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on Economics of Ageing |
| By: | Pilar Garcia-Gomez (Erasmus University Rotterdam, the Netherlands); Titus J. Galama (University of Southern California, US); Eddy van Doorslaer (Erasmus University Rotterdam, the Netherlands); Angel Lopez-Nicolas (Universidad Politecnica de Cartagena, Spain) |
| Abstract: | We present a theory of the relation between health and retirement that generates testable predictions regarding the interaction of health, wealth and financial incentives in retirement decisions. The theory predicts (i) that wealthier individuals (compared to poorer individuals) are more likely to retire for health reasons(affordability proposition), and (ii) that health problems make older workers more responsive to financial incentives encouraging retirement (reinforcement proposition). We test these predictions using administrative data on older employees in the Dutch healthcare sector for whom we link adverse health events, proxied by unanticipated hospitalizations, to information on retirement decisions and actual incentives from administrative records of the pension funds. Exploiting unexpected health shocks and quasi-exogenous variation in nancial incentives for retirement due to reforms, we account for the endogeneity of health and financial incentives. Making use of the actual individual pension rights diminishes downward bias in estimates of the effect of pension incentives. We find support for our affordability and reinforcement propositions. Both propositions require the benefits function to be convex, as in our data. Our theory and empirical findings highlight the importance of assessing financial incentives for their potential reinforcement of health shocks and point to the possibility that differences in responses to financial incentives and health shocks across countries may relate to whether the benefit function is concave or convex. |
| Keywords: | pensions; health; retirement; disability; health investment; lifecycle model; health capital |
| JEL: | C33 D91 H55 I10 I12 J00 J24 J26 J45 D91 |
| Date: | 2017–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20170044&r=age |
| By: | Santiago Acosta Ormaechea; Marco A Espinosa-Vega; Diego Wachs |
| Abstract: | The paper develops a simple, integrated methodology to project public pension cash flows and healthcare spending over the long term. We illustrate its features by applying it to the LAC5 (Argentina, Brazil, Chile, Colombia and Mexico), where public spending pressures are expected to increase significantly over 2015-50 due to demographic trends and rising healthcare costs. We simulate alternative pension reforms, including the transition from a defined benefit to a defined contribution pension system and the fiscal burden of a minimum guaranteed pension under the latter. We also analyze public healthcare outlays in the LAC5, which is likewise expected to increase significantly over 2015-50 due to aging and the so-called excess cost growth factor of healthcare services, showing that curbing the evolution of the latter (e.g., through enhanced competition in the healthcare sector) could aid in containing spending pressures. Despite its simplicity, the methodology yields projections that compare well with other approaches. It therefore provides a good benchmark for assessing alternative reform scenarios, particularly in data-constrained countries. |
| Keywords: | Aging;Government expenditures and health;public pension spending, public healthcare spending, pension system reforms, Social Security and Public Pensions, Forecasts of Budgets, Deficits, and Debt |
| Date: | 2017–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:17/94&r=age |
| By: | Juan Carlos Conesa; Daniela Costa; Parisa Kamali; Timothy J. Kehoe; Vegard M. Nygard; Gajendran Raveendranathan; Akshar Saxena |
| Abstract: | This paper develops an overlapping generations model to study the macroeconomic effects of an unexpected elimination of Medicare. We find that a large share of the elderly respond by substituting Medicaid for Medicare. Consequently, the government saves only 46 cents for every dollar cut in Medicare spending. We argue that a comparison of steady states is insufficient to evaluate the welfare effects of the reform. In particular, we find lower ex-ante welfare gains from eliminating Medicare when we account for the costs of transition. Lastly, we find that a majority of the current population benefits from the reform but that aggregate welfare, measured as the dollar value of the sum of wealth equivalent variations, is higher with Medicare. |
| JEL: | E21 E62 H51 I13 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23389&r=age |
| By: | Koichi Fukumura (JSPS Research Fellow, Graduate School of Economics, Osaka University); Kohei Nagamachi (　 Graduate School of Management, Kagawa University); Yasuhiro Sato (Faculty of Economics, The University of Tokyo); Kazuhiro Yamamoto (　 Graduate School of Economics, Osaka University) |
| Abstract: | This paper constructs an overlapping generations model wherein people decide their number of children and levels of consumption for differentiated goods. We further assume that immigration takes place according to the utility difference between inside and outside a country. We show that an improvement in longevity has three effects on the market size and welfare: First, it decreases the number of children. Second, it increases the per capita expenditure on consumption. Finally, it increases immigration. The first effect has negative impacts on the market size and welfare whereas the latter two effects have positive impacts. We then calibrate our model to match Japanese and U.S. data from 1955 to 2014 and find that the negative effects dominate the positive ones. Moreover, our counterfactual analyses show that accepting immigration in Japan can be useful in overcoming population and market shrinkage caused by an aging population. |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2016cf1048&r=age |
