nep-age New Economics Papers
on Economics of Ageing
Issue of 2016‒09‒25
fourteen papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Детерминанты пенсионного возраста: обзор исследований By Даниелян, Владимир
  2. Changes in morbidity over time: Evidence from Europe By Heger, Dörte; Kolodziej, Ingo W.K.
  3. Incentive Fees and Competition in Pension Funds: Evidence from a Regulatory Experiment By Assaf Hamdani; Eugene Kandel; Yevgeny Mugerman; Yishay Yafeh
  4. The Role of Social Security in Overall Retirement Resources : A Distributional Perspective By Sebastian Devlin-Foltz; Alice M. Henriques; John Sabelhaus
  5. How Does Student Debt Affect Early-Career Retirement Saving? By Matthew S. Rutledge; Geoffrey T. Sanzenbacher; Francis M. Vitagliano
  6. Taxing Pensions By CREMER, Helmuth; PESTIEAU, Pierre
  7. Derived Pensions Rights and Pension Wealth: an Assessment Using French Data By Christian Rodrigue TAGNE
  8. Gone with the Wind: Demographic Transition and Domestic Saving By Cavallo, Eduardo; Sanchez, Gabriel; Valenzuela, Patricio
  9. What Are the Effects of Doubling Up on Retirement Income and Assets? By Deirdre Pfeiffer; Katrin B. Anacker; Brooks Louton
  10. Sensitivity of Pension Fund's Balance Sheet: a non-linear risk factor approach By Zhun Peng
  11. Does competition in the out-patient sector improve quality of medical care? Evidence from administrative data By Stroka-Wetsch, Magdalena A.; Talmann, Anna; Linder, Roland
  12. In or out? Poverty dynamics among older individuals in the UK By Kanabar, Ricky
  13. Aging and the Inherited Wealth of Nations By ONDER, Harun; PESTIEAU, Pierre
  14. Estimation des échelles d’équivalence des ménages seniors et d’âge actif en France By Ikpidi Badji

  1. By: Даниелян, Владимир
    Abstract: The paper reviews literature on retirement with focus on retirement age determinants. We consider eighteen such determinants including individual characteristics of a worker, family factors, pension system features and socio-economic determinants. We explore, describe and compare findings of both theoretical and empirical works to reveal some stylized facts of older person’s retirement behavior as well as presented in the literature explanations of those facts. By doing that we find existing in the literature discrepancies and sum up considered results to put forward some proposals for future research. Next we try to look how some considered factors impact on Russian workforce and compare it with situation in other countries, using obtained in review information as a background. Предлагается аналитический обзор исследований, посвященных вопросу о том, какие факторы определяют возраст ухода работников с рынка труда. Рассмотрены восемнадцать различных детерминант, включая индивидуальные характеристики работника, семейные факторы, параметры пенсионной системы, социально-экономические характеристики страны. В каждом случае описываются и сопоставляются результаты как теоретических, так и эмпирических работ. Такой подход позволил выявить имеющиеся в литературе разногласия и сформулировать вопросы, подлежащие дальнейшему изучению. В свете полученных выводов представлен сравнительный анализ факторов, влияющих на возраст прекращения трудовой деятельности в России и за рубежом.
    Keywords: детерминанты пенсионного возраста, экономическая активность пожилых, неявный налог пенсионной системы, тестирование нуждаемости, продолжительность жизни, НТП, культурные особенности, retirement age determinants, labor force participation of the older workers, social security implicit tax, income test, life expectancy, technical change, cultural characteristics.
    JEL: H31 H55 J14 J22 J26
    Date: 2016
  2. By: Heger, Dörte; Kolodziej, Ingo W.K.
    Abstract: The elderly are the main beneficiaries of recent gains in life expectancy in the EU. Whether the additional life time is spent in good or in poor health will drastically influence the development of health care costs as morbidity status rather than age per se determines an individual's need for health care services. However, empirical evidence on whether the prolonged lifespan is associated with a compression or an extension of morbidity is still sparse and inconclusive. In this paper, we analyse disability levels in the population 50+ in Europe by age and by proximity to death over time using longitudinal data from the Survey of Health, Ageing, and Retirement in Europe (SHARE). We find that disability levels in Europe have increased due to population ageing and an increase in the prevalence of diseases. The disabling effect of health conditions remained constant over time.
