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on Economics of Ageing |
| By: | C. Adam Bee; Joshua Mitchell |
| Abstract: | Despite women’s increased labor force attachment over the lifecycle, household surveys such as the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) do not show increases in retirement income (pensions, 401(k)s, IRAs) for women at older ages. We use linked survey-administrative data to demonstrate that retirement incomes are considerably underreported in the CPS ASEC and that women’s economic progress at older ages has been substantially understated over the last quarter century. Specifically, the CPS ASEC shows median household income for women age 65-69 rose 21 percent since the late 1980s, while the administrative records show an increase of 58 percent. Survey biases in women’s own incomes appear largest for women with the longest work histories. We also exploit the panel dimension of our data to follow a cohort of women and their spouses (if present) as they transition into retirement in recent years. In contrast to previous work, we find that most women do not experience noticeable drops in income up to five years after claiming social security, with retirement income playing an important role in maintaining their overall standard of living. Our results pose a challenge to the literature on the “retirement consumption puzzle” and suggest total income replacement rates are high for recent retirees. |
| JEL: | D14 D91 H55 J14 J26 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22970&r=age |
| By: | Neumann, Uwe |
| Abstract: | In countries with an ageing population, regional migration may accentuate local progress in demographic change. This paper investigates whether and to what extent diversity in ageing among urban neighbourhoods in Germany was reinforced by regional migration during the past two decades. The old-industrialised Ruhr in North Rhine- Westphalia serves as a case study representing an advanced regional stage in ageing. The analysis proceeds in two steps. First, variation in the pace of neighbourhood-level demographic change over the period 1998-2008 is examined using KOSTAT, an annual time series compiled by municipal statistical offices. Second, a discrete choice model of household location preferences is applied to study the underlying demographic sorting process. The second step draws on microdata from a representative population survey carried out in 2010. During the 1990s and 2000s, in contrast to earlier decades, age differentials in location preferences became more profound and city centres became more popular as residential location. Rapid "ageing by feet" now affects neighbourhoods, where the influx is low, particularly low-density housing areas of the outer urban zone. Neighbourhood-level demographic sorting proceeds at a somewhat slower pace in the Ruhr than in the more prosperous cities of the nearby Rhineland (Bonn, Cologne and Dusseldorf). In the process of regional adaptation to demographic change, greater diversity in the age structure of neighbourhood populations may turn out to be an advantage in the long-run competition over mobile households. |
| Keywords: | ageing,segregation,neighbourhood sorting,discrete choice |
| JEL: | C21 C25 O18 R23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:665&r=age |
| By: | Metzger, Christoph |
| Abstract: | We present a framework for accounting of the German statutory pension scheme and estimate a balance sheet for the years 2005 until 2012. Extending and applying the methodology proposed by Settergren and Mikula (2005), we estimate the cross-sectional internal rates of return of the German pension scheme over this period. We are able to show that the cross-sectional internal rate of return is mainly financed by increasing contributions and by changing the liabilities not backed by assets. Additionally, our results reveal that from an expenditure perspective, the major part of the internal rate of return is resulting from changing longevity rather than indexation of pension entitlements. Finally, we prove that from a cross-sectional perspective the implicit tax of a pension scheme can mainly be interpreted as an “implicit wealth tax” on pension wealth and subsequently present empirical estimates for these cross-sectional implicit tax rates. |
| Keywords: | accounting of pension schemes,balance sheet,internal rate of return,implicit tax,fiscal sustainability |
| JEL: | E01 H55 H83 H87 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fzgdps:63&r=age |
| By: | Teresa Ghilarducci; Siavash Radpour; Bridget Fisher; Anthony Webb (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | Economic shocks, such as job-loss, have a particularly adverse effect on the retirement savings of workers in low-income households, exacerbating retirement savings inequality. Low income households are more likely than moderate- and upper-income households to experience economic shocks. Workers in low-income households are also more likely to withdraw from their retirement account after a shock. This study shows that these shocks have significant effects on the finances of low-income households, causing up to a third of all withdrawals, and possibly more. |
| Keywords: | Retirement, 401(k), GRA, Social Security |