| By: | Rosemary Borck; Robert Schmitz; Pamela Doty; John Drabek |
| Abstract: | This study is a follow-up to earlier research conducted with 2006 and 2009 Medicaid (Medicaid Analytic eXtract [MAX]) data on interstate variations on the extent of the “rebalancing†of Medicaid long-term services and supports (LTSS) from nursing home care toward greater reliance on home and community-based services (HCBS). |
| Keywords: | Nursing home care, Medicaid enrollees, transition rates |
| JEL: | I J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:d30fa020a06348118bbc91f8428043aa&r=age |
| By: | Jonathan J Adams (Department of Economics, University of Florida) |
| Abstract: | Advanced economies undergo three transitions during their development: 1. They transition from a rural to an urban economy. 2. They transition from low income growth to high income growth. 3. Their demographics transition from initially high fertility and mortality rates to low modern levels. The timings of these transitions are correlated in the historical development of most advanced economies. I unify complementary theories of the transitions into a nonlinear model of endogenous long run economic and demographic change. The model reproduces the timing and magnitude of the transitions. Because the model captures the interactions between all three transitions, it is able to explain three additional empirical patterns: a declining urban-rural wage gap, a declining rural-urban family size ratio, and most surprisingly, that early urbanization slows development. This third prediction distinguishes the model from other theories of long-run growth, so I test and confirm it in cross-country data. |
| JEL: | E13 J11 N10 O18 O41 |
| URL: | http://d.repec.org/n?u=RePEc:ufl:wpaper:001001&r=age |
| By: | Delpierre, Matthieu (IWEPS, Belgium); Dupuy, Arnaud (University of Luxembourg); Tenikue, Michel (LISER (CEPS/INSTEAD)); Verheyden, Bertrand (LISER (CEPS/INSTEAD)) |
| Abstract: | This paper analyzes the impact of anticipated old age support, provided by children to parents, on intra-family transfers and education. We highlight an education motive for remittances, according to which migrants have an incentive to invest in their siblings' education via transfers to parents, in order to better share the burden of old age support. Our theory shows that in rich families, selfish parents invest optimally in children education, while in poor families, liquidity constraints are binding and education is fostered by migrant remittances. We test these hypotheses on Indian panel data. Identification is based on within variation in household composition. We find that remittances received from migrants significantly increase with the number of school age children in the household. Retrieving the effects of household characteristics shows that more remittances tend to be sent to poorer and older household heads, confirming the old age support hypothesis. |
| Keywords: | migration, remittances, education, old age support |
| JEL: | D13 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10772&r=age |
| By: | Shulgin, Sergey (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Scherbov, Sergey (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Zinkina, Yulia (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Novikov, Kirill (Russian Presidential Academy of National Economy and Public Administration (RANEPA)) |
| Abstract: | In this paper, the relationship between the health status of people and the level of education is investigated. The main objective of the study is to analyze how the state of health depends on the level of education. The work evaluates the age functions of various medical and demographic factors, as well as their dependence on the level of education. Estimates of several models of the expected life expectancy (HALE) for Russia are made and an assessment of the survival tables for Russian men and women with different levels of education is done. |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:041719&r=age |
| By: | Quentin Guibert (SAF - Laboratoire de Sciences Actuarielle et Financière - UCBL - Université Claude Bernard Lyon 1); Frédéric Planchet (SAF - Laboratoire de Sciences Actuarielle et Financière - UCBL - Université Claude Bernard Lyon 1) |
| Abstract: | Data quality is an overarching concern when it comes to building a mortality model or prospective mortality tables. This is even more significant when these procedures are based on a small population, as data may show major random fluctuations due to a lack of information for particular ages. Such situations arise frequently with the entry into force of Solvency II as insurers shall consider their own data sets, limited in size, to build best estimate tables. Since parametric methods are too rough to capture a realistic mortality pattern in two dimensions, the mortality profile is quite often adjusted using exogenous information, such as a table based on a national population. In light of this, the aim of this paper is to discuss the problem of choosing appropriate estimators for two-dimensional mortality rates or death rates in the presence of independent censoring. Indeed, practitioners currently use the Hoem estimator or the Kaplan-Meier estimator split by generation without questioning their relevance and reliability. We propose in this paper a comparative analysis of these estimators and try to give some criteria to choose one approach over another, and give some figures based on a real insurance portfolio and simulated data. Finally, we provided some non-parametric estimators for a direct estimation of death rates both with the cohort and the period approaches |
| Date: | 2017–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01509483&r=age |
| By: | Leonello Tronti; Andrea Spizzichino |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:ast:wpaper:0025&r=age |