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on Economics of Ageing |
| By: | Krzysztof Makarski (Group for Research in Applied Economics (GRAPE); Warsaw School of Economics; Narodowy Bank Polski); Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw) |
| Abstract: | We develop an OLG model with realistic assumptions about longevity to analyze the welfare effects of raising the retirement age. We look at a scenario where an economy has a pay-as-you-go defined benefit scheme and compare it to a scenario with defined contribution schemes (funded or notional). We show that initially in both types of pension system schemes majority of the welfare effects come from adjustment in taxes and/or prices. After the transition period, welfare effects are predominantly generated by the preference for smoothing inherent in many widely used models. We also show that although incentives differ between defined benefit and defined contribution systems, the welfare effects are of comparable magnitude under both schemes. We provide an explanation for this counter-intuitive result. |
| Keywords: | longevity, PAYG, retirement age, pension system reform, welfare |
| JEL: | C68 E21 J11 H55 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:fme:wpaper:10&r=age |
| By: | Oliwia Komada (Group for Research in Applied Economics (GRAPE)); Krzysztof Makarski (Group for Research in Applied Economics (GRAPE); Warsaw School of Economics; Narodowy Bank Polski); Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw) |
| Abstract: | Most reforms of the pension systems imply substantial redistributions between cohorts and within cohort. Fiscal policy, which accompanies these changes may counteract or reinforce this redistribution. Moreover, the literature has argued that the insurance motive implicit in some pension systems plays a major role in determining the welfare effects of the reform: reforms otherwise improving welfare become detrimental to welfare once insurance motive is internalized. We show that this result is not universal, i.e. there exists a variety of fiscal closures which yield welfare gains and political support for a pension system reform. In an OLG model with uncertainty we analyze two sets of fiscal adjustments: fiscally neutral adjustments in the pension system (via contribution rate or replacement rate) and balancing pension system by a combination of taxes and/or public debt. We find that fiscally neutral pension system reforms are more likely to yield welfare gains. Many adjustments obtain sufficient political support despite yielding aggregate welfare losses and vice versa. Furthermore, we point to fiscal closures which attenuate and reinforce the relevance of the insurance motive in determining the welfare effects. |
| Keywords: | pension system reform, fiscal policy, welfare effects |
| JEL: | C68 D72 E62 H55 J26 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:fme:wpaper:11&r=age |
| By: | Shanthi Ramnath; John B. Shoven; Sita Nataraj Slavov |
| Abstract: | We examine the role of self-employment in retirement transitions using a panel of administrative tax data. We find that the hazard of self-employment increases at popular retirement ages associated with Social Security eligibility, particularly for those with greater retirement wealth. Late-career transitions to self-employment are associated with a larger drop in income than similar mid-career transitions. Data from the Health and Retirement Study suggest that hours worked also fall upon switching to self-employment. These results suggest that self-employment at older ages may serve as a “bridge job,” allowing workers to gradually reduce hours and earnings along the pathway to retirement. |
| JEL: | H55 J26 J29 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23551&r=age |
| By: | Ardito, Chiara (University of Turin) |
| Abstract: | This paper investigates the impact of the 1992 Italian Pension Reform tightening minimum pension age for men on several labour market outcomes. In particular, both its intended (on retirement and employment) and unintended effects (on other components of social welfare) are considered. The empirical analysis is based on a large administrative database and it exploits the quasi-natural experiment offered by the gradual phase in of the reform. Results show that the reduced pension benefit claiming induced by the reform did not lead to a one-to-one increase in employment, inasmuch we find evidence of social support substitution. Workers facing stricter eligibility conditions demanded more disability and unemployment benefits and yet, the probability of inactivity increased the most. Sensitivity checks show that the results are very robust and that they are not driven by an extension of the receipt time of people already receiving alternative welfare benefits before the reform. The size of the effects vary across socioeconomic groups and individuals with poorer health, in manual occupations and with lower earnings resulted the most constrained by the new pension rules, experiencing the highest increase in employment and substitution between retirement and other social. security programs. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201722&r=age |
