nep-age New Economics Papers
on Economics of Ageing
Issue of 2017‒10‒08
eight papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Do savings increase in response to salient information about retirement and expected pensions? By Stichnoth, Holger; Dolls, Mathias; Dörrenberg, Philipp; Peichl, Andreas
  2. Redistributive effects of the US pension system among individuals with different life expectancy By Fürnkranz-Prskawetz, Alexia; Sanchez Romero, Miguel
  3. Hungry children age faster By Abeliansky, Ana Lucia; Strulik, Holger
  4. What's Happening to U.S. Mortality Rates? By Anqi Chen; Alicia H. Munnell; Geoffrey T. Sanzenbacher
  5. What do we learn about redistribution effects of pension systems from internationally comparable measures of Social Security Wealth? By Michele Belloni; Agar Brugiavini; Raluca E. Buia; Ludovico Carrino; Danilo Cavapozzi; Cristina E. Orso; Giacomo Pasini
  6. On secular stagnation and low interest rates: demography matters By Stefano Neri; Giuseppe Ferrero; Marco Gross
  7. La despoblación en Aragón, 2000-2016: tendencias, datos y reflexiones para el diseño de políticas By Adrián Palacios; Vicente Pinilla; Luis Antonio Sáez
  8. Ensuring Fiscal Sustainability in Japan in the Context of a Shrinking and Ageing Population By Randall S. Jones; Kohei Fukawa

  1. By: Stichnoth, Holger; Dolls, Mathias; Dörrenberg, Philipp; Peichl, Andreas
    Abstract: How can retirement savings be increased? We explore a unique policy change in the context of the German pension system to study this question. In 2004, pension authorities started to send out annual letters providing information about the pension system and expected pension payments. Using German tax return data, we exploit two discontinuities in the age cutoffs of receiving such a letter to study their effects on private retirement savings.
    JEL: H55 H24 J26 D14
    Date: 2017
  2. By: Fürnkranz-Prskawetz, Alexia; Sanchez Romero, Miguel
    Abstract: We investigate the differential impact that pension systems have on the labor supply and the accumulation of physical and human capital for individuals that differ by their learning ability and levels of life expectancy. Our analysis is calibrated to the US economy using a general equilibrium model populated by overlapping generations. Within our framework we analyze the redistributive and macroeconomic effects of a progressive versus a flat replacement rate of the pension system.
    JEL: H55 D58 D91 J11 J24 J26
    Date: 2017
  3. By: Abeliansky, Ana Lucia; Strulik, Holger
    Abstract: We analyze how childhood hunger affects human aging for a panel of European individuals. For this purpose, we use six waves of the Survey of Health, Aging, and Retirement in Europe (SHARE) dataset and construct a health deficit index. Results from log-linear regressions suggest that, on average, elderly European men and women developed about 20 percent more health deficits when they experienced a hunger episode in their childhood. The effect becomes larger when the hunger episode is experienced earlier in childhood. In non-linear regressions (akin to the Gompertz-Makeham law), we obtain greater effects suggesting that health deficits in old age are up to 40 percent higher for children suffering from hunger. The wedge of health deficits between hungry and and non-hungry individuals increases absolutely and relatively with age. This implies that individuals who suffered from hunger as children age faster.
    Keywords: health,aging,health deficit index,hunger episodes,childhood health
    JEL: I10 I19 J13
    Date: 2017
  4. By: Anqi Chen; Alicia H. Munnell; Geoffrey T. Sanzenbacher
    Abstract: A key factor affecting the cost of the Social Security program is how long beneficiaries live. Life expec­tancy is determined by mortality rates – that is, the probability of dying at each age. While mortality rates have been declining over time, progress has not been uniform. Sometimes mortality rates decline very rapidly, and sometimes they decline slowly. More­over, rates of improvement vary by age. For example, during most of the 20th century the mortality of in­fants and the working-age population fell faster than the mortality of retirees. This “age-gradient” matters for Social Security, since mortality improvements for young adults tend to help Social Security’s finances by expanding the size of the workforce paying into the system, while improvements at, say, age 65 tend to worsen it by increasing spending on benefits for longer-lived retirees. This brief explores the swings in the rate at which mortality has improved since 1900 and the impor­tance of the age gradient in these improvements over the period. It also takes a closer look at the years since 1969, when detailed data on cause of death are available. In retrospect, the factors leading to the speeding up and slowing down of mortality improve­ment are relatively clear. The future, as always, is harder to predict. This brief is the first of two on mortality rates; the second one will provide an inter­national perspective. The discussion proceeds as follows. The first section provides an overview of mortality trends and the age patterns since 1900. The second section focuses on the swings in mortality improvement in the last 40 years and the patterns by education level and by disease. The third section discusses the major drivers of these outcomes – such as developments in medicine, greater access to health care, the decline in smoking, and the rise in obesity. The fourth section explores the major factors that will influence the rate of improvement in mortality over the next 75 years. The final section concludes that the key debate for the long term is whether the future will mirror the past, with mortality rates of improvement fluctuating around 1 percent per year, or whether the big gains are behind us, with mortality improving less rapidly in the future.
