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on Economics of Ageing |
| By: | André Gal Mountian; Maria Dolores Montoya Diaz, Maria Lúcia Lebrão, Yeda Aparecida de Oliveira Duarte |
| Abstract: | This article analyzes the effects of retirement on health of elderly residents in the city of São Paulo, between the years 2000 and 2010. In a context of population aging, it is important to know the effects of labor market exit on health of older people. We use data from Saúde, Bem Estar e Envelhecimento (SABE), longitudinal dataset with elderly in São Paulo. The fixed effect and fixed effects with instrumental variable models were estimated to take into account the possible simultaneity of the decision to stop working and the health status of individuals. Our estimates indicate that retirement improves mobility indicators, especially for men. This result suggests that an increase or setting the minimum retirement age in Brazil may be ccompanied by a rise in spending on health system |
| Keywords: | Retirement; Health; Elderly; Fixed Effects; Instrumental Variable |
| JEL: | I10 J14 C23 C26 |
| Date: | 2016–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2016wpecon25&r=age |
| By: | Yasuoka, Masaya |
| Abstract: | In an aging society with fewer children, a pay-as-you-go pension system presents severe difficulties. A decrease in the share of working people among the population raises the burden for pensions per capita to maintain a constant replacement ratio of pensions. This burden reduces capital accumulation. Therefore, income growth is prevented. The analyses in this paper demonstrate that if the replacement rate of pension is high, a decrease in population growth reduces the income growth rate even if a decrease in population growth can raise the income growth rate per capita because the capital stock that the workers can use increases. However, by setting an appropriate monetary policy for decreasing population growth, the income growth is not prevented by an increase in the burdens for pensions. The negative effect of the burden for pensions on income growth can be eliminated by the change of the money supply rate in the long run. |
| Keywords: | Income growth, Pay-as-you-go pension, Monetary policy, Fewer children |
| JEL: | E52 H55 J11 O42 |
| Date: | 2016–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75578&r=age |
| By: | David Huffman (University of Pittsburgh); Raimond Maurer (Goethe University); Olivia S. Mitchell (The Wharton School of the University of Pennsylvania) |
| Abstract: | This research project evaluates the extent of heterogeneity in time discounting among elderly Americans, as well as its role in explaining older peoples’ key behaviors. We first show how older Americans evaluate simple (hypothetical) intertemporal choices in which payments now are compared with payments in the future. This adds to the literature on time horizon experiments by focusing on a nationally representative sample of persons age 70+. Using the indicators derived from this experiment, we show how differences in discounting patterns are associated with characteristics of particular importance in elderly populations, such as serious health and mental conditions. We then relate our discounting measure to key outcome variables including wealth, the timing of retirement, investments in health, and decisions about end-of-life care. |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp347&r=age |
| By: | Kevin Milligan, Tammy Schirle (Wilfrid Laurier University) |
| Abstract: | We address the health capacity to work among Canadian older workers using two complementary methods, aggregate mortality risk and individual health indicators. We find that men in 2012 would need to work more than five additional years between ages 55-69 to keep pace with how much men in 1976 worked, holding health capacity constant. For working women, the comparable result is only two years more work. Most of these gaps arose before the mid-1990s, as employment advances have offset mortality improvements since then. Regionally, more than half the Ontario-Atlantic employment difference among older men is rooted in health differences. |
| Keywords: | Health, retirement, labour supply |
| JEL: | J14 J21 J26 |
| Date: | 2016–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wlu:lcerpa:0097&r=age |
| By: | Lassila, Jukka; Määttänen, Niku; Valkonen, Tarmo |
| Abstract: | A recent citizens’ initiative calls for a switch from indexing pension benefits to consumer prices (80%) and wages (20%) to full wage indexation. Such a reform could increase private consumption and government tax revenue in the short run. This is especially the case if the increase in pension expenditures is first financed by decumulating pension funds. In the long run, however, the reform would require a much higher contribution rate and result in lower private consumption compared to the current system. The reform would increase pension expenditures slowly but permanently. Therefore, it would be a very clumsy way of stimulating the economy. Possible stimulating effects would not suffice to finance the reform. The reform would benefit especially the cohorts that are about to retire when the reform is implemented. They would receive higher pension benefits throughout their retirement period, without paying higher contributions. All future cohorts would be worse off. |
| Date: | 2016–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:rif:briefs:51&r=age |
| By: | Mi Luo (New York University); Matthew Shapiro (University of Michigan); Joseph Briggs (New York University); Chris Tonetti (Stanford GSB); Andrew Caplin (NYU); John Ameriks (The Vanguard Group, Inc.) |