    Keywords: ageing,compression of morbidity,Blinder-Oaxaca decomposition
    JEL: I10 J11 J14
    Date: 2016
  3. By: Assaf Hamdani; Eugene Kandel; Yevgeny Mugerman; Yishay Yafeh
    Abstract: Concerned with excessive risk taking, regulators worldwide generally prohibit private pension funds from charging performance-based fees. Instead, the premise underlying the regulation of private pension schemes (and other retail-oriented funds) is that competition among fund managers should provide them with the adequate incentives to make investment decisions that would serve their clients’ long-term interests. Using a regulatory experiment from Israel, we compare the effects of incentive fees and competition on the performance of three exogenously-given types of long-term savings schemes operated by the same management companies: (i) funds with performance-based fees, facing no competition; (ii) funds with AUM-based fees, facing low competitive pressure; and (iii) funds with AUM-based fees, operating in a highly competitive environment. Our main result is that funds with performance-based fees exhibit significantly higher risk-adjusted returns than other funds, but are not necessarily riskier (that depends on the measure of risk used). By contrast, we find that competitive pressure leads to poor performance, and conclude that incentives and competition are not perfect substitutes in the retirement savings industry. Our analysis suggests that the pervasive regulatory restrictions on the use of performance-based fees in pension fund management may be costly for savers in the long-run.
    JEL: G22 G23 G3
    Date: 2016–09
  4. By: Sebastian Devlin-Foltz; Alice M. Henriques; John Sabelhaus
    Abstract: In this note, we first present trends in participation in employment-related retirement plans, and then provide analysis for one birth cohort, nearing retirement age, of the impact of Social Security on retirement wealth.
    Date: 2016–07–29
  5. By: Matthew S. Rutledge; Geoffrey T. Sanzenbacher; Francis M. Vitagliano
    Abstract: This paper examines the relationship between student loans and retirement saving behavior by 30-year-old workers. Total outstanding student loan debt in the United States has quintupled since 2004. Rising student debt levels mean that young workers must reduce either their consumption or their saving. To what extent do these workers cut back on retirement saving? Existing studies have lacked adequate data or controls for studying this issue: conventional financial datasets include too few younger households; the study samples used include older households whose student debt may be from their children’s education instead of their own; and many studies lack important controls to capture differences between attendees with more or less student debt. This study uses the National Longitudinal Survey of Youth 1997 Cohort, a larger sample of workers turning 30, and includes detailed controls including school quality, parental background, and the underlying ability of the college attendee. The analysis focuses on participation in an employer-sponsored retirement plan and retirement assets as of age 30.
    Date: 2016–09
  6. By: CREMER, Helmuth; PESTIEAU, Pierre (Université catholique de Louvain, CORE, Belgium)
    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
    Date: 2016–03–01
  7. By: Christian Rodrigue TAGNE
    Date: 2016
  8. By: Cavallo, Eduardo (Inter-American Development Bank); Sanchez, Gabriel (Inter-American Development Bank); Valenzuela, Patricio (University of Chile)
    Abstract: This study explores the relationship between demographic factors and saving rates using a panel dataset covering 110 countries between 1963 and 2012. In line with predictions from theory, this paper finds that lower dependency rates and greater longevity increase domestic saving rates. However, these effects are statistically robust only in Asia. In particular, Latin America, which is a region that has undergone a remarkably similar demographic transition, did not experience the same boost in saving rates as Asia. The paper highlights that the potential dividends arising from a favorable demographic transition are not automatically accrued. This is a sobering message at a time when the demographic tide is shifting in the world.
    JEL: E21 J10 O16
    Date: 2016–04
  9. By: Deirdre Pfeiffer; Katrin B. Anacker; Brooks Louton
    Abstract: The Great Recession has amplified the increase in socioeconomic instability and inequality in the United States. While much work has been conducted on retirement income and assets, not much work has been undertaken on seniors moving in with their adult children and grandchildren, possibly to save on housing costs. Utilizing Survey of Income and Program Participation (SIPP) 1996, 2001, 2004, and 2008 data for seniors 65 and older, we conducted descriptive statistics and three types of models. First, we used discrete-time event history modeling to analyze the effect of changes in retirement income, assets, debt, and social welfare program participation between the current and previous interview on the propensity of moving into a multigenerational household, controlling for other factors. Then, we used logistic and linear regression to understand the effect of living in a multigenerational household on changes in seniors’ retirement income, assets, debt, and program participation, controlling for other factors. We also expanded our analyses to control for household type, i.e., a senior moving in with their adult children or grandchildren or vice versa, and for time, i.e., whether the recession impacts our results.
    Date: 2016–09
  10. By: Zhun Peng (University of Evry and EPEE)
    Abstract: In this paper, we study the funding situation of a representative pension fund when it is exposed to extreme shocks of financial markets. We measure the exposure of both asset and liability sides of the fund’s balance sheet and especially when the benefit obligations use a market based discount rate. By assigning different market indexes to the main items of the fund’s balance sheet, we are able to compute the expected funded status conditionally on extreme shocks to different financial markets. We also take into account the links between the corresponding indexes thanks to the CVine Risk Factor (CVRF) model combining factors and copulas. In particular we are able to measure the exposure of the funding status of the fund to extreme shocks to different risk factors (equity, bond, real estate etc...). We find that the fund is particularly exposed to large shocks to the equity risk factor, even if diversification benefits can exist because such shocks simultaneously induce a drop in the asset values and a decrease in the discounted value of the liabilities. However, the first decrease is larger than the second one, thus the funding situation is declined.
