nep-age New Economics Papers
on Economics of Ageing
Issue of 2017‒08‒27
thirteen papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Inclusive recruitment? Hiring discrimination against older workers By Drydakis, Nick; MacDonald, Peter; Bozani, Vasiliki; Chiotis, Vangelis
  2. Nudging Retirement Savings: A Field Experiment on Supplemental Plans By Robert L. Clark; Robert G. Hammond; Melinda Sandler Morrill; Christelle Khalaf
  3. Obrigações Futuras com a Previdência dos Servidores Públicos Municipais: análise longitudinal By Bernardo P. Schettini
  4. How the Baby Boomers' Retirement Wave Distorts Model-Based Output Gap Estimates By Maik Wolters
  5. State and Local Pension Plan Funding Sputters in FY 2016 By Jean-Pierre Aubry; Caroline V. Crawford; Alicia H. Munnell
  6. A new chance for private pension saving? By Demary, Markus; Kochskämper, Susanna
  7. Long-term care reform and the labor supply of informal caregivers – evidence from a quasi-experiment By Geyer, J.; Korfhage, T.;
  8. Do Women Still Spend Most of Their Lives Married? By Alicia H. Munnell; Geoffrey T. Sanzenbacher; Sara Ellen King
  9. Longevity and Lifetime Education: Global Evidence from 919 Surveys By Mohammad Mainul Hoque; Elizabeth King; Claudio E. Montenegro; Peter F. Orazem
  10. The Health Benefits of a Targeted Cash Transfer:The UK Winter Fuel Payment By Crossley, T.F.; Zilio, F.;
  11. Rising Longevity, Fertility Dynamics, and R&D-based Growth By Koichi Futagami; Kunihiko Konishi
  12. Social Security Contributions and the Business Cycle By Alexander Meyer-Gohde;
  13. Changing Demography of Social Safety Net Programs By Colleen Heflin; Yumiko Aratani

  1. By: Drydakis, Nick; MacDonald, Peter; Bozani, Vasiliki; Chiotis, Vangelis
    Abstract: Addressing population ageing requires a rise in the activity rates of older workers. In this study, a field experiment for the period 2013-2015 in the UK, suggests that age discrimination persists at alarming levels. It shows that when two applicants engage in an identical job search, the older applicant would gain fewer invitations for interviews regardless of her/his experience or superiority for the appointment. The results also suggest that older applicants face higher occupational access constraints for blue-collar jobs than white-collar/pink-collar jobs, and that women face greater age discrimination than men. Worryingly, the outcomes suggest that older applicants gain poorer access to vacancies than younger applicants irrespective of written commitments to equal opportunities. The design of the study suggests that discrimination results from distaste for older applicants, which has not been eliminated by the introduction of anti-discrimination legislation. Eliminating ageism in recruitment requires organizations to adopt more inclusive HR policies at the earliest stages of the recruitment process. Social dialogue has a crucial role to play in shaping inclusive and discrimination free recruitment policies such that shared values and beliefs are not age-discriminatory but rather recognize the strengths and potential of workers from different age groups.
    Keywords: Access to Occupations,Wages,Ageism,Women,Discrimination
    JEL: C93 C9 J14 J1
    Date: 2017
  2. By: Robert L. Clark; Robert G. Hammond; Melinda Sandler Morrill; Christelle Khalaf
    Abstract: Although supplemental saving plans can be an important part of an individual's financial security in retirement, contribution rates remain low, particularly among those with lower salaries and less education. We report findings from a field experiment that distributed an informational nudge containing information on key aspects of the employer-provided supplemental saving plans of older public employees in North Carolina. Among workers participating in a supplemental plan, individuals who received an informational nudge increased their contributions in the months following the intervention relative to the control group. Moreover, those that received the nudge reported in a subsequent survey that they were more likely to have developed a retirement plan and report more confidence in their retirement preparedness. In contrast, individuals who were not enrolled in a retirement saving plan were not moved to begin contributing to a supplemental plan.
