At the same time, labor productivity growth in the euro area has been sluggish, posing risks to long-term growth prospects. It is estimated that workforce aging could significantly retard total factor productivity (TFP) growth over the medium to long term. Given current demographic projections from the Organisation for Economic Co-operation and Development, the aging of the workforce in the euro area could lower TFP growth by about 0.2 percentage points each year between 2014 and 2035. Appropriate policies can, however, mitigate the adverse effects of aging.
    Keywords: Aging;Labor productivity;Corporate sector;Debt;Investment;Monetary policy;Negative interest rates;Interest rate policy;Fiscal policy;Economic growth;Selected Issues Papers;Euro Area;
    Date: 2016–07–08
  10. By: Korotaev, Andrey Vitalievich (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Shulgin, Sergei (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Arkhangelskiy , Vladimir (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Zinkina, Yulia Viktorovna (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: In this work, utilising United Nations population projections and the index of instability of states, the possible implications of demographic change in the age structure of the regional and global level are analyzed. The changes in the age structure of the population and the possible consequences of changes in the age structure are analyzed using the World Values Survey data (World Values Survey), both for individual countries and for entire groups of countries.
    Keywords: United Nations, population, demography, age structure
    Date: 2016–06–07
  11. By: Klimczuk, Andrzej
    Abstract: The approach to analysing population ageing and its impacts on the economy has evolved in recent years. There is increasing interest in the development and use of products and services related to gerontechnology as well as other social innovations that may be considered as central parts of the “silver economy.” However, the concept of silver economy is still being formed and requires detailed research. This article proposes a typology of models of the silver economy in the European Union (EU) at the national and regional levels. This typology was created by comparing the Active Ageing Index to the typology of varieties and cultures of capitalism and typology of the welfare states. Practical recommendations for institutions of the EU and directions for further research are discussed.
    Keywords: Active ageing index; regional development; silver economy; varieties/cultures of capitalism; welfare state
    JEL: J14 O57 R19
    Date: 2016
  12. By: Fengming Chen; Hiroshi Yoshida
    Abstract: This study examines the effects of the number of children on the living arrangements of married and widowed individuals using data from the 2008 wave of the Chinese Longitudinal Healthy Longevity Survey. While the literature offers mixed results owing to the endogeneity bias from the number of children, we use sex dummy variables of the first and second parity as instrumental variables to correct the bias and find that the number of children has a statistically significant and positive effect on the probability of cohabitation for both subsamples. The magnitude of this effect in the widowed subsample is about 1.64 times that in the married subsample, indicating that children play a more important role in the case of widowed individuals.
    Date: 2016–08
  13. By: Frédéric Gannon (EconomiX); Stéphane Hamayon; Florence Legros (Laboratoire Structure et Dynamiques Financières); Vincent Touze (Observatoire français des conjonctures économiques)
    Abstract: In this paper, we apply two types of automatic balance mechanism (ABM) to the French first pillar pension system for private sector employees (CNAV). One is based on a tax gap ratio (TGR-ABM) and the other is the smooth ABM (S-ABM) developed by Gannon, Legros and Touzé (2013). Two long-run forecast scenarios over the period 2014-2063 are analysed. The first is optimistic (“benchmark”) and assumes a 4.5% unemployment rate and a 1.5% productivity growth rate in the long run. The second is more pessimistic (“prudent”), with a 7.5% unemployment rate and a 1% productivity growth rate in the long run. For the benchmark (respectively prudent) scenario, a TGR-ABM requires, now and for the next 50 years, a 2.8% (respectively 6.3%) decrease in pensions and a 2.9% (respectively 6.7%) increase in the tax rate. An S-ABM requires, for the benchmark (respectively prudent) scenario, an immediate 1.5% (respectively 3.6%) decrease in pensions and a 1.4% (respectively 3.5%) increase in the tax rate. In the long run (50 years), an S-ABM requires a 4.5% (respectively 9.1%) reduction in pensions and a 4.5% (respectively 9.1%) increase in the tax rate.
    Keywords: Pension scheme sustainability; Automatic balance mechanism
    Date: 2014–11
  14. By: Arkhangelskiy , Vladimir (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Shulgin, Sergei (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Efremov, Igor (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Pustovalov, Denis Nikolaevich (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The paper substantiates the methodology of construction of scenarios for the main demographic processes: fertility, mortality and migration. For the four scenarios (most likely, pessimistic, optimistic, and super optimistic) calculations of demographic trajectories are made. This paper presents the trajectory and scenarios for Russia as a whole. For derived demographic trajectories of the analysis of the population structure and describes the possible consequences of the upcoming changes.
    Keywords: demography, scenarios, Russia
    Date: 2016–06–07
  15. By: International Monetary Fund. European Dept.
    Abstract: This paper analyzes the macroeconomic impact of targeted labor market reforms aimed at boosting employment and labor productivity and the price responsiveness of German residential investment. Germany’s population is getting older, and potential growth is set to decline. Demographic projections suggest that labor force will start declining around 2020, and will drop at an accelerating pace once immigration flows normalize. After years of stagnation, German housing prices and new residential rents have increased more steeply since 2009, especially in large cities. This paper provides econometric evidence that supply response to changes in housing prices has declined over the past several years and discusses how various housing policies can foster this response.
    Keywords: Labor supply;Women;Aging;Population;Immigration;Labor markets;Labor market reforms;Housing prices;Selected Issues Papers;Germany;
    Date: 2016–06–29
  16. By: Korotaev, Andrey Vitalievich (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Shulgin, Sergei (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Arkhangelskiy , Vladimir (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Zinkina, Yulia Viktorovna (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: In this paper the countries are classified by type of demographic behavior. Methods of scenario computer simulation were used to develop a series of scenarios of the demographic future of the BRIC countries.
    Keywords: demographic behavior, scenario computer simulation, BRIC
    Date: 2016–06–07

This nep-age issue is ©2016 by Claudia Villosio. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.