| Abstract: | This paper examines the effects of inter-generational altruism on late-in-life wealth accumulation. We designed and fielded a new survey to better measure transfers from parents to descendants as part of the Vanguard Research Initiative. New survey features include a carefully designed family inventory, a break-down of transfers into four categories, and a path of past and future expected transfers three years before and after. We also asked Strategic Survey Questions (SSQs) to identify preference parameters related to the desire to insure family risks via transfers. We use these new transfer measurements and SSQs to study the dynamics of parent-to-child giving by estimating a life-cycle consumption-savings model. Agents in our model save for consumption smoothing, uncertain medical and long-term care needs, inter-vivos transfers to cover uncertain family needs, and bequests. We find that there is a large and uncertain family need risk, and parents save in order to help when their descendants most need it, rather than at the end of life. Precautionary saving induced by family risks is quantitatively important in determining elderly wealth levels and inter-generational wealth transmission patterns. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed016:1616&r=age |
| By: | Marianne S. Ulriksen |
| Abstract: | In the early 2000s, there was low elite commitment to social protection in Tanzania. Yet, in 2012, the government officially launched a countrywide social safety net programme, and a year later it announced the introduction of an old age pension. In this article, I explore the reasons for this recent elite commitment to social protection. The analysis takes an ideational approach, and it is shown how the promotion of social protection has been driven by international and domestic institutions with the resources, expertise, and authority to present policy solutions fitting the elite’s general ideas about Tanzania’s development challenges and possible responses thereto. Thus, ideas play an important role in policy development. Attention to the ideas of ruling elites also reveals cases where ideas lose prominence as an explanatory factor. The introduction of the pension fits poorly with dominant views on development and poverty reduction in Tanzania and is more likely to have been influenced by political interests. |
| Keywords: | social protection, ideas, institutions, policy entrepreneurs, political settlements, Tanzania |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2016-142&r=age |
| By: | Giacomo Pasini (Department of Economics, University Of Venice Cà Foscari); Rob Alessie (University of Groningen Faculty of Economics and Business); Adriaan Kalwij (A.S.Kalwij@uu.nl; School of Economics Universiteit Utrecht) |
| Abstract: | This paper investigates the timing of wealth transfers between generations. We develop an overlapping generations model in which each generation can borrow against its future income but not against expected bequest. As a result, generations relatively poorer than their parents may end up not smoothing consumption. We prove that if wealth transfers can take place earlier in life, then each generation smooths consumption despite the constraint on borrowing and the first best solution is restored. The model implies that parents transfer resources when the children are credit constrained. This implication is tested using Dutch survey data on households' intentions to make intervivos transfers matched with administrative data that allow to construct a measure of the probability of being in need of a transfer. All in all, the paper highlights the importance of intervivos transfers as a device that households can resort to in order to mitigate inter-generational wealth inequalities. |
| Keywords: | intervivos transfers, credit constraints, overlapping generations |
| JEL: | D12 D13 D91 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2016:34&r=age |
| By: | Jarmila Botev; Jean-Marc Fournier; Annabelle Mourougane |
| Abstract: | To what extent can public deficits increase without putting fiscal sustainability at risk, given the specific current macroeconomic situation of protracted low growth and low interest rates, combined with relatively high government debt levels? The answer depends on many factors, such as the state of the economy, the fiscal track record and projections of population ageing and their effect on government spending. This paper makes use of three different approaches to better assess fiscal space, which can be defined in a broad manner as the extent to which public debt can increase. These approaches converge to a conclusion that there is fiscal space in most of the large advanced economies. There is also evidence that fiscal space may have risen in most OECD countries since 2014, mainly driven by the decrease in interest rates. Reforms to health and pension programmes would help to create additional fiscal space. Une ré-évaluation des marges de manoeuvre budgétaires dans les pays de l'OCDE Dans quelle mesure les déficits publics peuvent-ils augmenter sans compromettre la viabilité budgétaire? La situation macroéconomique actuelle, caractérisée par une faible croissance prolongée et de faibles taux d’intérêt, combinée à un niveau d’endettement public relativement élevé, justifie une réévaluation de cette question. Sa réponse dépend de nombreux facteurs, tels que l’état de l’économie, les antécédents budgétaires ou les projections du vieillissement de la population et leurs effets sur les dépenses gouvernementales. Ce document utilise trois approches différentes pour mieux évaluer les marges de manoeuvre budgétaires, qui peuvent être définie de manière large comme la mesure dans laquelle la dette publique peut augmenter. Ces approches convergent vers la conclusion qu’il existe des marges de manoeuvre budgétaires dans la plupart des grandes économies avancées. Il est également prouvé que l’espace budgétaire peut avoir augmenté dans la plupart des pays de l’OCDE depuis 2014, principalement sous l’effet de la baisse des taux d’intérêt. Les réformes des programmes de santé et de retraite aideraient à créer des marges de manoeuvre budgétaires supplémentaires. |
| Keywords: | fiscal space, fiscal sustainability, market access |
