nep-age New Economics Papers
on Economics of Ageing
Issue of 2018‒05‒07
nine papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Individual and Contextual Factors on Meal Patterns among Older Adults in Paris and the Inner Suburbs By Coline Ferrant; Philippe Cardon; Pierre Chauvin
  2. Theoretical considerations on the retirement consumption puzzle and the optimal age of retirement By Nicolas Drouhin
  3. The Future Prospect of the Long-term Care Insurance in Japan By Ryuta Ray Kato
  4. Cognition, optimism and the formation of age-dependent survival beliefs By Grevenbrock, Nils; Groneck, Max; Ludwig, Alexander; Zimper, Alexander
  5. Evaluating welfare and economic effects of raised fertility By Krzysztof Makarski; Joanna Tyrowicz; Magda Malec
  6. Idiosyncratic risk, aggregate risk, and the welfare effects of social security By Harenberg, Daniel; Ludwig, Alexander
  7. A new inference strategy for general population mortality tables By Alexandre Boumezoued; Marc Hoffmann; Paulien Jeunesse
  8. The labor supply of baby-boomers and low-flation By Benoit Mojon; Xavier Ragot
  9. Does More Female Labor Supply Really Save a Graying Japan? By Ryuta Ray Kato

  1. By: Coline Ferrant (Observatoire sociologique du changement); Philippe Cardon (Université Lille 3 Charles-de-Gaulle - Sciences humaines et sociales); Pierre Chauvin (Institut National de la Santé et de la Recherche Médicale)
    Abstract: In this paper, we ask: How does social isolation shape dietary patterns among older adults? Specifically, we investigate individual and contextual factors on the daily regularity and frequency of meals among adults who are aged 60 and more, retired, and living in Paris and the inner suburbs. The analysis yields three takeaways: 1. Meal frequency may be a valid indicator of nutrition risks among older adults in Paris and the inner suburbs, while meal regularity may be not. 2. Studying dietary patterns among older adults needs handling diverse measures of social isolation, especially differentiating objective and subjective factors. 3. Food access has insignificant effects on meal patterns among older adults in Paris and the inner suburbs.
    Keywords: Older adults; Social isolation; Neighborhood effects; Food deserts
    Date: 2018–03
  2. By: Nicolas Drouhin (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique, ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay)
    Abstract: Defining retirement as a discontinuity in the labor supply of the agent, this paper resolves the retirement consumption puzzle in a very general model of in-tertemporal choice of consumption and savings of a fully rational, forward looking, agent. Building on a specific version of Bellman (1957) principle of optimality, it provides a very general and parsimonious formula for determining the optimal age of retirement taking into account the possible discontinuity of the optimal consumption profile at the age of retirement. Code JEL: C61 D91 J26
    Keywords: life cycle theory of consumption and saving,optimal retirement,retirement consumption puzzle,discontinuous optimal control
    Date: 2018–04–15
  3. By: Ryuta Ray Kato (International University of Japan)
    Abstract: This paper explores the impact of population aging on the Japanese public longterm care insurnace (LTCI) within a numerical dynamic general equilibrium model with multiple overlapping generations. The impact of three policy options, such as an increase in co-payments, an earlier starting age of contribution, and more distribution of the cost to the public sector, is also examined. The numerial results show that in the next about forty years the burdens on the first (age 65 and over) and second (age 40 to 64) groups become more than 1.7 times and more than 2.7 times as much, respectively. A relatively more increase in the burdens on the second group cannot be avaiodable, even if adjustment of the cost distribution between both groups is made every three years in the future in accordance with the schedule by the MHLW. Furthermore, in order to reduce future burdens in the LTCI, an increase in co-payments is most preferable, rather than an earlier starting age of contribution in longer duration of contribution with lower burdens every year, or a shift of the cost to the public sector followed by a very higher consumption tax.
    Keywords: Long-term Care Insurance, Population Aging, Japan, Simulation
    JEL: C68 H51 E62 H55 J16
    Date: 2017–10
  4. By: Grevenbrock, Nils; Groneck, Max; Ludwig, Alexander; Zimper, Alexander
    Abstract: This paper investigates the roles psychological biases play in empirically estimated deviations between subjective survival beliefs (SSBs) and objective survival probabilities (OSPs). We model deviations between SSBs and OSPs through age-dependent inverse S-shaped probability weighting functions (PWFs), as documented in experimental prospect theory. Our estimates suggest that the implied measures for cognitive weakness, likelihood insensitivity, and those for motivational biases, relative pessimism, increase with age. We document that direct measures of cognitive weakness and motivational attitudes share these trends. Our regression analyses confirm that these factors play strong quantitative roles in the formation of subjective survival beliefs. In particular, cognitive weakness is an increasingly important contributor to the overestimation of survival chances in old age.
