nep-age New Economics Papers
on Economics of Ageing
Issue of 2017‒06‒18
nine papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. The Causal Effect of Retirement on Health Services Utilization: Evidence from Urban Vietnam By Dang, Thang
  2. The Heterogeneous Impact of Pension Income on Elderly Living Arrangements: Evidence from China’s New Rural Pension Scheme By Cheng, Lingguo; Liu, Hong; Zhang, Ye; Zhao, Zhong
  3. Social Security and Saving: An Update By Sita Slavov; Devon Gorry; Aspen Gorry; Frank N. Caliendo
  4. Planning for Retirement? The Importance of Time Preferences By Robert L. Clark; Robert G. Hammond; Christelle Khalaf; Melinda Sandler Morrill
  5. Healthy life expectancy, mortality, and the age prevalence of morbidity By Timothy Riffe; Alyson A. van Raalte; Maarten J. Bijlsma
  6. No free lunch, Buddy: past housing transfers and informal care later in life By Emanuele Ciani; Claudio Deiana
  7. Austerity, health care provision, and health outcomes in Spain By Borra, Cristina; Pons-Pons, Jeronia; Vilar-Rodriguez, Margarita
  8. How Inheritance Affects the Real Estate Market in an Aging Economy: Evidence from Transaction and Registry Data By Mizuta, Takeshi; Shimizu, Chihiro; Uesugi, Iichiro
  9. Genes, Education, and Labor Market Outcomes: Evidence from the Health and Retirement Study By Nicholas W. Papageorge; Kevin Thom

  1. By: Dang, Thang
    Abstract: Access to medical services is significantly essential for retaining and improving health status for aging population. Whilst retired individuals tend to have more time for the use of health services, there is only inadequate evidence evaluating the causal effect of retirement on health services utilization. To fulfill this gap in the literature especially from developing countries, this paper estimates the causal effect of retirement on the probability and the frequency of doctor visits at public health facilities in urban Vietnam. Employing authorized retirement ages for both men and women in Vietnam as instruments for the probability to be retired, the paper shows that retirement significantly increases some outcomes of outpatient health services for both male and female. In particular, the baseline 2SLS estimates indicate that men who are retired are more likely to have any outpatient medical visit than those who are not retired by about 36.1%. Meanwhile, retirement rises both the likelihood and the frequency of outpatient visits for female by roughly 31% and 1.75 times respectively. However, this paper finds statistically insignificant impacts of retirement on utilization outcomes for inpatient services.
    Keywords: Retirement; Health services utilization; Developing countries
    JEL: C26 I10 J26
    Date: 2017–06–13
  2. By: Cheng, Lingguo; Liu, Hong; Zhang, Ye; Zhao, Zhong
    Abstract: This paper investigates the impact of pension income on living arrangements of the elderly. Taking advantage of a unique opportunity due to the recent establishment and expansion of the New Rural Pension Scheme in China, we explicitly address the endogeneity of pension status and pension income through a fixed-effect model with instrumental variable approach by exploiting exogenous time variation in the program implementation at county level. We find an overall positive effect of pension income on independent living as well as considerable heterogeneity. The positive income effects of the NRPS are concentrated among the elderly with adult children living nearby, of higher socio-economic status, and with better health at baseline; for other groups, the effects are insignificant. We also find that more generous programs exhibit larger effects. Our results highlight that living arrangement is multidimensional in rural China.
    Keywords: pension income,living arrangements,heterogeneity,China
    JEL: J12 H55 I38
    Date: 2017
  3. By: Sita Slavov; Devon Gorry; Aspen Gorry; Frank N. Caliendo
    Abstract: Typical neoclassical life-cycle models predict that Social Security has a large and negative effect on private savings. We review this theoretical literature by constructing a model where individuals face uninsurable longevity risk and differ by wage earnings, while Social Security provides benefits as a life annuity with higher replacement rates for the poor. We use the model to generate numerical examples that confirm the standard result. Using several benefit and tax changes from the 1970s and 1980s as natural experiments, we investigate the empirical relationship between Social Security and private savings and find little to support the strong predictions from the theoretical model. We explore possible reasons for the divergence between theoretical predictions and empirical findings.
    JEL: D14 H31 H55
    Date: 2017–06
  4. By: Robert L. Clark; Robert G. Hammond; Christelle Khalaf; Melinda Sandler Morrill
    Abstract: Ensuring retirement income security is a priority for individuals, employers, and policymakers. Using merged administrative and survey data for public sector workers in North Carolina, we explore how workers’ characteristics and preferences are associated with planning and saving for retirement. We then assess the “quality” of a retirement plan and whether retirement behavior is consistent with these plans. The findings indicate that the way that individuals discount future consumption is associated with the extent of their retirement planning and preparedness. We find that individuals who engage in retirement planning are better prepared to meet their retirement goals upon leaving their career jobs.