| JEL: | H3 C3 |
| Date: | 2016–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1352-en&r=age |
| By: | Michael McGann (School of Social and Political Sciences, University of Melbourne); Rachel Ong (Bankwest Curtin Economic Centre, Curtin University); Dina Bowman (Research and Policy Centre, Brotherhood of St Laurence); Alan Duncan (Bankwest Curtin Economic Centre, Curtin University); Helen Kimberley (Research and Policy Centre, Brotherhood of St Laurence); Simon Biggs (School of Social and Political Sciences, University of Melbourne) |
| Abstract: | This paper investigates how age and gender interact to shape older jobseekers’ experiences of age discrimination within a mixed methods framework. The analysis reveals that there has been a considerable decline in levels of perceived ageism among older men nationally relative to older women. These findings suggest that the nature of ageism experienced by older women is qualitatively different from men. Hence, policy responses to ageism need to be far more tailored in their approach because present, one-size-fits all, business case approaches rely on an overly narrow concept that obscures the gender and occupational dimensions of ageism. |
| Keywords: | Age discrimination, ageism, gender, older workers |
| JEL: | J01 J16 J71 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ozl:bcecwp:wp1601&r=age |
| By: | Alicia H. Munnell; Anek Belbase; Geoffrey T. Sanzenbacher |
| Abstract: | Very few workers save for retirement unless their employer offers them a retirement plan, typically a 401(k). But only about half of all private sector workers currently has access to such plans. In the absence of federal action to close this coverage gap, several states have stepped in. California, Connecticut, Illinois, Maryland, and Oregon have passed laws that will require employers without a plan to automatically enroll their workers in a state-sponsored program of Individual Retirement Accounts (“auto-IRAs”). These programs would be administered by private sector companies, with oversight by the state. States that have passed auto-IRA laws face a challenge: these programs must pay for themselves. Addressing this challenge is difficult because, in the beginning, program costs will rise more rapidly than revenues. Costs are driven by the number of accounts, and the programs are expected to enroll many participants in the initial years. In contrast, revenues are driven by assets under management, which are initially low as employee contributions and investment returns take time to accumulate. These facts suggest that, unless the fees charged to participants are set prohibitively high, it may be a number of years before state auto-IRAs “break even” and pay back any initial losses. This brief, which is based on a study for the state of Oregon’s Retirement Savings Plan, will: 1) examine what fees may be required to enable auto-IRA programs to be self-financing; and 2) identify the most important drivers of, and barriers to, financial self-sufficiency. The discussion proceeds as follows. The first section describes the costs of an auto-IRA program, including the start-up and ongoing administrative costs. The second section describes how program assets accumulate, resulting in higher revenue from fees. The third section discusses how costs and asset balances interact to dictate program finances, and how long it may take for auto-IRAs to break even as well as to pay back any initial losses. The final section concludes that auto-IRA programs can break even and pay back initial losses in about 9 years as long as: 1) initial fees are allowed to be higher in the short-run – around 100 basis points – before dropping down to their long-term equilibrium; 2) the default contribution rate is meaningful; and 3) per-account costs are relatively low. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2016-19&r=age |
| By: | SHIMASAWA Manabu; OGURO Kazumasa |
| Abstract: | We estimated the lifetime net burden ratio by explicitly considering the burden of inflation tax in order to quantitatively assess the impact of inflation or deflation on the intergenerational imbalances. As a result, the following points were elucidated: 1) The previous studies which do not take inflation tax revenue into consideration underestimate the burden of the currently living generations during an inflationary period and that of the future generations in a deflationary period; 2) Abenomics aiming to trigger a shift from deflation to inflation is desirable from the aspect of filling the intergenerational imbalances; and 3) Although the economic growth promotion measures will reduce the lifetime net burden ratio of all generations, such measures alone will not help to eliminate the intergenerational imbalances in Japan; a concurrent implementation of public finance and social security system reform is necessary. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:16100&r=age |
| By: | Kai-Uwe Müller; Michael Neumann |
| Abstract: | This paper provides evidence over a long time period on the question of who bears the burden of social security contributions (SSC) in Germany. Following Alvaredo et al. (2016) we exploit kinks in the budget set generated by a drop in the marginal SSC rate at earnings caps. Based on cross-sectional earnings distributions the framework does not rely on policy reforms. Applying the approach to administrative data for West Germany facilitates a comprehensive incidence analysis between 1975 and 2010. We find that neither employers nor employees shift a substantial part of their SSC burden. These results are consistent over the whole time period and in robustness checks corroborating previous findings. A small trend towards a slight increase in the SSC burden falling on employees is not statistically significant. |
| Keywords: | Incidence, social security contributions, discontinuities |
| JEL: | H22 J38 H55 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1627&r=age |