nep-age New Economics Papers
on Economics of Ageing
Issue of 2017‒12‒18
twelve papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Quality and cost-effectiveness in long-term care and dependency prevention: the Polish policy landscape By Stanislawa Golinowska; Agnieszka Sowa-Kofta
  2. Estimating, and interpreting, retirement income replacement rates By Barrett, Alan; Nivakoski, Sanna
  3. Ageing in Russia: Regional Inequalities and Pension Reform By Stuart Gietel-Basten; Vladimir Mau; Warren Sanderson; Sergei Scherbov; Sergey Shulgin
  4. Grandmothers' Labor Supply By Frimmel, Wolfgang; Halla, Martin; Schmidpeter, Bernhard; Winter-Ebmer, Rudolf
  5. The fiscal projection framework in long-term scenarios By Yvan Guillemette; David Turner
  6. Social harmonization and labor market performance in Europe By Katarzyna Mirecka; Izabela Styczyñska
  7. Predicting Receipt of Social Security Administration Disability Benefits Using Biomarkers and Other Physiological Measures: Evidence from the Health and Retirement Study By Laura Blue; Lakhpreet Gill; Jessica Faul; Kevin Bradway; David Stapleton
  8. Health, Retirement and Consumption By Malene Kallestrup-Lamb; John Kennan; Bent Jesper Christensen
  9. Chancen und Risiken der Digitalisierung für ältere Produktionsarbeiter By Bellmann, Lutz
  10. Gender longevity gap and socioeconomic indicators in developed countries By Fedotenkov, Igor; Derkachev, Pavel
  12. Offshoring and the Age-Skill Composition of Labour Demand By Sotiris Blanas

  1. By: Stanislawa Golinowska; Agnieszka Sowa-Kofta
    Abstract: With the population ageing the development of sustainable long-term care institutions is of great importance in many European countries. In Poland, currently dominant, traditional and family based care will become insufficient with increasing cohorts of older people. Presented paper discusses recent developments in long-term care policy in the country. Long-term care institutions are separated in the two sectors, with little field for cooperation and coordination of activities. Over the past years policy addressing ageing related problems was developed, focusing on the active ageing instruments. Dependency prevention and active ageing are among goals of national policies formulated separately in the health and social sector. Information policy and monitoring long-term care services’ provision remains insufficient. Coordination of activities mainly takes place at the local level. Local governments and non-governmental organizations, often cooperating with representatives of older people, are active in providing services to older people in community and often incorporating innovative solutions in care.
    Keywords: long-term care policy, long-term care institutions, informal care, dependency prevention, ageing, older people
    JEL: I10 I18 I31 I38
    Date: 2017
  2. By: Barrett, Alan; Nivakoski, Sanna
    Abstract: Longitudinal data are used to estimate retirement income replacement rates of employees in Ireland who transition into retirement over the period 2010 to 2014. The median replacement rate is estimated at 50 per cent, with the mean at 78 per cent. The mean estimate seems high relative to stated policy goals but further analysis shows that the estimate results in part from very high replacement rates at the lower end of the income distribution. This in turn results from the flat-rate nature of social welfare pensions in Ireland. More broadly, Ireland’s pension system is shown to produce a more equal distribution of replacement rates compared to pre-retirement income. However, this leads to a question as to whether policy goals in the areas of pension adequacy should be set with respect to income or consumption levels as opposed to replacement rates.
    Date: 2017–11
  3. By: Stuart Gietel-Basten (Division of Social Science, The Hong Kong University of Science and Technology; Institute of Emerging Market Studies, The Hong Kong University of Science and Technology); Vladimir Mau (Russian Presidential Academy of National Economy and Public Administration); Warren Sanderson (Stony Brook University); Sergei Scherbov (International Institute for Applied Systems Analysis); Sergey Shulgin (Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The Russian Federation, like most industrial and post-industrial countries, is currently in the midst of a great discussion about how to meet the challenges of population ageing. Again, in common with many other countries, a discussion is taking place regarding both the parameters and, indeed, the very nature of the pension system and the relationship between work and retirement. In this paper, we have sought to present a more systematic representation of ageing in Russia. We have done so by presenting a series of standard and alternative measurements. By doing so, it is possible to suggest that the scale of ageing in Russia is arguably exaggerated precisely by the low pensionable ages. The second contribution of this paper is to explicitly bring in the concept of inequality regarding pension entitlement. Noting that these dimensions of inequality include gender, geography and socioeconomic differentials, we found that the current heterogeneity of conditions of wellbeing in Russia are such that very high degrees of inequality can be detected.