| JEL: | H55 J26 J32 D63 E21 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepapn:2016-01&r=age |
| By: | Teresa Ghilarducci; Siavash Radpour; Bridget Fisher; Anthony Webb (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | Financial necessity is an important reason low-wage households are more likely to make pre-retirement withdrawals from their 401(k) plans. However, an increase in the tax penalty on early withdrawals may increase rather than discourage withdrawals, and a prohibition on withdrawals may decrease contributions. To ensure that all households both contribute to retirement plans and remain invested, retirement policy should both mandate contributions and prohibit pre-retirement withdrawals. Finally, if households are prohibited from using retirement savings to buffer pre-retirement shocks, policy interventions will be required to increase the financial resilience of working-age households. |
| Keywords: | Retirement, 401(k), GRA, Social Security |
| JEL: | H55 J26 J32 D63 E21 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepapn:2016-03&r=age |
| By: | Margherita Borella (University of Torino, CeRP-Collegio Carlo Alberto and Netspar); Michele Belloni (University Ca’ Foscari of Venezia and CeRP-CeRP-Collegio Carlo Alberto) |
| Abstract: | Using a rich micro dataset drawn from administrative archives, we explore whether Social Security Wealth (SSW) is an important factor affecting the decision to become self-employed. We focus on the two main categories of self-employed professions covered by the Italian public pension system: craftsmen and shopkeepers. We use the large exogenous variation in individual expected SSW that occurred as a result of the policy reform process undertaken in Italy during the 1990s to identify the effect of this variable and we study how the probability of being self-employed or employed depends, amongst other things, on the difference in the expected SSW that accrues under the two alternative employment scenarios. Our key finding is that a higher difference in expected SSW from self-employment compared to employment has a positive effect on the probability of being self-employed and on the probability of switching to self-employment, while it has a negative effect on the probability of switching from self-employment to employment. We also study how these effects vary with age and, in general, we find that the effect is, in absolute terms, stronger at younger and older ages. |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:159&r=age |
| By: | Teresa Ghilarducci; Siavash Radpour; Bridget Fisher; Anthony Webb (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | The first birth cohort exposed to the 401(k) system for most of their working lives is now approaching retirement. 401(k) participants in this cohort have accumulated only about a third of the savings they need to maintain their standard of living in retirement. The 401(k) system fails even those who use it as instructed. High earners are as ill-prepared for retirement as low-and moderate earners. Inadequate wealth accumulations reflect well-known design flaws in the 401(k) system – patchy coverage, high fees, opportunities to take pre-retirement withdrawals, and the lack of a default pathway for converting accumulated wealth into retirement income. |
| Keywords: | Retirement, 401(k), GRA, Social Security |
| JEL: | H55 J26 J32 D63 E21 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepapn:2016-02&r=age |
| By: | Teresa Ghilarducci; Hamilton James (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | The plan proposes a simple, immediately effective solution to address the fundamental flaws in today’s broken retirement system. It details a single, sustainable framework - Guaranteed Retirement Accounts (GRAs) - to allow Americans to save consistently, generate the returns necessary, and retire with guaranteed lifelong income. And by repurposing lopsided subsidies and strategically using existing government infrastructure, this plan can be implemented with no new taxes, bureaucracy or increase of the federal deficit. |
| Keywords: | Retirement, GRA, Savings |
| JEL: | B50 J26 J32 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepapb:2016-01&r=age |
| By: | Fengping Tian; Jiti Gao; Ke Yang |
| Abstract: | This article investigates the variation in the effects of various determinants on the per capita health care expenditure. A total of 28 OECD countries are studied over the period 1990-2012, employing an instrumental variable quantile regression method for a dynamic panel model with fixed effects. The results show that the determinants of per capita health care expenditure do vary with the distribution of the health care expenditure growth, while the change patterns are dissimilar. Specifically, the lagged health spending growth has a significantly positive effect, with an effect that decreases towards the higher quantiles of growth of per capita health care expenditure. Per capita GDP has a significantly positive effect, both the short and long run income elasticities are smaller than one, and health care is a necessity. The density of physicians only has a significant negative effect at the lower tail of the distribution. The elderly population has the reverse effect at the lower and upper tails, and this shows an upward trend with the increase in health expenditure growth. Life expectancy has an effect similar to the proportion of the old. Variable representing Baumol’s model of “unbalanced growth†theory has a significantly positive effect, and the change pattern of its influence shows a marked upward trend. However, one component of “Baumol variable†, labor productivity, only shows significant effect in the low half of the distribution. More attention needs to be paid to the influence of determinants in health expenditure study. |
