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on Economics of Ageing |
| By: | Stancanelli, Elena G. F. (Paris Jourdan Sciences Economiques) |
| Abstract: | Retirement policies are individually designed but the majority of people of retirement age live as couples. We estimate the effects of a French pension reform on spouses' employment decisions. We use labor-force survey data, pooled over different years, on fifty thousand French couples and apply a regression discontinuity framework, also controlling for couple's unobserved heterogeneity. We conclude that the reform immediately reduced both spouses' retirement probability. The wife's retirement probability also drops by 1 to 4 percentage points if the husband is hit by the reform, and vice-versa. Instrumenting spousal retirement with legal retirement age, own retirement probability rises by 2 to 6 percentage points upon spousal retirement. |
| Keywords: | policy evaluation, retirement, ageing |
| JEL: | J14 C1 C36 D04 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10322&r=age |
| By: | Barbara Engels; Johannes Geyer; Peter Haan |
| Abstract: | In this paper we exploit a cohort-specific pension reform to estimate the causal labour market effects of changes in the financial incentives to retire. In particular, we analyze the effects of the introduction of cohort-specific deductions for early retirement on female retirement, employment and unemployment. For the empirical analysis we use high-quality administrative data from the German pension insurance. We present evidence for sizable labour market effects. In addition to direct effects on women older than 60 we find important anticipation effects before reaching the pension eligibility age. Overall we document that the pension reform leads to a postponement of retirement, an increase in employment and a shifting in unemployment over age rather than a substitution into unemployment. |
| Keywords: | Retirement age, pension reform, labour supply, actuarial deductions, cohort-specific pension reform, labour market effects |
| JEL: | J14 J18 J22 J26 H21 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1617&r=age |
| By: | Ryuta Ray Kato (International University of Japan) |
| Abstract: | This paper numerically examines the impact of the financial and time cost of child care as well as elderly care on economic growth and welfare in an aging Japan within a dynamic general equilibrium framework of multi-period overlapping generations with endogenized labor supply. Simulation results indicate that the replacement rate of the public pension scheme becomes below 50 percent from year 2039, even if the currently accumulated public pension funds are used up for paying pension benefits by year 2115. Financial burdens for the first group (age 65 and over) and for the second group (age 40 - 64) in the public long-term care insurance in year 2060 become more than double and more than five times as much as the level of year 2010 in an aging Japan, respectively. While increased child benefits stimulate savings and thus they improve welfare, the impact of elimination of the time cost of child care and elderly care is quite mixed, depending on the gender and job contract types of workers within the household. When the time cost of elderly care spent by all workers irrespective of gender and job contract types is eliminated, many generations enjoy welfare gain, but when the time cost of child care by all workers is eliminated, then almost all generations, except for relatively elder generations, reversely suffer from welfare loss. When a starting age to contribute to the long-term care insurance becomes earlier from the current age of 40 to age 35, welfare of all generations improves. |
| Keywords: | Child Care, Child Benefits, Elderly Care, Long-Term Care Insurance, Public Pension, Female Labor Supply, Aging, Economic Growth, Simulation, CGE Model |
| JEL: | C68 H51 E62 H55 J16 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:iuj:wpaper:ems_2016_13&r=age |
| By: | David E. Bloom (Harvard T. H. Chan School of Public Health); Dara Lee Luca (Mathematica Policy Research) |
| Abstract: | Population ageing is the 21st century’s dominant demographic phenomenon. Declining fertility, increasing longevity, and the progression of large-sized cohorts to the older ages are causing elder shares to rise throughout the world. The phenomenon of population ageing, which is unprecedented in human history, brings with it sweeping changes in population needs and capacities, with potentially significant implications for employment, savings, consumption, economic growth, asset values, and fiscal balance. This chapter provides a broad overview of the global demography of aging. It reviews patterns, trends, and projections involving various indicators of population aging and their demographic antecedents and sequelae. The chapter also reviews theories economists use to explain the behavioral changes driving the most prominent demographic shifts. Finally, it discusses the changing nature of aging, the future of longevity, and associated policy implications, highlighting some key research issues that require further examination. JEL Codes: J11; J14; N30 |
| Keywords: | Population aging; Economic demography; Longevity |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:13016&r=age |