    Date: 2017–09
  5. By: Michele Belloni (Department of Economics, University Of Venice Cà Foscari; Netspar; Cerp-Collegio Carlo Alberto); Agar Brugiavini (Department of Economics, University Of Venice Cà Foscari); Raluca E. Buia (Department of Economics, University Of Venice Cà Foscari); Ludovico Carrino (Department of Economics, University Of Venice Cà Foscari; King’s College London); Danilo Cavapozzi (Department of Economics, University Of Venice Cà Foscari; Netspar); Cristina E. Orso (Department of Economics, University Of Venice Cà Foscari); Giacomo Pasini (Department of Economics, University Of Venice Cà Foscari; Netspar)
    Abstract: We present novel estimates of Social Security Wealth (SSW) at the individual level based on the SHARE survey. Our estimates are based on a rigorous methodology taking into account country-specific legislations, the earnings history and the longevity prospects of individuals. The key advantage over existing estimates is that our measures of SSW is fully comparable across countries. This allows us to construct several indexes of the redistribution enacted by the pension systems in Europe. Moreover, simple correlations between SSW and alternative measures of private wealth are presented to provide descriptive evidence of the displacement effect of SSW on private wealth.
    Keywords: Social Security Wealth, SHARE, redistribution
    Date: 2017
  6. By: Stefano Neri (Banca d'Italia); Giuseppe Ferrero (Banca d'Italia); Marco Gross (European Central Bank)
    Abstract: Nominal and real interest rates in advanced economies have been decreasing since the mid-1980s and reached historical lows in the aftermath of the global financial crisis. Understanding why interest rates have fallen is essential for both monetary policy and financial stability. This paper focuses on one of the factors put forward in the literature within the secular stagnation view: adverse demographic developments. The main conclusion that we draw from the empirical analysis is that these developments have exerted downward pressure on real short- and long-term interest rates in the euro area over the past decade. Moreover, building on the European Commission’s projections for dependency ratios until 2025, we illustrate that the foreseen changes in the age structure of the population may dampen economic growth and continue exerting downward pressure on real interest rates in the future.
    Keywords: secular stagnation, demographic developments, real interest rates, monetary policy
    JEL: C32 E52 J11
    Date: 2017–09
  7. By: Adrián Palacios (University of Zaragoza); Vicente Pinilla (University of Zaragoza); Luis Antonio Sáez (University of Zaragoza)
    Abstract: En este trabajo se analizan las principales tendencias demográficas de Aragón entre 2000 y 2008. El análisis se hace tanto a escala comarcal como municipal para dos subperiodos: 2000-2008 y 2008-2016. El primero coincide con una etapa de crecimiento económico y expansión demográfica; el segundo con una profunda crisis y retroceso demográfico. Se concluye que es, sobre todo, la llegada de inmigrantes procedentes del extranjero la principal causa del crecimiento de la población en la primera etapa. También se estudian las políticas frente a la despoblación desarrolladas y se realizan una serie de recomendaciones para orientar las políticas futuras.
    Keywords: despoblación, políticas demográficas, inmigración, crecimiento demográfico
    JEL: J11 J18 N34 R58
    Date: 2017–06
  8. By: Randall S. Jones (OECD); Kohei Fukawa (OECD)
    Abstract: With gross government debt of 219% of GDP in 2016, Japan’s fiscal situation is in uncharted territory and puts the economy at risk. In addition to raising productivity and growth, Japan needs a more detailed and credible fiscal consolidation path, including specific revenue increases and measures to control spending to restore fiscal sustainability. Spending pressures associated with rapid population ageing make reforms to contain social expenditures a priority. Local governments need to be part of the effort to contain public spending in the context of a shrinking population. Much of the consolidation, though, will have to be on the revenue side, primarily through hikes in the consumption tax rate toward the OECD average and a broadening of the personal income tax base. Fiscal consolidation should be accompanied by measures to promote inclusive growth through the tax and benefit system, in particular by introducing an earned income tax credit to assist the working poor, hiking the tax on capital income and broadening the base of the inheritance tax. This Working Paper relates to the 2017 OECD Economic Survey of Japan ( y-japan.htm)
    Keywords: Abenomics, consumption tax, debt dynamics, EITC, fiscal consolidation, fiscal management strategy, fiscal policy, fiscal sustainability, healthcare, independent fiscal councils, inequality, long-term care, pensions, poverty, public debt, social security
    JEL: H2 H5 H6 H7
    Date: 2017–10–04

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