| Keywords: | health care expenditure, quantile regression, OECD countries, unbalanced growth |
| JEL: | C22 C23 I11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:msh:ebswps:2016-20&r=age |
| By: | Mojgan Chapariha |
| Abstract: | The population of older people living in urban areas is increasing rapidly, so investigating on the well-being of this important group in urban area is critical. There are many studies that claim green public spaces are very important on human well-being and especially elderly’s’ well-being (Sugiyama & Ward Thompson 2008; Maas et al. 2006). In SDGs, one of the targets is dedicated to green public spaces, but it does not determine the implementation of them. This research will help to facilitate implementing green public spaces in cities through introducing indicators for monitoring SDGs. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cav:cavwpp:wp147&r=age |
| By: | Teresa Ghilarducci; Bridget Fisher; Alex Pavlakis; Siavash Radpour; Anthony Webb (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | Workers across the country face a retirement crisis. However, workers in Philadelphia are faring worse than average. First, workers in Philadelphia are less likely than workers nationally to have access to an employersponsored retirement account. Second, the retirement plan participation rate among workers with access to a plan at work is lower than the national average. The report was prepared on behalf of the City Council of Philadelphia. |
| Keywords: | Retirement, GRA, Savings, Retirement |
| JEL: | J26 J32 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepapb:2016-02&r=age |
| By: | Vincent Vandeberghe (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | The aim of this paper is to develop and implement an analytical framework assessing whether better-quality inputs, via a rise of TFP, could compensate an ageing-induced slowing of economic growth. Here "better-quality" means more educated and older/more experienced workforces; and also better-quality capital proxied by its ICT content. Economic theory predicts that these trends should raise TFP. To assess these predictions, we use EU-KLEMS data, with information on the age/education mix of the workforce, as well as the importance on ICT in total capital, for 34 industries within 16 OECD countries, between 1970 and 2005. We generalise the Hellerstein-Neumark labour-quality index method to simulateneously capture workers’ age/experience or education contribution to TFP growth, alonside that of ICT. The conclusion of the paper is that the quality of inputs matters for TFP. We find robust microeconometric evidence that better-educated and older/more experienced workers are more productive than their less-educated and younger/less-experienced peers. Also, ICT capital turns out to be more productive than other forms of capital. And when used in a growth accounting exercise covering the 1995-2005 period, these estimates suggest that up to 40% of the recorded TFP growth could be ascribed to the rising quality of inputs. |
| Keywords: | TFP growth, Ageing, Input quality, ICT |
| JEL: | J11 J24 D24 O30 |
| Date: | 2016–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2016030&r=age |
| By: | Alan L. Gustman; Thomas L. Steinmeier; Nahid Tabatabai |
| Abstract: | This paper uses data from the Health and Retirement Study to estimate a structural model of household retirement and saving. It applies that model to analyze the effects of the Great Recession on the work and retirement of older couples who were both employed full-time at the beginning of the recession. We analyze the effects of job loss, changes in wealth and changes in expectations. The largest overall effects of the Great Recession are observed for 2009 and 2010. In 2009, an additional 2.5 percent of all 55 to 59 year old husbands were not working full-time as result of the Great Recession, amounting to a reduction of 3.2 percent in full-time work. In 2010, 2.8 percent of 55 to 59 year old husbands were not working full-time as a result of the Great Recession, amounting to a 3.8 percent reduction in full-time work. For wives the reductions in full-time work due to the Great Recession were 1.7 percent and 2.2 percent of those who initially held a job, or reductions of full-time work of 2.3 and 3.0 percent respectively. For those 60 to 64, the reductions were 1.2 percent of men and 0.9 percent of women. Having been laid off in the last three years reduces full-time work by 30 percent. There also are lingering effects of layoff on the probability of working longer. Having been laid off three or more years in the past reduces full-time employment in the current year by about 12 percent. This reflects the reduced work incentives for full-time work arising from lower earnings due to the loss of job tenure with a layoff as well as the additional earnings penalty from a layoff. The effect on own work of a spouse having been laid off is much smaller. The reason is that, as found in the estimation of our structural model, having one spouse not working increases the value of leisure for the other. In contrast, when one member of the household loses their job, the value of consumption increases relative to leisure. For recent layoffs, these effects are roughly offsetting. All told, the effects of the Great Recession on retirement seem relatively modest. These findings are consistent with our earlier descriptive analyses. |