| By: | Ashwinin Hegde; Kashianth Metri; Promila Chwadhary; Natesh Babu; H R Nagendra |
| Abstract: | There is a high prevalence of chronic health problems in elderly persons which significantly affects their mental health, sleep quality and quality of life (QoL). Practice of yoga known to enhance physical and mental health. Present pilot study intended to evaluate the effects of Integrated Yoga (IY) practice on sleep quality, mental health and QoL of elderly individuals suffering from chronic health condition(s). Twenty-eight elderly persons residents of Bangalore, India (13 males) within the age range 65-80 years (with group mean±SD; 68.8±5.4 yrs) having chronic health problem(s) underwent 1 month of IY, 60 minutes/day for 6 days/week. We excluded the subjects if they; had compromised cardiac functioning; were on sleep medication; underwent abdominal surgery; were on anti-psychotic medications; had exposure to any form of yoga in past one year. All the subjects were assessed for cardiac variables, mental health parameters, sleep quality and quality of life at baseline after one month. It was observed a significant decrease in pulse rate (p |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:vor:issues:2017-06-07&r=age |
| By: | Guglielmo D'Amico; Montserrat Guillen; Raimondo Manca; Filippo Petroni |
| Abstract: | In this paper we propose a multi-state model for the evaluation of the conversion option contract. The multi-state model is based on age-indexed semi-Markov chains that are able to reproduce many important aspects that influence the valuation of the option such as the duration problem, the time non-homogeneity and the ageing effect. The value of the conversion option is evaluated after the formal description of this contract. |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1707.01028&r=age |
| By: | Carmen Herrero Blanco (Instituto Valenciano de Investigaciones Económicas - Ivie); Ricardo Martínez (Brown University); Antonio Villar Notario (Instituto Valenciano de Investigaciones Económicas - Ivie) |
| Abstract: | This paper provides an alternative way of measuring human development that takes explicitly into account the differences in the countries' population structures. The interest of this proposal stems from two complementary elements. First, that there is an enormous diversity in the population structures of those countries analysed in the Human Development Reports, particularly the shares of old people in the population. Second, that demographic characteristics are relevant in the evaluation of development possibilities. We propose to change the way of measuring health, education and material wellbeing, in order to take into account those differences in the population structures. We analyse empirically the effect induced by these changes in the evaluation of human development by comparing this way of measurement with the conventional HDI for 168 countries. |
| Keywords: | Human development, health, education, income, life potential, education potential. |
| JEL: | D63 O15 R23 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2017-04&r=age |
| By: | NAKATA Hiroyuki |
| Abstract: | This paper studies the impacts of heterogeneity such as age, gender, and education on the attitude towards immigration and the effectiveness of information campaigns based on a large-scale experiment conducted in Japan. The experiment randomly exposes a large national sample of citizens to information pertaining to potential social and economic benefits from immigration embedded in a comprehension study. The results complement the companion paper (Facchini, Margalit and Nakata, 2016), which shows that the overall effectiveness of such campaigns does not vary much across different groups, while there is a substantial generational gap in the level of support towards immigration. Also, tertiary education has a positive impact amongst female respondents, which is missing amongst the male counterparts. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:17095&r=age |
| By: | F. Barigozzi; H. Cremer; K. Roeder |
| Abstract: | Daughters are the principal caregivers of their dependent parents. In this paper, we study long-term care (LTC) choices by bargaining families with mixed- or same-gender siblings. LTC care can be provided either informally by children, or formally at home or in an institution. A social norm implies that daughters suffer a psychological cost when they provide less informal care than the average child. We show that the laissez-faire (LF) and the utilitarian first-best (FB) differ for two reasons. First, because informal care imposes a negative externality on daughters via the social norm, too much informal care is provided in LF. Second, the weights children and parents have in the family bargaining problem might differ in general from their weights in social welfare. We show that the FB allocation can be achieved through a system of subsidies on formal home and institutional care. Except when children and parents have equal bargaining weights these subsidies are gender-specific and reflect Pigouvian as well as "paternalistic" considerations. |
| JEL: | D13 H23 H31 I19 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1102&r=age |