| By: | Bertoni, Marco (university of padova); Brunello, Giorgio (university of padova); Mazzarella, Gianluca (university of padova) |
| Abstract: | By increasing the residual working horizon of employed individuals, pension reforms that raise minimum retirement age are likely to affect the returns to investments in healthpromoting behaviours before retirement, with consequences for individual health. Using the exogenous variation in minimum retirement age induced by a sequence of Italian pension reforms during the 1990s and 2000s, we show that Italian males aged 40 to 49 reacted to the longer time to retirement by raising regular exercise and by reducing smoking and regular alcohol consumption. Dietary habits were also affected, with positive consequences on obesity and self-reported satisfaction with health. |
| Keywords: | retirement, working horizon, healthy behaviours, pension reforms |
| JEL: | H55 I12 J26 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umaror:2016007&r=age |
| By: | David E. Bloom (Harvard T. H. Chan School of Public Health); Elizabeth Mitgang (Georgetown University Center on Medical Product Access, Safety, and Stewardship); Benjamin Osher (Massachusetts General Hospital) |
| Abstract: | Individuals aged 65 years and older currently make up a larger share of the population than ever before, and this group is predicted to continue growing both in absolute terms and relative to the rest of the population. This chapter begins by introducing the facts, figures, and forecasts surrounding the aging of populations across different countries at varying levels of development. In light of these trends, we examine challenges facing graying societies through the lenses of health, economics, and policy development. The chapter concludes with a selection of adaptable strategies that countries might consider to mitigate the strain—and to harness the full potential— of aging populations worldwide. JEL Codes: |
| Keywords: | Demography, health economics, health policy, noncommunicable diseases (NCDs), population aging |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:1316&r=age |
| By: | Arunika Agarwal (Harvard T. H. Chan School of Public Health); Alyssa Lubet (Harvard T. H. Chan School of Public Health); Elizabeth Mitgang (Georgetown University Center on Medical Product Access, Safety, and Stewardship); S.K. Mohanty (International Institute for Population Sciences); David E. Bloom (Harvard T. H. Chan School of Public Health) |
| Abstract: | India, one of the world’s two population superpowers, is undergoing unprecedented demographic changes. Increasing longevity and falling fertility have resulted in a dramatic increase in the population of adults aged 60 and up, in both absolute and relative terms. This change presents wideranging and complex health, social, and economic challenges, both current and future, to which this diverse and heterogeneous country must rapidly adapt. This chapter first lays out the context, scope, and magnitude of India’s demographic changes. It then details the major challenges these shifts pose in the interconnected areas of health, especially the massive challenges of a growing burden of noncommunicable diseases; gender, particularly the needs and vulnerabilities of an increasingly female older adult population; and income security. This chapter also presents an overview of India’s recent and ongoing initiatives to adapt to population aging and provide support to older adults and their families. It concludes with policy recommendations that may serve as a productive next step forward, keeping in mind the need for urgent and timely action on the part of government, private companies, researchers, and general population. JEL Codes: J11; J14; N30 |
| Keywords: | Population aging; Economic demography; Longevity |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:13216&r=age |
| By: | Fisch, Jill E.; Wilkinson-Ryan, Tess; Firth, Kristin |
| Abstract: | The dramatic shift from traditional pension plans to participantdirected 401(k) plans has increased the decision-making responsibility of individual investors for their own retirement planning. With this shift comes increasing evidence that investors are making poor decisions in choosing how much to save for retirement and in selecting among their investment options. Studies question the value of efforts to improve these decisions through regulatory reforms or investor education. This article posits that deficiencies in workplace retirement savings cannot be adequately addressed until the reasons for poor investment decisions are better understood. We report the results of an exploratory study that asked subjects to complete a simulated retirement investment task and collected information about their financial knowledge and preferences. The study enabled us to measure financial literacy and evaluate its relationship to retirement investment decision-making. In line with existing research, we found a strong relationship between financial literacy and successful retirement investing. Our results suggest, however, that the relevant understanding in this context is not about math so much as it is a basic knowledge of the relative costs and benefits of the major investment categories. Finally, we present results suggesting that financial literacy is separate from investment preferences - specifically, that tolerance for risk is a separate and highly predictive variable in estimating retirement planning success. Our research suggests that individual employees are likely to lack the skills necessary to support the current regulatory model of participant-directed retirement investing. The structure and regulation of retirement plans ought to take this fact seriously. We explore the potential for investor education and professional advice, respectively, to overcome the limitations of individualized choice. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:554&r=age |
