nep-age New Economics Papers
on Economics of Ageing
Issue of 2018‒01‒15
nine papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Employment and Substitution Effects of Raising the Statutory Eligibility Age in France By Simon Rabaté; Julie Rochut
  2. Collateral effects of a pension reform in France By Hélène Blake; Clémentine Garrouste
  3. Redistributive Consequences of Abolishing Uniform Contribution Policies in Pension Funds By Chen, Damiaan; van Wijnbergen, Sweder
  4. Evolutions démographiques et marché de l’immobilier neuf By Hippolyte D’Albis; Elodie Djemai
  5. European Pension System: Bismarck or Beveridge? By J. Ignacio Conde-Ruiz; Clara I. González
  6. Long-Term Care Insurance: Knowledge Barriers, Risk Perception and Adverse Selection By Martin Boyer; Philippe De Donder; Claude-Denys Fluet; Marie-Louise Leroux; Pierre-Carl Michaud
  7. An overlapping generations model for monetary policy analysis By Samuel Huber; Jaehong Kim
  8. Age and Education in the Russian Labour Market Equation By Gimpelson, Vladimir; Kapeliushnikov, Rostislav
  9. El emprendimiento sénior: Marco conceptual y evidencia empírica By Velilla, Jorge; Sánchez Gracia, Rebeca

  1. By: Simon Rabaté (PSE - Paris School of Economics, ENS Paris - École normale supérieure - Paris); Julie Rochut (CNAV - CNAV - CNAV, RITM - Réseaux Innovation Territoires et Mondialisation - UP11 - Université Paris-Sud - Paris 11)
    Abstract: Increasing the minimum retirement age is a widespread option chosen by policy makers to reduce spending in financially constrained public pension systems. Yet the effectiveness of such a reform strongly depends on the ability of the impacted individuals to postpone their withdrawal from the labor force. In this paper, we evaluate the effects of the 2010 French pension reform that increased the statutory eligibility age of retirement from 60 to 62. To do so, we use a differences-in-differences methodology, comparing the trajectories from work to retirement for succeeding generations facing a different statutory age. Using a detailed social security administrative database, we provide a global assessment of the effects of the reform, accounting for the potential substitution effects from old-age insurance towards unemployment, sickness or disability insurance schemes. Our findings suggest that despite a sizable effect on the employment rate, the reform also strongly in- creased unemployment and disability rates. These substitution effects largely reduce the impact of the reform: our estimates suggest that around one fifth in the decrease in public spending is offset by increasing expenses in other public insurance schemes.
    Keywords: Retirement age, Policy reform, Labor supply, Disability,Unemployment
    Date: 2017–10
  2. By: Hélène Blake (PSE - Paris School of Economics); Clémentine Garrouste (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)
    Abstract: How does the retirement age affect the physical and mental health of seniors? We identify this effect based on the 1993 reform of the French pension system, which was heterogeneously introduced among the population. With each cohort, the French government gradually increased the incentive to work using two tools: the contribution period required for entitlement to a full pension and the number of reference earning years taken to calculate pensions. We use a unique database on health and employment in France in 1999 and 2005, when the cohorts affected by the reform started to retire. A difference-in-differences approach, with the control group comprising public sector employees (not concerned by the 1993 reform), finds that the people more affected by the reform, and hence with a stronger incentive to work, were those posting less of an improvement and even a deterioration in their health between 1999 and 2005. Subsequently, taking the reform as a tool to filter out the potential influence of health on employment choices, we show that retirement improves physical and social health. The more physically impacted are the low-educated individuals.
    Keywords: Retirement,Health,Pension Reform
    Date: 2017
  3. By: Chen, Damiaan; van Wijnbergen, Sweder
    Abstract: Abstract In a pension system with uniform policies for contribution and accrual, each participant has the same contribution rate and accrual rate independent of the age at the time of payment. This is not actuarially fair because the investment horizon of young participants is longer than the investment horizon of the elderly. This paper shows the presumably unintended redistributive effects of a uniform contribution system and the consequences of switching from uniform policies to an actuarially fair system. We first analyze a stylized model with three overlapping generations to show the intuition behind these effects. Then, we quantify these effects in a more detailed model with multiple overlapping generations, realistic parameters and more detailed information on the income distribution, calibrated on the Dutch funded pension system. We first use this model to show that there is a substantial transfer of income from poor to wealthy participants under a pension scheme with uniform policies: about 10 billion euros are transferred from poor to wealthy participants under the current uniform contribution policies in the Netherlands. We then calculate the gross aggregate transition effect of abolishing the uniform policy pension for an actuarially fair system to be about 37 billion euros (or about 5% of the Dutch GDP). We discuss the four main drivers of this estimate of the transition effect. For each cohort, the redistributive effects are less than 5% of their total pension.
    Keywords: Income inequality; pension funds; transition; uniform contribution policies
    JEL: G23 J32
    Date: 2017–12
  4. By: Hippolyte D’Albis (Paris School of Economics - CNRS); Elodie Djemai (PSL, Université Paris-Dauphine, LEDa, UMR DIAL)
    Abstract: Cet article utilise les Enquêtes Logement réalisées de 1973 à 2013 et analyse les effets démographiques sur la dynamique du marché de l’immobilier neuf en France métropolitaine, ainsi qu’en Ile-de-France, Provence-Alpes-Côte d’Azur, dans les régions littorales et dans les régions enclavées. Le calcul des fréquences d’acquisition d’un logement neuf au titre de la résidence principale par âge permet de souligner les effets comportementaux et les effets démographiques (en distinguant taille de la population et structure par âge) sur la dynamique du marché. L’article analyse l’impact du vieillissement de la population et propose des projections relatives aux besoins de construction d’ici 2060. Alors que l’évolution de taille de la population a été favorable aux acquisitions sur l’ensemble de la période étudiée, la structure par âge devient défavorable dès le début des années 1990. La décomposition révèle des effets très spécifiques aux régions étudiées._ENGLISH_ Using household survey data from the “Enquêtes Logement” collected from 1973 to 2013, this article studies the effects of demography on the new-build housing market dynamics in France, as well as in the Paris Region, Provence-Alpes-Côte d’Azur, and in coastal regions and in landlocked regions. After computing how frequently individuals buy a new-build house for their primary residence by age, the effects of behavioral changes and demographic changes (population size and age structure) on the market dynamics are evaluated. The article analyzes the impact of population ageing and provides projections on the needs for home construction by 2060. Results suggest that while the changes in population size are in favor of acquisitions all the period long, the age structure becomes an adverse factor from the beginning of the nineties onwards. The decomposition shows that these effects are region-specific.