    JEL: J32
    Date: 2017–08
  3. By: Bernardo P. Schettini
    Abstract: Este trabalho constrói indicadores dos níveis de fundeamento da previdência dos municípios no Brasil a partir de demonstrativos atuariais e relatórios orçamentários, com o intuito de testar hipóteses acerca das razões que contribuíram para a elevação do subfinanciamento nos últimos anos apesar das reformas de 1998 e 2003 e da maior supervisão exercida pelo governo federal desde 2004. Os dados cobrem os anos de 2008 e 2012. Os resultados são compatíveis com a hipótese de suavização dos impostos e mostram que o quadro político-eleitoral pode ser relevante, apesar de parte da variação estar relacionada a tendências gerais. Diante da deterioração fiscal, os prefeitos escolhem acumular obrigações com a previdência no lugar de cortar outros gastos ou aumentar os impostos. Mais candidatos por cadeira na câmara de vereadores reduz o deficit intertemporal. Prefeitos com maioria no Legislativo melhoram a situação de longo prazo, mas aqueles que estão exercendo o segundo mandato cuidam menos do fundo de previdência local. This paper calculates indexes for the funding levels of municipal retirement systems in Brazil using actuarial valuations and budget reports aiming to test hypotheses regarding the reasons which have driven underfunding in the past years notwithstanding the 1998 and 2003 reforms and the greater supervision exercised by the federal government since 2004. Data are for the years of 2008 and 2012. The results are in line with the tax-smoothing hypothesis and show that electoral politics may be relevant, although part of the variation is related to general trends. ln times of fiscal deterioration, the incumbent chooses to accumulate pension liabilities rather than increasing taxation or cutting other expenses. More candidates relative to the number of seats in the legislative chamber reduces the intertemporal deficit. Mayors enjoying support from the majority of the councilmen improve the long-run position, but the lame-duck ones care less about the local pension fund.
    Date: 2017–05
  4. By: Maik Wolters (FSU Jena)
    Abstract: This paper illustrates the importance of consistency between the empirical measurement and the concept of variables in macroeconomic models. Since standard New Keynesian models do not account for demographic trends and sectoral shifts, I propose adjusting hours per capita used to estimate such models to enhance the consistency between the data and the model. Without this adjustment, low frequency shifts in hours lead to unreasonable trends in the output gap, caused by the close link between hours and the output gap in such models. The retirement wave of baby boomers, for example, lowers U.S. aggregate hours per capita, which leads to erroneous permanently negative output gap estimates following the Great Recession. After correcting hours for changes in the age composition, the estimated output gap closes gradually instead following the years after the Great Recession.
    Keywords: low frequency trends, demographic trends, hours per capita measurement, output gap estimates, DSGE models, Bayesian estimation
    JEL: C54 E32 J11
    Date: 2017–08–15
  5. By: Jean-Pierre Aubry; Caroline V. Crawford; Alicia H. Munnell
    Abstract: The aggregate funded status of state and local pension plans declined in fiscal year (FY) 2016, because liabilities continued to grow steadily while poor stock market performance led to slow asset growth. Thus, the ratio of assets to liabilities fell whether measured by the old Governmental Accounting Standards Board standard (GASB 25), which uses a smoothed value of assets, or by the new standard (GASB 67), which values assets at market. While the new standard has been in effect since 2014, most plans also still report numbers under the traditional rules. As such, this brief provides a multi-year comparison of the two approaches. The discussion is organized as follows. The first section reports that the ratio of assets to liabilities for the 170 plans in the Public Plans Database decreased from 73 percent in 2015 to 72 percent in 2016, as measured by the traditional GASB standard; and from 73 percent to 68 percent, as measured by the new standard. The second and third sections separately evaluate the changes in assets and liabilities, respectively. The fourth section shows that, for the sample as a whole, both the required contribution and the percentage of required contribution paid have remained relatively constant since 2015. The fifth section projects funded ratios for our sample for 2017-2021 under two scenarios of investment performance. Even though 2017 has been a very good year in terms of market returns, plan funded ratios are projected to grow only modestly by 2021 even if plans achieve their assumed returns (currently 7.6 percent on average). The final section concludes that, in order to see more meaningful improvement in funded levels going forward, plans need to set and pay a more sufficient actuarially determined employer contribution, in addition to achieving their assumed returns.
    Date: 2017–07
  6. By: Demary, Markus; Kochskämper, Susanna
    Abstract: The European Commission aims at strengthening the cross-border provision of pension products by the introduction of Pan-European Personal Pensions (PEPP) as a new regime on top of existing national frameworks. However, a pre-requisite for the success of PEPP will be the support of the national legislators for this framework.
    Date: 2017
  7. By: Geyer, J.; Korfhage, T.;
    Abstract: Germany introduced a new insurance for long-term care in 1995 as part of its social security system. Benefits from the long-term care insurance are not means tested and only depend on the required level of care. The new scheme improved the situation for households wanting to organize informal care at home and it changed the incentives for potential informal caregivers. We exploit this reform as a quasi-experiment and examine its effect on the labor supply of caregivers who live in the same household as the care recipient. We find strong negative labor market effects for men but not for women.