| By: | Dotti, Valerio |
| Abstract: | I investigate the effects of population ageing on immigration policies. Voters' attitude towards immigrants depends on how the net gains from immigration are divided up in the society by the fiscal policy. In the theoretical literature this aspect is treated as exogenous to the political process because of technical constraints. This generates inconsistent predictions about the policy outcome. I adopt a new equilibrium concept for voting models to analyse the endogenous relationship between immigration and fiscal policies and solve this apparent inconsistency. I show that the elderly and the poor have a common interest in limiting immigration and in increasing public spending. This exacerbates the effects of population ageing on public finances and results in a high tax burden on working age individuals and further worsens the age profile of the population. Moreover, I show that if the share of elderly population is suffciently large, then a society is unambiguously harmed by the tightening in the immigration policy caused by the demographic change. The implications of the model are consistent with the patterns observed in UK attitudinal data and in line with the findings of the empirical literature about migration. |
| Keywords: | Immigration , Ageing , Policy , Voting |
| JEL: | D72 C71 J61 H55 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:mnh:wpaper:41185&r=age |
| By: | Bhalotra, Sonia R. (University of Essex); Karlsson, Martin (University of Duisburg-Essen); Nilsson, Therese (Lund University); Schwarz, Nina (University of Duisburg-Essen) |
| Abstract: | We estimate impacts of exposure to an infant health intervention trialled in Sweden in the early 1930s using purposively digitised birth registers linked to school catalogues, census files and tax records to generate longitudinal microdata that track individuals through five stages of the life-course, from birth to age 71. This allows us to measure impacts on childhood health and cognitive skills at ages 7 and 10, educational and occupational choice at age 16-20, employment, earnings and occupation at age 36-40, and pension income at age 71. Leveraging quasi-random variation in eligibility by birth date and birth parish, we estimate that an additional year of exposure was associated with improved reading and writing skills in primary school, and increased enrolment in university and apprenticeship in late adolescence. These changes are larger and more robust for men, but we find increases in secondary school completion which are unique to women. In the longer run, we find very substantial increases in employment (especially in the public sector) and income among women, alongside absolutely no impacts among men. We suggest that this may be, at least in part, because these cohorts were exposed to a massive expansion of the Swedish welfare state, which created more jobs for women than for men. |
| Keywords: | infant health, early life interventions, cognitive skills, education, earnings, occupational choice, programme evaluation, Sweden |
| JEL: | I15 I18 H41 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10339&r=age |
| By: | Fujita, Shigeru (Federal Reserve Bank of Philadelphia); Fujiwara, Ippei (Keio University and Australian National University) |
| Abstract: | This paper explores a causal link between aging of the labor force and declining trends in the real interest rate and inflation in Japan. We develop a New Keynesian search/matching model that features heterogeneities in age and firm-specific skills. Using the model, we examine the long-run implications of the sharp drop in labor force entry in the 1970s. We show that the changes in the demographic structure induce significant low-frequency movements in per-capita consumption growth and the real interest rate. They also lead to similar movements in the inflation rate when the monetary policy follows the standard Taylor rule, failing to recognize the timevarying nature of the natural rate of interest. The model suggests that aging of the labor force accounts for roughly 40% of the declines in the real interest rate observed between the 1980s and 2000s in Japan. |
| Keywords: | aging; natural rate; deflation; Japan |
| JEL: | E24 E31 E52 |
| Date: | 2016–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:16-29&r=age |
| By: | Jinkook Lee (Rand Corporation); Mark E. McGovern (Harvard Center for Population and Development Studies); David E. Bloom (Harvard T. H. Chan School of Public Health); P. Arokiasamy (International Institute for Population Studies); Arun Risbud (National AIDS Research Institute, Pune (NARI)); Jennifer O’Brien; Varsha Kale; Perry Hu (Division of Geriatrics, UCLA School of Medicine) |