    JEL: J32
    Date: 2017–06
  5. By: Timothy Riffe (Max Planck Institute for Demographic Research, Rostock, Germany); Alyson A. van Raalte (Max Planck Institute for Demographic Research, Rostock, Germany); Maarten J. Bijlsma (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: -
    JEL: J1 Z0
    Date: 2017–05
  6. By: Emanuele Ciani (Bank of Italy); Claudio Deiana (European Commission, Joint Research Centre)
    Abstract: Previous empirical literature on the relationship between intergenerational transfers of assets and services has mostly focused on contemporary exchanges. In contrast, we provide novel evidence that parents who helped their adult children in the past are rewarded by a greater likelihood of receiving informal care later in life. To this end we use Italian data to look at retrospective information about how parents help their children to purchase houses when they get married. Our estimates show a positive association with the current provision of informal care, which is robust to controlling for a large set of individual and family characteristics. We provide evidence that this can be explained by various self-interest motives, relating to theories based either on bilateral exchange or on the presence of a third generation of grandchildren, such as those including a demonstration effect or the concept of a family constitution.
    Keywords: informal care, housing, intergenerational transfers, geographical proximity.
    JEL: D10 J13 J14
    Date: 2017–06
  7. By: Borra, Cristina; Pons-Pons, Jeronia; Vilar-Rodriguez, Margarita
    Abstract: The recession that started in the United States in December 2007 has had a significant impact on the Spanish economy through a large increase in the unemployment rate and a long recession which led to tough austerity measures imposed on public finances. Taking advantage of this quasi-natural experiment, we use data from the Spanish Ministry of Health from 1997 to 2014 to provide novel causal evidence on the short-term impact of health care provision on health outcomes. The fact that regional governments have discretionary powers in deciding health care budgets and that austerity measures have not been implemented uniformly across Spain helps isolate the impact of these policy changes on health indicators of the Spanish population. Using Ruhm’s (2000) fixed effects model, we find that staff or hospital bed reductions account for a significant increase in mortality rates from cardiovascular disease and external causes, for 25-34 and 65-74 year-old groups, and in the late foetal mortality rate. Mortality rates, however, do not seem to be robustly affected by the 2012 changes in retirees’ pharmaceutical co-payments. Contrary to expectations, we find some evidence of reduced mortality rates for cancer and female cancer as a result of the 2012 changes in migrants’ access restrictions to the Spanish NHS. Overall, our analyses suggest that short-term impacts of decreases in health care provision on mortality are significant but small. However, impacts prove to be economically and quantitatively significant in the case of fatalities due to external causes, especially accidental deaths.
    Keywords: Health care provision; Mortality; Health cuts
    JEL: I10 I18
    Date: 2017–06–16
  8. By: Mizuta, Takeshi; Shimizu, Chihiro; Uesugi, Iichiro
    Abstract: The impact of population aging on real estate prices has been closely scrutinized by Mankiw and Weil (1989) and others. This paper sheds new light on the literature on asset meltdown by examining the mechanism how the death of property owners and subsequent inheritances affect the realty market. By combining the unpredictable nature of death and inheritance and the unique characteristics of the Japanese tax system, which provides an incentive to heirs to sell inherited properties shortly after inheriting them, we use the incidence of inheritance to instrument for the supply of real estate and examine the causal relationship between supply and realty prices to find the following. First, a higher incidence of inheritance results in a larger number of properties for sale. Second, a larger number of properties for sale as a result of inheritances decreases transaction prices in the real estate market. And third, there exists a substantial difference in the demand elasticity of real estate property depending on whether land use regulations were relaxed or tightened.
    Keywords: Real estate market, Realty prices, Inheritance tax, Instruments
    JEL: R31 R38 H24
    Date: 2016–09
  9. By: Nicholas W. Papageorge (Johns Hopkins University); Kevin Thom (New York University)
    Abstract: Recent advances have led to the discovery of specific genetic variants that predict educational attainment. We study how these variants, summarized as a genetic score variable, are associated with human capital accumulation and labor market outcomes in the Health and Retirement Study (HRS). We demonstrate that the same genetic score that predicts education is also associated with higher wages, but only among individuals with a college education. Moreover, the genetic gradient in wages has grown in more recent birth cohorts, consistent with interactions between technological change and labor market ability. We also show that individuals who grew up in economically disadvantaged households are less likely to go to college when compared to individuals with the same genetic score, but from higher socioeconomic status households. Our findings provide support for the idea that childhood socioeconomic status is an important moderator of the economic returns to genetic endowments. Moreover, the finding that childhood poverty limits the educational attainment of high-ability individuals suggests the existence of unrealized human potential.
    Keywords: Human capital, inequality, education, genes
    JEL: I24 J24
    Date: 2017–05

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