    Keywords: labor supply; long-term care; long-term care insurance; quasi-experimental approach;
    JEL: J22 H31 I13
    Date: 2017–08
  8. By: Alicia H. Munnell; Geoffrey T. Sanzenbacher; Sara Ellen King
    Abstract: People are often interested in studying the saving behavior of women. But one could argue that women have traditionally lived in households where the couple makes decisions jointly. In that world, the main distinction is between married women and single women, not between men and women. But the times are changing, so the question is whether women are still spending most of their lives married. This brief addresses that question using data from the Health and Retirement Study. The discussion proceeds as follows. The first section describes the nature of the exercise and presents the basic results, which show a decline in the percentage of adult years spent married. The second section identifies the factors contributing to this decline: an increase in the age of first marriage, a drop in the percentage of women who marry, and – for those who do marry – an increase in divorce. The third section presents the results by race and education. The final section concludes that if women as a group now spend about half of their adult years unmarried, it probably makes sense to explore their savings and investment behavior separately from men.
    Date: 2017–08
  9. By: Mohammad Mainul Hoque; Elizabeth King; Claudio E. Montenegro; Peter F. Orazem
    Abstract: Data from 919 household surveys conducted between 1960 and 2012 spanning 147 economies are used to evaluate the relationship between rising life expectancy at birth and lifetime years of schooling for successive birth cohorts between 1905 and 1988. We find significant positive effects of increased life expectancy at birth on lifetime completed years of schooling in 95% of the surveys with significant negative effects found in only 2.3%. Rising life expectancy at birth for a birth cohort has intergenerational benefits in that their children’s schooling also increases. Rising life expectancy at birth since 1905 can explain 70% of the rising completed years of schooling for those birth cohorts.
    Date: 2017–08
  10. By: Crossley, T.F.; Zilio, F.;
    Abstract: Each year the UK records 25,000 or more excess winter deaths, primarily among the elderly. A key policy response is the “Winter Fuel Payment†(WFP), a labelled but unconditional cash transfer to older households. The WFP has been shown to raise fuel spending among eligible households. We examine the causal effect of the WFP on health outcomes, including self-reports of chest infection, measured hypertension and biomarkers of infection and inflammation. We find a robust and statistically significant six percentage point reduction in the incidence of high levels of serum fibrinogen. Reductions in other disease markers point to health benefits, but the estimated effects are not robustly statistically significant.
    Keywords: benefits; health; biomarkers; heating; regression discontinuity;
    JEL: H51 I12
    Date: 2017–08
  11. By: Koichi Futagami (Graduate School of Economics, Osaka University); Kunihiko Konishi (Research Fellow of the Japan Society for the Promotion of Science (JSPS))
    Abstract: This study constructs an overlapping-generations model with endogenous fertility, mortality, and R&D activities. We demonstrate that the model explains the observed fertility dynamics of developed countries. When the level of per capita wage income is either low or high, an increase in such income raises the fertility rate. When the level of per capita wage income is in the middle, an increase in such income decreases the fertility rate. The model also predicts the observed relationship between population growth and innovative activity. At first, both the rates of population growth and technological progress increase, that is, there is a positive relationship. Thereafter, the rate of population growth decreases but the rate of technological progress increases, showing a negative relationship.
    Keywords: Fertility, Mortality, R&D
    JEL: D91 J13 O10
    Date: 2017–08
  12. By: Alexander Meyer-Gohde;
    Abstract: This paper examines magnitudes and business cycle dynamics of social security contributions (SSC). In most OECD countries studied, we document a negative covariation of payroll tax burdens with GDP and GDP growth at business cycle and lower frequencies. We assess the overall magnitude of the distortion following Barro and Redlick (2011). For most countries, average marginal SSC tax rates exceed average rates, but the latter tracks the former tightly. Changes in average payroll tax burdens are mostly accounted for by changes in tax schedules rather than shifts in the earnings distribution over time. For many countries, SSC rates behave like estimated values of the “labor wedge” (Chari et al. 2007, Brinca et al., 2016).
    Keywords: business cycle, payroll tax, social security contributions, labor wedge
    JEL: E24 E32 J32 H55
    Date: 2017–08
  13. By: Colleen Heflin; Yumiko Aratani
    Abstract: This report highlights the changing socio-demographic composition of program participants for AFDC/TANF, SNAP and SSI between 1988 and 2015 and discusses the importance of addressing the needs of program participants from diverse backgrounds.
    Keywords: TANF program participants demography, SNAP program participants demography, SSI program participants demography
    JEL: I

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