nep-age New Economics Papers
on Economics of Ageing
Issue of 2017‒11‒19
nine papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Economic Retirement Age and Lifelong Learning - a theoretical model with heterogeneous labor, biased technical change and international sourcing By Thomas Gries; Stefan Jungblut; Tim Krieger; Henning Meyer
  2. Nutritional Quality of Congregate and Home-Delivered Meals Offered in the Title III-C Nutrition Services Program: An Examination Utilizing the Healthy Eating Index Tool By Katherine Niland; Mary Kay Fox; Elizabeth Gearan
  3. No “Honeymoon Phase” Whose health benefits from retirement and when By Birgit Leimer
  4. Maybe "Honor Thy Father and Thy Mother": Uncertain Family Aid and the Design of Social Long Term Care Insurance By Chiara Canta; Helmuth Cremer; Firouz Gahvari
  5. Who Benefits from Fiscal Redistribution in the Russian Federation? By Luis F. Lopez-Calva; Nora Lustig; Mikhail Matytsin; Daria Popova
  6. Wealth creation, wealth dilution and population dynamics By Christa N. Brunnschweiler; Pietro F. Peretto; Simone Valente
  7. The Impact of Intergenerational Transfers on Household Wealth Inequality in Japan and the United States By Niimi, Yoko; Horioka, Charles Yuji
  8. The Rise and Future of Progressive Redistribution By Peter H. Lindert
  9. Raising living standards and supporting investment by boosting skills in Slovenia By Rory O’Farrell

  1. By: Thomas Gries; Stefan Jungblut; Tim Krieger; Henning Meyer
    Abstract: The employability of an aging population in a world of continuous and biased technical change is top of the political agenda. Due to endogenous human capital depreciation the effective retirement age is often below statutory retirement age resulting in permanent non-employability of older workers. We analyze this phenomenon in a putty-putty human capital vintage model and focus on education and the speed of human capital depreciation. Introducing a two-stage education system with initial schooling and lifelong learning, not even lifelong learning turns out to be capable of aligning economic and statutory retirement. However, well designed education programs will keep more workers in highly productive activities at the end of their working life, and hence will substitute for simple social transfers, or for an early switch towards very low paid jobs.
    Keywords: lifelong learning, retirement, employability, education system, heterogeneous labor, biased technical change
    JEL: J26 O33 J64
    Date: 2016
  2. By: Katherine Niland; Mary Kay Fox; Elizabeth Gearan
    Abstract: The Nutrition Services Program (NSP), administered by the Administration on Aging within the Administration for Community Living, is designed to alleviate hunger and food insecurity among the elderly while also giving them the opportunity to enrich their social lives. The NSP aims to achieve these goals, in part, by serving congregate meals at senior centers or other community settings and providing home-delivered meals to homebound participants.
    Keywords: Healthy Eating Index-2010, nutritional quality, Dietary Guidelines, congregate meals, home-delivered meals
    JEL: I0 I1
  3. By: Birgit Leimer (Johannes Gutenberg-University Mainz, Germany)
    Abstract: I use a fixed effects instrumental variable approach to determine the effect retirement has on health. The exogenous variation in the probability to retire at the normal and early retirement age thresholds is exploited to instrument for the otherwise endogenous retirement decision. Six health aspects are considered: self-assessed health, depression, limitations in (instrumental) activities of daily living, mobility limitations, grip strength and number of words recalled. Using data for 10 countries from the Survey of Health, Retirement and Ageing in Europe (SHARE), I find that retiring both at the normal and early retirement eligibility ages significantly improves all health aspects, including the objective measure grip strength. Results do not generally support the theory that previous research was biased towards zero due to behavioral changes during the anticipation phase prior to retirement. Results also do not show the presence of a honeymoon phase directly following the start of retirement, in which individuals are believed to experience a euphoric state leading health improvements. It appears that individuals, especially blue collar workers, go through an adjustment period after retirement in which they experience more health problems, before stabilizing and improving. Overall, retirement has a health preserving effect for both genders and all occupations in the long term. Neither blue collar workers nor workers with physically or psychologically demanding jobs benfit more from retirement than others.
    Keywords: retirement, health, honeymoon, retirement phases, SHARE, fixed effects, instrumental variables
    Date: 2017–10
  4. By: Chiara Canta; Helmuth Cremer; Firouz Gahvari
    Abstract: We study the role and design of private and public insurance programs when informal care is uncertain. Children’s degree of altruism is randomly distributed over some interval. Social insurance helps parents who receive a low level of care, but it comes at the cost of crowding out informal care. Crowding out occurs both at the intensive and the extensive margins. We consider three types of LTC policies: (i) a topping up (TU) scheme providing a transfer which is non exclusive and can be supplemented; (ii) an opting out (OO) scheme which is exclusive and cannot be topped up and (iii), a mixed policy combining these two schemes. TU will involve crowding out both at the intensive and the extensive margins, whereas OO will crowd out informal care solely at the extensive margin. However, OO is not necessarily the dominant policy as it may exacerbate crowding out at the extensive margin. The distortions of both policies can be mitigated by using an appropriately designed mixed policy.
