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on Economics of Ageing |
| By: | Marcelo Abi-Ramia Caetano; Leonardo Alves Rangel; Eduardo da Silva Pereira; Graziela Ansiliero; Henrique Paiva |
| Abstract: | Este estudo tem como objetivos: i) avaliar as recentes alterações no fator previdenciário, do Regime Geral de Previdência Social (RGPS), produzidas pela Lei no 13.183, de 4 de novembro de 2015, e seus impactos distributivos e financeiros, de curto e longo prazo; ii) apresentar, de forma comparativa, as regras da aposentadoria por tempo de contribuição (ATC) do RGPS; e iii) avaliar cenários de introdução de idade mínima para aposentadoria nesse regime. O virtual fim do fator previdenciário (Lei no 13.318/2015) eleva as despesas previdenciárias brasileiras no longo prazo e as torna mais regressivas, o que aumenta as desigualdades individuais e regionais de renda. Isso é preocupante, já que a trajetória das despesas com benefícios do RGPS aponta para forte crescimento no longo prazo (2060). Em parte, essa trajetória é consequência das regras brasileiras de ATCs, que não respeitam a boa prática internacional e são adotadas por apenas outros treze países – em 177 cujas regras são compiladas pela Associação Internacional de Seguridade Social (AISS). A evolução demográfica projetada para as próximas décadas torna o quadro da administração previdenciária desafiador: em 2060, teremos cerca de duas pessoas em idade ativa (entre os 15 e os 64 anos) para cada idoso de 65 anos ou mais. O cenário de adoção da idade mínima de 65/60 anos para homens/mulheres melhora, na margem, a trajetória das despesas previdenciárias – mas outras reformas se mostram necessárias. The objectives of this paper are i) to assess the recent changes in the “actuarial factor” and their distributive and financial impacts in the short and long term. The actuarial factor was created in 1999 to adjust the individual benefit level according to age, time of contribution and life expectancy at the time benefit is granted and was made optional by Law 13.183/2015; ii) to present the rules of old age pensions in Brazil, from a comparative perspective; and iii) to assess scenarios for pension reforms in Brazil, considering the introduction of a minimum wage rule.Law 13.318/2015 will increase social security expenditures in the long term (as compared to the previous scenario) and make these expenditures more regressive, increasing individual and regional economic inequalities in Brazil. As projections for the basic scenario already suggest a strong increase in social security expenditures, any additional increase is a reason for concern. Projections for the basic scenario are influenced by rules for old age pensions in Brazil, that do not follow the international best practices and that are adopted in only 13 other countries (among the 177 whose regulations are compiled by the International Social Security Association).Projections for the demographic evolution over the next decades point to a challenging scenario regarding the social security management in Brazil. By 2060, the country will have two working-age people for each person aged 65 or more. Adopting a minimum age threshold of 65/60 years for men/women, respectively, to have access to old age pensions will only marginally improve the trajectory of social security expenditures in the long term – suggesting that other reforms will be necessary. |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:2230&r=age |
| By: | Ayuso, Mercedes (University of Barcelona); Bravo, Jorge Miguel (Universidade Nova de Lisboa); Holzmann, Robert (University of New South Wales) |
| Abstract: | This paper demonstrates that the link between heterogeneity in longevity and lifetime income across countries is mostly high and often increasing; that it translates into an implicit tax/subsidy, with rates reaching 20 percent and higher in some countries; that such rates risk perverting redistributive objectives of pension schemes and distorting individual lifecycle labor supply and savings decisions; and that this in turn risks invalidating current reform approaches of a closer contribution-benefit link and life expectancy-indexed retirement age. All of this calls for mechanisms that neutralize or at least significantly reduce the effects of heterogeneity in longevity through changes in pension design. The paper suggests and explores a number of interventions in the accumulation, benefit determination, and disbursement stages. Among the explored approaches, a two-tier contribution structure seems promising, as a moderate social contribution rate that is already proportionally allocated to the average contribution base is able to broadly compensate for empirically established heterogeneity in the life expectancy/lifetime income relationship. |
| Keywords: | defined contribution scheme, two-tier contribution structure, proxied life expectancy, tax/subsidy structure |
| JEL: | D9 G22 H55 J13 J14 J16 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10378&r=age |
| By: | Carin van der Cruijsen; Nicole Jonker |