    Date: 2017–12
  4. By: Frimmel, Wolfgang; Halla, Martin; Schmidpeter, Bernhard; Winter-Ebmer, Rudolf
    Abstract: The labor supply effects of becoming a grandmother are not well established in the empirical literature. We estimate the effect of becoming a grandmother on the labor supply decision of older workers. Under the assumption that grandmothers cannot predict the exact date of conception of their grandchild, we identify the effect of the first grandchild on employment (extensive margin). Our Timing-of-Events approach shows that having a first grandchild increases the probability of leaving prematurely the labor market. This effect is stronger when informal childcare is more valuable to the mother. To estimate the effect of an additional grandchild (intensive margin), we assume that the incidence of a twin birth among the third generation is not correlated with unobserved determinants of the grandmother's labor supply (first generation). Our respective 2SLS estimation shows a significant effect of further grandchildren. Our results highlight the important influence of the extended family on the decisions of older workers and point to mediating effects of different institutional settings.
    Keywords: Female labor supply; grandchildren; instrumental variables; timing of events
    JEL: J13 J14 J22
    Date: 2017–12
  5. By: Yvan Guillemette; David Turner
    Abstract: The paper describes the fiscal framework used in long-term economic scenarios, with some emphasis on revisions made since the 2013 vintage of the long-term model. Long-term projections for public spending on pensions, health and long-term care are now separate from other primary expenditure and sourced from previous OECD work taking account of population ageing and other cost pressures. Other primary expenditure are assumed to remain constant in real terms on a per capita basis, rather than remaining stable as a share of GDP. This difference is important for long-term fiscal projections because government finances are sensitive to the employment rate, whereas expenditure is linked to the total population. A fiscal rule adjusts government revenue to ensure that public debt eventually stabilises as a share of GDP, making government revenue as a share of GDP the preferred indicator of future fiscal pressure.
    Keywords: Fiscal projections, long-term model, long-term scenarios
    JEL: E17 E62 H68
    Date: 2017–11–29
  6. By: Katarzyna Mirecka; Izabela Styczyñska
    Abstract: The paper aims to assess the impact of selected elements of social harmonization on labor market performance in the European Union among two groups of workers—the total working population and the elderly. The aim is to examine whether upward changes in labor taxes affect employment, unemployment, and inactivity rates in the European Union.
    Keywords: employment of the elderly, minimum wage, social security contributions, labor tax, Social Europe
    JEL: J31 J32 C23 J38 J41 J61 H53 H55
    Date: 2017–04
  7. By: Laura Blue; Lakhpreet Gill; Jessica Faul; Kevin Bradway; David Stapleton
    Abstract: This study assesses how well physiological markers, including select biomarkers and genetic indicators, predict benefits receipt under Social Security Disability Insurance or Supplemental Security Income due to disability. The article appears in the Journal of Aging and Health.
    Keywords: biomarkers, genetics, disability, Social Security Disability Insurance, Health and Retirement Study
    JEL: I J
  8. By: Malene Kallestrup-Lamb (University of Aarhus); John Kennan (University of Wisconsin Madison); Bent Jesper Christensen (Aarhus University)
    Abstract: The paper analyzes consumption decisions of retired workers, using Danish register data. A major puzzle, which motivates much of the analysis below, is that wealth actually increases for a large fraction (roughly half) of the people in our data. One would expect that wealth accumulated before retirement would be used to augment consumption in later life, with the implication that wealth should decline over time. The risk of large out-of-pocket medical expenditures is negligible in Denmark, so although explanations associated with such expenditures might explain similar patterns in U.S. data, these explanations are not plausible for Denmark (and therefore also questionable for the U.S.) Our analysis instead attempts to explain wealth paths using a model that emphasizes health-related fluctuations in the marginal utility of consumption.