    Keywords: Marché de l’immobilier neuf, Projections démographiques, Résidence principale, Vieillissement, New-build housing market, Demographic projections, Primary Residence, Ageing
    JEL: R21 J11 R10
    Date: 2017–11
  5. By: J. Ignacio Conde-Ruiz; Clara I. González
    Abstract: The aging process faced by the countries of the European Union is leading them to introduce reforms in their public pension systems. One way to interpret these reforms is to think about them as changes in the intergenerational pact to make the system sustainable over time. In addition to intergenerational redistribution, pay-as-you-go pension systems allow intragenerational redistribution. Taking into account this dimension, we can distinguish between contributory (or Bismarckian) pay-as-you-go systems and pure redistributive pension systems (or Beveridge). This article analyzes the origin of these systems and the differences between European pension systems according to this characteristic. In the final part, we reflect on the future model of pensions in the European Union.
    Date: 2018–01
  6. By: Martin Boyer; Philippe De Donder; Claude-Denys Fluet; Marie-Louise Leroux; Pierre-Carl Michaud
    Abstract: We conduct a stated-choice experiment where respondents are asked to rate various insurance products aimed to protect against financial risks associated with long-term care needs. Using exogenous variation in prices from the survey design, and objective risks computed from a dynamic microsimulation model, these stated-choice probabilities are used to predict market equilibrium for long-term care insurance using the framework developped by Einav et al. (2010). We investigate in turn causes for the low observed take-up of long-term care insurance in Canada despite substantial residual out-of-pocket financial risk. We first find that awareness and knowledge of the product is low in the population: 44% of respondents who do not have long-term care insurance were never offered this type of insurance while overall 31% report no knowledge of the product. Although we finnd evidence of adverse selection, results suggest it plays a minimal role in limiting take-up. On the demand side, once respondents have been made aware of the risks, we finnd that demand remains low, in part because of misperceptions of risk, lack of bequest motive and home ownership which may act as a substitute.
    Keywords: Long-term care insurance, adverse selection, stated-preference, Health, Insurance
    Date: 2017
  7. By: Samuel Huber; Jaehong Kim
    Abstract: We integrate an overlapping generations model into a new monetarist framework and show that the Friedman rule is not optimal. This is because inflation makes saving for retirement less attractive, such that young agents optimally choose to increase their consumption at the expense of lower savings. On the other hand, old agents consume less due to the inflation tax. We show that for low inflation rates, the former effect dominates the latter, such that the Friedman rule is not optimal. However, this effect disappears for higher inflation rates such that the optimal rate is at an intermediate level.
    Keywords: Overlapping generations, monetary theory, Friedman rule
    JEL: D90 E31 E41 E50
    Date: 2017–12
  8. By: Gimpelson, Vladimir (CLMS, Higher School of Economics, Moscow); Kapeliushnikov, Rostislav (CLMS, Higher School of Economics, Moscow)
    Abstract: This paper deals with age and educational dimensions of the labour supply in Russia and explores two time periods: from 2000 to 2015 (retrospective), and the next 15 years (prospective). For our analysis we exploit the micro-census (2015) data and all LFS waves covering the retrospective period. Combining demographic projections with expected employment rates and data on educational achievement we forecast the employment composition up to 2030. If recent past changes in both age and education have contributed to economic growth, their effect is likely to be negative in the next 15 years. These two dimensions are directly associated with such challenges as ageing and over-education of the labour force. Russia is not unique here, but it is more exposed to both dimensions than are many other countries due to its demographic and educational developments. The paper concludes with several tentative policies that could ease, although not cure, the problem.
    Keywords: over-education, employment, education, age, aging, Russia
    JEL: J11 J21 J24
    Date: 2017–11
  9. By: Velilla, Jorge; Sánchez Gracia, Rebeca
    Abstract: En este trabajo se realiza una revisión de la literatura sobre emprendimiento, mediante la definición y la historia del término “emprendedor”, tanto cronológicamente como desde diferentes campos de estudio, intentando mostrar la importancia de los diferentes usos del término, y dando especial importancia a las características del individuo emprendedor sénior (mayor de 50 años). Posteriormente, usando los datos “Adult Population Survey” del Global Entrepreneurship Monitor para el año 2014, se analiza empíricamente el emprendimiento entre los individuos sénior de países de la OECD. Encontramos que España y Francia muestran los niveles más bajos de emprendimiento sénior, mientras que los más altos se dan en Chile y Méjico. Además, se encuentra que el emprendimiento por oportunidad prevalece sobre el emprendimiento por necesidad entre la población sénior, y también que los factores que impulsan la actividad emprendedora por uno u otro motivo son, en gran medida, diferentes.
    Keywords: Emprendimiento; Emprendimiento sénior; Datos GEM
    JEL: L26
    Date: 2018–01–02

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