| Abstract: | This paper studies the influence of people's expectations about expenses during retirement and trust in pension funds on preferences for different pension arrangements. We find that although most workers prefer a flat-rate annuity, many workers want to deviate from it. The most popular option is a high/low, annuity-based profile, followed by a partial lump sum payment. One of the underlying reasons for preferring a more flexible pattern is an expected shift in expenditure during retirement. Our regressions reveal that workers who expect declining expenses during retirement are more likely to opt for a high/low annuity-based pension and/or a lump sum payment at retirement than workers who expect stable expenses. Furthermore, we find that workers and pensioners who do not trust their pension fund are more likely to prefer a lump sum over annuity-based arrangements than workers and pensioners with a high degree of trust. |
| Keywords: | consumption; trust; pension annuities; lump sum |
| JEL: | D14 D91 G20 J26 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:535&r=age |
| By: | Richard Blundell (Institute for Fiscal Studies); Jack Britton (Institute for Fiscal Studies); Monica Costa Dias (Institute for Fiscal Studies); Eric French (Institute for Fiscal Studies) |
| Abstract: | Using data from the Health and Retirement Study (HRS) and the English Longitudinal Study of Ageing (ELSA), we estimate a dynamic model of health and employment. We estimate how transitory and persistent health shocks affect employment over time. In a first step we formulate and estimate a dynamic model of health. The procedure accounts for measurement error and the possibility that people might justify their employment status by reporting bad health. We find that health is well represented by the sum of a transitory white noise process and a persistent AR(1) process. Next, we use the method of simulated moments to estimate the employment response to these shocks. We find that persistent shocks have much bigger effects on employment than transitory shocks, and that these persistent shocks are long lived. For this reason employment is strongly correlated with lagged health, a fact that the usual cross sectional estimates do not account for. We also show that accounting for the dynamics of health and employment leads to larger estimates of the effect of health on employment than what simple OLS estimates of health on employment would imply. We argue that the dynamic effect of health on employment could be generated by a model with human capital accumulation, where negative health shocks slowly reduce the human capital stock, and thus gradually causes people to exit the labor market. |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp348&r=age |
| By: | P.L. de Zwart (University Medical Center Groningen, The Netherlands); P. Bakx (Erasmus University Rotterdam, The Netherlands); E.K.A. van Doorslaer (Erasmus University Rotterdam, The Netherlands) |
| Abstract: | Informal care may substitute for formal long-term care that is often publicly funded or subsidized. The costs of informal caregiving are borne by the caregiver and may consist of worse health outcomes and, if the caregiver has not retired, worse labor market outcomes. We estimate the impact of providing informal care to one’s partner on the caregiver's health using data from the Survey of Health, Ageing and Retirement in Europe (SHARE). We exploit the panel structure of the data and use statistical matching to deal with selection bias and endogeneity. We find that in the short run caregiving has a substantial negative effect on the health of caregivers. These negative effects should be taken into account when comparing the costs and benefits of formal and informal care provision. These negative effects are potentially short-lived, however: we do not find any evidence that the health effects persist after 4 or 7 years. |
| Keywords: | long term care; informal caregiving; health; SHARE |
| JEL: | I12 I13 I19 |
| Date: | 2016–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20160106&r=age |
| By: | Bansal, Sangeeta; Zilberman, David |
| Abstract: | There is evidence that obesity is a risk to health and longevity of life. This is the first paper to use cross-country data to analyze the effect of obesity levels on life expectancy, and the trade-off between health expenditure and obesity levels. It uses a panel data of 194 countries for the years 2002, 2005 and 2010. We find that life expectancy has non-monotonic relationship with obesity levels. At low prevalence of obesity, life expectancy is increasing in obesity levels, but beyond a certain threshold level of obesity prevalence, an increase in obesity level reduces life expectancy. Countries that spend more on health expenditure are able to counter the effects of increased obesity on life expectancy. Incremental effect of health expenditure in enhancing life expectancy is higher for countries where obesity prevalence is low. The impact of health expenditure on increasing life expectancy is higher for women. The results are consistent over three data sets: when the health indicator is life expectancy at birth, mortality rate between age group 15-60 years, and healthy life expectancy. |
| Keywords: | Health Economics and Policy, |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:assa17:250115&r=age |
| By: | Niimi, Yoko; Horioka, Charles Yuji |