| JEL: | C61 D31 D91 E21 E24 E32 H55 I3 J11 J14 J16 J32 J63 J64 J82 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22984&r=age |
| By: | Kuhn, Michael; Prettner, Klaus |
| Abstract: | We show that the long-run economic growth effect of an increase in the retirement age is unambiguously positive in research and development based endogenous growth models. This contrasts recent findings based on models of learning-by-doing-spillovers, in which an increase in the retirement age reduces physical capital accumulation and thereby economic growth. Our results imply that models based on learning-by-doing-spillovers, which are often used as a short-cut formulation for research and development based growth models, do not necessarily lead to similar policy conclusions. |
| Keywords: | demographic change,pension reform,long-run economic growth,R&D-based growth |
| JEL: | J10 J26 O30 O41 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuweco:102016&r=age |
| By: | Haizheng Li; Junzi He; Qinyi Liu; Barbara M. Fraumeni; Xiang Zheng |
| Abstract: | Given the challenges in quantifying the role of human capital on economic development, measuring human capital itself becomes an important issue. It is desirable to have a comprehensive human capital measure that goes beyond the traditional measures based on education attainment, yet is relatively simple to obtain. In this study, we apply the Jorgenson-Fraumeni human capital measurement framework and modify it to estimate provincial level human capital in China. We produce a provincial level panel dataset from 1985 to 2014 that is ready to use, with various J-F based and traditional human capital measures. We then combine the provinces into four different regions that are at different stages of economic development and discuss the regional pattern and trend of human capital, as well as their correlation with other economic indicators such as GDP and physical capital. Moreover, we conduct a Divisia decomposition analysis to investigate the contribution of different factors, such as education, urbanization, population aging and gender composition, to the quantity and quality growth of human capital in each region. |
| JEL: | I25 O15 O18 O53 R12 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22906&r=age |
| By: | Ivo Bischoff (University of Kassel); Nataliya Kusa (University of Kassel) |
| Abstract: | This paper deals with the public acceptance of policies that pave the way for a more active role of family care assistants in long-term care provision. Family care assistants, i.e. non-relatives providing homecare services in the own private home of the care recipient, provide valuable help for adult children organizing long-term care for their parents. However, their support comes at the price of transferring more family-owned wealth to non-relatives. Based on a survey among German citizens, we provide empirical evidence on the factors that drive the support for a more active role of family care assistants. We find support to be higher among subjects who gave long-term care personally. Monetary self-interest is found to matter. In addition, we find evidence of a clear line of conflict: Citizens with alive parents are more likely to support a more active role of family care assistants than citizens whose parents are dead. |
| Keywords: | long-term care, intergenerational transfers, citizens’ preferences, inheritance taxation, filial responsibility |
| JEL: | H27 D31 D72 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201642&r=age |
| By: | Claudia Goldin; Joshua Mitchell |
| Abstract: | A new lifecycle of women’s employment emerged with cohorts born in the 1950s. For prior cohorts, lifecycle employment had a hump shape; it increased from the twenties to the forties, hit a peak and then declined starting in the fifties. The new lifecycle of employment is initially high and flat, there is a dip in the middle and a phasing out that is more prolonged than for previous cohorts. The hump is gone, the middle is a bit sagging and the top has greatly expanded. We explore the increase in cumulative work experience for women from the 1930s to the 1970s birth cohorts using the SIPP and the HRS. We investigate the changing labor force impact of a birth event across cohorts and by education and also the impact of taking leave or quitting. We find greatly increased labor force experience across cohorts, far less time out after a birth and greater labor force recovery for those who take paid or unpaid leave. Increased employment of women in their older ages is related to more continuous work experience across the lifecycle. |
| JEL: | J16 J21 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22913&r=age |