    Date: 2017
  9. By: Bellmann, Lutz (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Based on data from the German Linked Personnel Panel 2015 the process of digitalisation is associated for most of the employees with less physical hardships on the one hand and the necessity of the development of abilities and competences on the other hand. Thereby, the employees less often point out the reduction of physical hardships than the enhancement of abilities and competences. The differentiation with respect to the age is not pronounced. However, male production workers indicate more often than male employees with different functions that they experience a reduction of physical hardships. In addition, male production workers report the necessity of skill enhancement more often. Furthermore, the results obtained reveal, that the employees accept this challenge: A comparison of the results of the Linked Personnel Panel survey 2013 and 2015 demonstrates a clear rise in the participation in training course (at least partly financed by the employer) for all age groups. Against the background that employers consider older employees as less willing and able to attend further training measures, these results are good news." (Author's abstract, IAB-Doku) ((en))
    Date: 2017–12–05
  10. By: Fedotenkov, Igor; Derkachev, Pavel
    Abstract: In most countries, women live longer than men. Differences in longevities are country-specific and change over time. We perform a cross-country panel data analysis in developed countries (OECD and EU) to study the gender-longevity gap dependence on various socio-economic indicators and test a number of contradicting theories. We show that a lower gender longevity gap is associated with a higher real GDP per capita, a higher level of urbanization, lower income inequality, lower per capita alcohol consumption and a better ecological environment. An increase in women's aggregate unemployment rate and a decline in men's unemployment are associated with a higher gap in life expectancies. The effect of the share of women in parliaments in the gender-longevity gap is estimated to have a U-shape; it has a better descriptive efficiency if taken with a 5-years lag, which approximately corresponds to the length of political cycles.
    Keywords: Gender longevity gap, inequality, cross-country analysis, life expectancy
    JEL: J11 J14 J16 J71
    Date: 2017–12–08
  11. By: Liis Roosaar, Jaan Masso, Urmas Varblane
    Abstract: This paper aims to clarify how changes in the age and wage composition of the labour force are related to the productivity of firms over the business cycle. Based on a matched employer-employee database of Estonian firms from 2006–2014, we decompose changes in the labour force and distinguish between hired, separated and staying workers. Considering the age and wage of workers, we link changes in the labour force to changes in productivity. Using fixed effect panel data analysis we indicate that among high-waged employees middle-aged are the most productive, the productivity decreases with age but remains higher for old compared to young. the increase in labour productivity is supported by the decreasing share of employees with the lowest productivity. The share of high-income employees was reduced in the crisis and later mostly low-income employees were hired. In addition, structural changes have accelerated the process of ageing. There are, however, sector-specific differences because in knowledge intensive services, ageing is not as prevalent as in industry. We also show that labour productivity is higher in the youngest quartile than in the oldest quartile of enterprises in all four periods.
    Keywords: productivity, labour productivity, ageing, Estonia
    JEL: J23 J24 J31 J63 M51
    Date: 2017
  12. By: Sotiris Blanas
    Abstract: This paper is the first to study the impact of offshoring on the age-skill composition of labour demand. In doing so, it provides novel empirical evidence firmly supporting the argument that the age profile of a worker is at least as crucial a criterion as the skill to be taken into account by firms while they make optimal labour utilisation adjustments through offshoring. The analysis is conducted on a sample of manufacturing and service industries in 12 developed countries for the period 1995-2005. Its main findings are that material and service offshoring to high-income countries decrease the relative demands for older more skilled workers, while they increase the relative demands for the youngest less skilled. In addition, material and service offshoring to low/middle-income countries decrease the relative demands for the youngest workers, while they mostly increase the relative demands for older workers. These findings are explained by the relative abundance of offshoring destinations in skills and in aspects of employment associated with workers' age profiles, such as the level of human capital and expertise, the returns to training and the level of employment protection.
    Keywords: offshoring, relaitve labour demand, age-skill profile
    JEL: F14 F16 J21 J23 J24 J31
    Date: 2017

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