    Keywords: Regular vine copula, Factorial model, Pension Funds, Stress testing
    JEL: G23 G32 J32
    Date: 2015
  11. By: Stroka-Wetsch, Magdalena A.; Talmann, Anna; Linder, Roland
    Abstract: We use administrative data from the largest sickness fund in Germany to analyze the relationship between the district density of general and medical practitioner and the quality of care provided to the frail elderly. The quality of care is studied considering prescriptions of potentially inappropriate drugs. We find evidence for a significant positive effect of the share of general and medical practitioners in the population on the provided outpatient health care services.
    Abstract: Im Allgemeinen gilt als eindeutig belegt, dass ein erhöhter Wettbewerb mit sinkenden Preisen und/oder steigender Qualität einhergeht. Da im deutschen Gesundheitssystem Preise für Ärztebehandlungen reguliert sind, kann Wettbewerb in diesem Bereich nur über Qualität ausgeübt werden. Um zu untersuchen ob geringer Wettbewerb, der sich im Extremfall in der Unterversorgung mit sowohl Allgemein- als auch Fachärzten in ländlichen Regionen bemerkbar macht, zu Qualitätsdefiziten führt, analysieren wir den Zusammenhang zwischen der jeweiligen Ärztedichte und der Verschreibung potenziell inadäquater Medikation. Hierzu werden Routinedaten von Deutschlands größter Krankenkasse (der Techniker Krankenkasse) mit über 10 Millionen Versicherten ausgewertet. Diese enthalten u .A. Informationen über die jährlich verschriebenen Tagesdosen von Medikamenten der Priscus-Liste, einer im Jahr 2010 veröffentlichten Aufstellung mit potenziell inadäquater Medikation für ältere Menschen. Die Ergebnisse zeigen signifikante und erhebliche Effekte der Ärztedichte auf die Menge verschriebener Tagesdosen potenziell inadäquater Präparate.
    Keywords: Priscus-list,inappropriate medication,drugs,fixed-effects,administrative data,elderly,competition,quality of medical supply
    JEL: I10
    Date: 2016
  12. By: Kanabar, Ricky
    Abstract: Using the largest household panel survey Understanding Society, this paper investigates low income dynamics among pensioner households in the UK controlling for biases due to initial conditions and non-random survey attrition. Estimation results indicate the presence of a correlation between initial and conditional poverty status, specifically, there is regression toward the mean. The results find no evidence of a correlation between initial poverty status, conditional poverty status and survey attrition. The findings show the importance of benefit income in determining poverty status, suggesting that a dichotomous measure such as poverty status may not suitably reflect actual pensioner living standards. Aside from benefit income, receipt of employer and occupational pension, health, education and subjective financial situation are important in determining initial and conditional poverty status. Stylised examples highlight the significant differences in the ‘poverty experience’ which arise due to differences individual and household characteristics.
    Date: 2016–08–21
  13. By: ONDER, Harun; PESTIEAU, Pierre (Université catholique de Louvain, CORE, Belgium)
    Date: 2016–02–20
  14. By: Ikpidi Badji
    Abstract: To fix the scales of compulsory levies and social benefits for households of different size and composition, public authorities rely on the equivalence scale. Accounting for economies of scale achieved in households (shared public goods), the equivalence scale allows to calculate the additional amount of expenditures or income of a given household, in order to reach the utility level of a one-person household. The value of the equivalence scale depends on the consumption structure or equivalently the lifestyle of households. Is the equivalence scale currently used (applicable to the entire population) and implemented in the 1990s still relevant despite the changes in lifestyles ? Are they adapted to senior households (60 years and more) and working-age households (less than 60 years) whose consumption structure is different from that of the whole population ? How has consumption-specific scales evolved since the 1990s ? This paper uses survey data on family budget (les enquêtes budget des familles) from 1979 to 2010 to estimate the overall equivalence scales applicable to (i) the general population, (ii) subpopulations of seniors and (iii) working-age households as well as (iv) the consumption- specific scales. Our results suggest that the implemented scale in the middle of 1990s is still adapted to current lifestyle. However, this scale underestimates the living standards and economies of scale achieved in senior households and overestimates those of the working-age households.
    Keywords: consumer model, equivalence scale,economies of scale, two-stage least squares
    JEL: C36 D11 D12
    Date: 2016

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