nep-age New Economics Papers
on Economics of Ageing
Issue of 2017‒10‒29
eight papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Is Poland a welfare state? By Jakub Sawulski
  2. Marriage-related policies in an estimated life-cycle model of households' labor supply and savings for two cohorts By Borella, Margherita; De Nardi, Mariacristina; Yang, Fang
  3. The Future of Human Health, Longevity, and Health Costs By Böhm, Sebastian; Grossmann, Volker; Strulik, Holger
  4. Reforming Medicaid Long Term Care Insurance By Minchung Hsu; Gary Hansen; Elena Capatina
  5. Retirement resources for every age By Wollan, Barb; Sternweis, Laura
  6. Bismarck in the bedroom? Pension reform and fertility: Evidence 1870-2010 By Jäger, Philipp
  7. Earnings test, non-actuarial adjustments and flexible retirement By Börsch-Supan, Axel; Härtl, Klaus; Leite, Duarte Nuno
  8. Herding behaviour of Dutch pension funds in sovereign bond investments By I. Koetsier; J.A. Bikker

  1. By: Jakub Sawulski
    Abstract: We determine whether Poland is a welfare state by looking at social expenditures as a share of GDP, taking into account that the share tends to increase with the level of income. By this criterion Poland is a welfare state. The share of social expenditure in GDP is high in Poland compared to countries with similar income levels, although still lower than in the majority of wealthier EU Member States. The structure of social expenditure in Poland is marked by high pension expenditure. Education spending is close to the EU average. Low public health expenditure, on the other hand, diverges from EU standards. Following the introduction of the Family 500+ Programme, Poland has become one of the top EU spenders on family policy. The main challenge for social policy is to improve the quality of health care and limit the negative impact of certain types of social expenditure on labour force participation.
    Keywords: welfare state, public expenditure, social expenditure
    JEL: H50 H53 H55
    Date: 2017–10
  2. By: Borella, Margherita; De Nardi, Mariacristina; Yang, Fang
    Abstract: In the U.S., both taxes and old age Social Security benefits explicitly depend on one's marital status. We study the effects of eliminating these marriage-related provisions on the labor supply and savings of two different cohorts. To do so, we estimate a rich life-cycle model of couples and singles using the Method of Simulated Moments (MSM) on the 1945 and 1955 birth-year cohorts. Our model matches well the life cycle profiles of labor market participation, hours, and savings for married and single people and generates plausible elasticities of labor supply. We find that these marriage-related provisions reduce the participation of married women over their life cycle, the participation of married men after age 55, and the savings of couples. These effects are large for both the 1945 and 1955 cohorts, even though the latter had much higher labor market participation of married women to start with.
    Date: 2017–10
  3. By: Böhm, Sebastian; Grossmann, Volker; Strulik, Holger
    Abstract: We investigate the future of human longevity, morbidity and health costs in a novel, multi-period OLG model with endogenous medical R&D and endogenous survival. Our calibrated model implies substantial future increases in longevity that are associated with both reductions in morbidity and a rising health expenditure share in GDP. Extending health care rationing has potentially sizable effects on morbidity and longevity, with dramatic welfare losses particularly for future generations.
    JEL: H50
    Date: 2017
  4. By: Minchung Hsu (National Graduate Institute for Policy Studies); Gary Hansen (UCLA); Elena Capatina (UNSW Business School)
    Abstract: We build a life-cycle model of household consumption and saving decisions, where long term care (LTC) expenditures are endogenous. We use an LTC-state dependent utility function where regular consumption and LTC are valued differently. The model includes both married and single households, thus capturing important family dynamics that are important for precautionary savings and LTC decisions. Married individuals face the risk of a spouse needing LTC and quickly depleting joint assets. However, those needing LTC can benefit from the presence of a healthy spouse who provides informal care, lowering the costs of LTC given a fixed quality of care. We use the calibrated model to estimate the importance of family dynamics for savings and consumption decisions, and also to quantify the impacts of LTC policy reforms such as the provision of a universal public system that pays for a minimum level of LTC costs.
    Date: 2017
  5. By: Wollan, Barb; Sternweis, Laura
    Date: 2016–03–30
  6. By: Jäger, Philipp
    Abstract: Rising public pension generosity has frequently been cited as one reason for the (persistently) declining fertility rates in many advanced economies. Despite the theoretical appeal, empirical evidence on the pension-fertility nexus is limited. To fill this gap, I study country-level fertility trends before and after 23 pension reforms using a long-run panel dataset starting in 1870. I find no evidence that pension reforms, on average, affect fertility in the way most theoretical models predict.
    JEL: H55 J13
    Date: 2017
  7. By: Börsch-Supan, Axel; Härtl, Klaus; Leite, Duarte Nuno (Munich Center for the Economics of Aging (MEA))
    Date: 2017–09–12
  8. By: I. Koetsier; J.A. Bikker
    Abstract: This study investigates herding behaviour exhibited by Dutch pension funds in the sovereign bond market. It uses a unique dataset on sovereign bond holdings of pension funds, mutations and transactions between December 2008 and December 2014. It covers 67 large Dutch pension funds that invest in 109 countries. We find evidence of intensive herding behaviour of Dutch pension funds in sovereign bonds. Our findings also show that institutional factors, the macroeconomic environment and the financial market environment are among the determinants of herding behaviour in sovereign bonds. Our results also indicate that high diversification is not without costs as it intensifies herding behaviour. We find mixed evidence on whether pension funds are stabilising actors. The destabilising effect is most pronounced on the sell side, while stabilisation is most prominent under more extreme price shocks. The distinction between developing and emerging economies and developed economies does not change these results.
    Date: 2017–09

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