| Abstract: | This paper examines health disparities in biomarkers among a representative sample of Indians aged 45 and older, using data from the pilot round of the Longitudinal Aging Study in India (LASI). Hemoglobin level, a marker for anemia, is lower for respondents with no schooling (0.7 g/dL less in the adjusted model) compared to those with some formal education. There are also substantial state and education gradients in underweight and overweight. The oldest old have higher levels of C-reactive protein (CRP) (1.1 mg/L greater than those aged 45-54), an indicator of inflammation and a risk factor for cardiovascular disease, as do those with greater body-mass index (an additional 1.2 mg/L for those who are obese compared to those who are of normal weight). We find no evidence of educational or gender differences in CRP, but respondents living in rural areas have CRP levels that are 0.8 mg/L lower than urban areas. We also find state-level disparities, with Kerala residents exhibiting the lowest CRP levels (1.96 mg/L compared to 3.28 mg/L in Rajasthan, the state with the highest CRP). We use the Blinder-Oaxaca decomposition approach to explain group-level differences, and find that state-level gradients in CRP are mainly due to heterogeneity in the association of the observed characteristics of respondents with CRP, as opposed to differences in the distribution of endowments across the sampled state populations. JEL Codes: I12, I14, D30, O15 |
| Keywords: | Biomarkers, Health Disparities, Gender Differences, Blinder-Oaxaca Decomposition, Aging |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:12115&r=age |
| By: | David E. Bloom (Harvard T. H. Chan School of Public Health); Perry Hu (Division of Geriatrics, UCLA School of Medicine); P. Arokiasamy (International Institute for Population Studies); Arun Risbud (National AIDS Research Institute, Pune (NARI)); T. V. Sekher (Department of Population Policies & Programs, International Institute for Population Sciences); S.K. Mohanty (International Institute for Population Sciences); Varsha Kale; Jennifer O’Brien; Jinkook Lee (Rand Corporation) |
| Abstract: | JEL Codes: |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:11414&r=age |
| By: | David E. Bloom (Harvard T. H. Chan School of Public Health); Alfonso Sousa-Poza (University of Hohenheim, Stuttgart) |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:9813&r=age |
| By: | David E. Bloom (Harvard T. H. Chan School of Public Health); J. W. Lorsch (Harvard Business School) |
| Abstract: | JEL Codes: |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:12215&r=age |
| By: | Jens Kvaerner |
| Abstract: | This paper investigates how a shock to life expectancy, resulting from a cancer diagnosis, impacts consumption and saving decisions. I infer bequest motives by using a unique data set containing individual cancer diagnoses and wealth of all citizens in Norway. Cancer diagnoses are useful instruments for identifying bequest motives because they provide new information about life expectancy, which affects a person’s consumption plan differently depending on the relative strength of bequest and classical life-cycle-savings motives. My empirical estimates show strong evidence for bequest motives. A spouse creates a direct bequest motive; couples tend to respond to a cancer diagnosis by saving more. This result holds both across the wealth distribution and over the life-cycle. In contrast to couples, singles respond to a cancer diagnosis by spending more. However, a large part of the decrease in financial wealth among singles with children reflects transfers of wealth during a person’s lifetime, so-called inter vivos transfers. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed016:1381&r=age |
| By: | Cervellati, Matteo (IZA Bonn, and University of Bologna); Sunde, Uwe (IZA Bonn, and University of Munich); Zimmermann, Klaus F. (UNU-MERIT, and Princeton University) |
| Abstract: | This paper takes a global, long-run perspective on the recent debate about secular stagnation, which has so far mainly focused on the short term. The analysis is motivated by observing the interplay between the economic and demographic transition that has occurred in the developed world over the past 150 years. To the extent that high growth rates in the past have partly been the consequence of singular changes during the economic and demographic transition, growth is likely to become more moderate once the transition is completed. At the same time, a similar transition is on its way in most developing countries, with profound consequences for the development prospects in these countries, but also for global comparative development. The evidence presented here suggests that long-run development dynamics have potentially important implications for the prospects of human and physical capital accumulation, the evolution of productivity and the question of secular stagnation. |
| Keywords: | secular stagnation, long-term development, income growth, demographic transition |
| JEL: | C54 E10 J11 J13 J18 N30 O10 O40 |
| Date: | 2016–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2016049&r=age |