    Keywords: long term care, uncertain altruism, private insurance, public insurance, topping up, opting out
    JEL: H20 H50
    Date: 2016
  5. By: Luis F. Lopez-Calva (World Bank); Nora Lustig (Stone Center for Latin American Studies, Department of Economics, Tulane University, Commitment to Equity Institute (CEQI).); Mikhail Matytsin (World Bank); Daria Popova (World Bank)
    Abstract: This paper shows that the system of taxes and transfers in Russia has a limited redistributive capacity vertically (among different income groups)—particularly when pensions are assumed to be deferred income—though it does achieve significant horizontal redistribution (among sociodemographic groups). The main results of the analysis, concern the Russian fiscal system’s limited redistributive effect,low effectiveness in poverty reduction, and relatively poor net financial impact on all demographic groups except pensioners. Firstly, benchmarking shows that the Russian system of direct taxes and transfers does not compare well with countries that achieve larger redistribution, in particular European Union countries. Secondly,net direct taxes (incorporated into disposable income) are always equalizing, but net indirect taxes (incorporated into consumable income) are unequalizing in both the benchmark and the sensitivity analysis scenarios. Thirdly, under the benchmark scenario, the net effect of the fiscal system is actually poverty increasing. Finally, it appears that all households of working-age people with and without children are net payers under the Russian fiscal system, while only pensioners’ households benefit from the fiscal redistribution in Russia under both scenarios. The main conclusion that emerges from this analysis is that there are both equity and efficiency reasons to review the tax and social spending structure. Such an exercise may require, however, a good understanding of the political economy of a potential reform.
    Keywords: fiscal policy, fiscal incidence, social spending, inequality, poverty, taxes, Russia
    JEL: H22 I38 D31
    Date: 2017–05
  6. By: Christa N. Brunnschweiler (University of East Anglia); Pietro F. Peretto (Duke University); Simone Valente (University of East Anglia)
    Abstract: Wealth creation driven by R&D investment and wealth dilution caused by disconnected generations interact with households' fertility decisions, delivering a theory of sustained endogenous output growth with a constant endogenous population level in the long run. Unlike traditional theories, our model fully abstracts from Malthusian mechanisms and provides a demography-based view of the long run where the ratios of key macroeconomic variables - consumption, labor incomes and financial assets - are determined by demography and preferences, not by technology. Calibrating the model parameters on OECD data, we show that negative demographic shocks induced by barriers to immigration or increased reproduction costs may raise growth in the very long run, but reduce the welfare of a long sequence of generations by causing permanent reductions in the mass of firms and in labor income shares, as well as prolonged stagnation during the transition.
    Keywords: R&D-based growth, overlapping generations, endogenous fertility, population level, wealth dilution
    JEL: O41 J11 E25
    Date: 2017–10–18
  7. By: Niimi, Yoko (Asian Development Bank Institute); Horioka, Charles Yuji (Asian Development Bank Institute)
    Abstract: To help shed light on the implications of intergenerational transfers for wealth inequality, we use data for Japan and the United States to examine whether individuals who receive intergenerational transfers from their parents are more likely to leave bequests to their children than those who do not. The estimation results show that the receipt of intergenerational transfers from parents and/or parents-in-law increases the likelihood of individuals leaving bequests to their children in both Japan and the United States, which in turn is likely to contribute to the persistence or widening of wealth disparities. However, such a tendency is found to be stronger among less-better-off households in both countries, and this may help alleviate the disequalizing effect of intergenerational transfers on the distribution of wealth, at least to some extent.
    Keywords: bequests; education; inheritances; intergenerational transfers; inter vivos transfers; wealth distribution; wealth inequality; US
    JEL: D10 D31 D64 E21 I24
    Date: 2017–02–01
  8. By: Peter H. Lindert (University of California–Davis)
    Abstract: Starting from today’s collection of estimates of fiscal distribution within each of 53 countries, we can begin mapping a history of how redistribution has evolved historically, and to project some influences on its trends in the next few decades. There appears to have been a global shift toward progressive redistribution over the last hundred years in all prosperous countries. The retreats toward regressive redistribution have been rare and have been reversed. As a corollary, the rise in income inequality since the 1970s owes nothing to any retreat from progressive government spending. Adding the effects of rising subsidy for public education on the later inequality of adult earning power strongly suggests that a fuller, longer-run measure of fiscal incidence would reveal a history of still greater shift toward progressivity, most notably in Japan, Korea, andTaiwan. The key determinant of progressivity in the decades ahead is population aging, not inequality itself or immigration backlash.
    JEL: H22 H23 H24 N30
    Date: 2017–10
  9. By: Rory O’Farrell (OECD)
    Abstract: Higher living standards and well-being, as well as convergence with more advanced economies, will depend on achieving higher productivity, which in turn would be boosted by more investment in capital. In particular, investment in knowledge-based capital and greater inward FDI can help Slovenia develop its economy and improve global integration. Complementing such investments requires a workforce that is given the opportunities and incentives to continuously engage in upskilling and seek employment where they are most productive, in the process raising their incomes. Reskilling can be improved by boosting the links between educational institutions and local and foreign firms, helping Slovenia to overcome its problems of long-term unemployment and low employment rates of older workers. Improving life-long learning will allow workers to adapt to a changing economic environment and thereby contribute to their own well-being. Adjusting wage determination and broadening labour market activation measures can smooth these adjustments. This Working Paper relates to the 2017 OECD Economic Survey of Slovenia ( y-slovenia.htm).
    Keywords: adult education, human capital, labour market, productivity, reallocation, skills, training
    JEL: J21 J24 J32
    Date: 2017–11–20

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