| Abstract: | To help shed light on the implications of intergenerational transfers for wealth inequality, this paper examines whether or not individuals who receive intergenerational transfers from their parents are more likely to leave bequests to their children than those who do not using data for Japan and the United States. The estimation results show that the receipt of intergenerational transfers from parents and/or parents-in-law increases the likelihood of individuals’ leaving bequests to their own children in both Japan and the United States, which in turn is likely to contribute to the persistence or widening of wealth disparities. However, such a tendency is found to be stronger among less better-off households in both countries, and this may help alleviate the disequalizing effect of intergenerational transfers on the distribution of wealth, at least to some extent. |
| Keywords: | bequests, education, inheritances, intergenerational transfers, inter vivos transfers, wealth distribution, wealth inequality, bequests, education, inheritances, intergenerational transfers, inter vivos transfers, wealth distribution, wealth inequality, D10, D31, D64, E21, I24 |
| URL: | http://d.repec.org/n?u=RePEc:agi:wpaper:00000117&r=age |
| By: | Nguyen, Ha; Connelly, Luke B. |
| Abstract: | This study contributes to a small literature on the dynamics of informal care by examining the informal care provision choices of working age Australians. We focus on the impact of previous work characteristics (including work security and flexibility) on subsequent care provision decisions and distinguish between care that is provided to people who cohabit and people who reside elsewhere, as well as between the provision of care as the primary caregiver, or in a secondary caring role. Our dynamic framework of informal care provision accounts for state-dependence, unobserved heterogeneity and initial conditions. For both males and females, we find the existence of positive state-dependence in all care states in both the short- and medium-term. Furthermore, the inertia in care provision appears to be stronger for more intensive care. We also find previous employment status has a significant deterrent effect on current care provision decisions. The effects on employment, however, differ according to the type of previous work, the type of care currently provided, and the gender of the caregiver. We also find that workers with perceptions of greater job security are nevertheless less likely to provide subsequent care. Our results also suggest that workers’ perceptions about work flexibility and their stated overall satisfaction with work actually have no impact on their subsequent decisions to provide care in any capacity. |
| Keywords: | informal care, labour supply, dynamic multinomial choice models, panel data |
| JEL: | C23 J14 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75331&r=age |
| By: | Miyake, Atsushi; Yasuoka, Masaya |
| Abstract: | This paper presents consideration of the effects of child allowances and subsidies for private education investment on fertility and private education investment. The level of public education expenditure plays an important role in the effects of child care policies. To raise fertility, although child allowances are effective in an economy with low public education investment, subsidies for education investment are effective in an economy for which public education investment is high. The results presented in this paper are helpful for reconciling the conflicting results reported from previous studies. In addition, this paper presents an examination of the effects of those child care policies on pension benefits. A subsidy for private education can raise both fertility and pension benefits. |
| Keywords: | Fertility, Child allowance, Subsidy for education investment |
| JEL: | D91 H52 H55 I2 J13 |
| Date: | 2016–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75315&r=age |
| By: | Raimond Maurer (Goethe University of Frankfurt); Olivia S. Mitchell (The Wharton School of the University of Pennsylvania) |
| Abstract: | We designed and fielded an experimental module in the 2014 HRS which seeks to measure older persons’ willingness to voluntarily defer claiming of Social Security benefits. In addition we evaluate the stated willingness of older individuals to work longer, depending on the Social Security incentives offered to delay claiming their benefits. Our project extends previous work by analyzing the results from our HRS module and comparing findings from other data sources, which included very much smaller samples of older persons. We show that half of the respondents would delay claiming if no work requirement were in place under the status quo, and only slightly fewer, 46 percent, with a work requirement. We also asked respondents how large a lump sum they would need with or without a work requirement. In the former case, the average amount needed to induce delayed claiming was about $60,400, while when part-time work was required, the average was $66,700. This implies a low utility value of leisure foregone of only $6,300, or about 10 percent of older households’ income. |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp346&r=age |