    Keywords: Subjective Survival Beliefs,Probability Weighting Function,Confirmatory Bias,Cognition,Optimism
    JEL: D12 D83 I10
    Date: 2018
  5. By: Krzysztof Makarski (Narodowy Bank Polski; Warsaw School Economics; Group for Research in Applied Economics (GRAPE)); Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw; Institut für Arbeitsrecht und Arbeitsbeziehungen in der Europäischen Union (IAAEU); Institute of Labor Economics (IZA)); Magda Malec (Group for Research in Applied Economics (GRAPE); Warsaw School of Economics)
    Abstract: In the context of the second demographic transition, many countries consider rising fertility through pro-family polices as a potentially viable solution to the fiscal pressure stemming from longevity. However, an increased number of births implies private and immediate costs, whereas the gains are not likely to surface until later and appear via internalizing the public benefits of younger and larger population. Hence, quantification of the net effects remains a challenge. We propose using an overlapping generations model with a rich family structure to quantify the effects of increased birth rates. We analyze the overall macroeconomic and welfare effects as well as the distribution of these effects across cohorts and study the sensitivity of the final effects to the assumed target value and path of increased fertility. We find that fiscal effects are positive but, even in the case of relatively large fertility increase, they are small. The sign and the size of both welfare and fiscal effects depend substantially on the patterns of increased fertility: if increased fertility occurs via lower childlessness, the fiscal effects are smaller and welfare effects are more likely to be negative than in the case of the intensive margin adjustments.
    Keywords: fertility, welfare, natalistic policies, overlapping generations model
    JEL: H55 E17 C60 C68 E21 D63
    Date: 2018
  6. By: Harenberg, Daniel; Ludwig, Alexander
    Abstract: We ask whether a pay-as-you-go financed social security system is welfare improving in an economy with idiosyncratic productivity and aggregate business cycle risk. We show analytically that the whole welfare benefit from joint insurance against both risks is greater than the sum of benefits from insurance against the isolated risk components. One reason is the convexity of the welfare gain in total risk. The other reason is a direct risk interaction which amplifies the utility losses from consumption risk. We proceed with a quantitative evaluation of social security's welfare effects. We find that introducing an unconditional minimum pension leads to substantial welfare gains in expectation, even net of the welfare losses from crowding out. About 60% of the welfare gains would be missing when simply summing up the isolated benefits.
    Keywords: social security,idiosyncratic risk,aggregate risk,welfare
    JEL: C68 E27 E62 G12 H55
    Date: 2018
  7. By: Alexandre Boumezoued (R&D, Milliman, Paris - Milliman); Marc Hoffmann (CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique); Paulien Jeunesse (CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We propose a new inference strategy for general population mortality tables based on annual population and death estimates, completed by monthly birth counts. We rely on a deterministic population dynamics model and establish formulas that links the death rates to be estimated with the observables at hand. The inference algorithm takes the form of a recursive and implicit scheme for computing death rate estimates. This paper demonstrates both theoretically and numerically the efficiency of using additional monthly birth counts for appropriately computing annual mortality tables. As a main result, the improved mortality estimators show better features, including the fact that previous anomalies in the form of isolated cohort effects disappear, which confirms from a mathematical perspective the previous contributions by Richards (2008), Cairns et al. (2016) and Boumezoued (2016).
    Keywords: Mortality tables,general population,statistical inference,population dynamics,cohort effect
    Date: 2018–04–23
  8. By: Benoit Mojon (Centre de recherche de la Banque de France); Xavier Ragot (Observatoire français des conjonctures économiques)
    Abstract: Why is wage inflation so weak in spite of the recent sharp reduction in unemployment? We show that this may be due to an ongoing major positive labor supply shock. Indeed, the participation rate of workers aged between 55 and 64 has increased steadily over the last decade, from a third to above a half on average across OECD countries. This is most likely the consequence of aging and the reform of pensions. We show that the participation rate of workers aged 55 to 64 contributes to explain why wage inflation has remained weak over the last five years. For instance, it accounts for as much as -1% of wage inflation per annum in Germany since 2013. Our second result is that Phillips curves are alive and well. Wage inflation remains highly responsive to domestic unemployment rates, including after the Great Recession.
    Keywords: Monetary policy; Wages; Compensation; Labor costs
    JEL: E5 J3
    Date: 2018–01
  9. By: Ryuta Ray Kato (International University of Japan)
    Abstract: This paper examines the impact of stimulated female labor supply on the Japanese economy as well as the government fiscal imbalance within a numerical dynamic general equilibrium model with multiple overlapping generations, particularly by paying attention to females' time costs of child rearing and elderly care in a graying Japan. Several numerical results indicate that even complete elimination of females' time costs of child rearing and elderly care stimulates the total GDP only by 1 percent. If complete elimination of time costs occurs in accordance with no gender gap in wage profiles, then the total GDP expands by 4 percent. The results also suggest importance of government policies not only to stimulate female labor force participation but also to improve human capital accumulation of females to reduce a gender gap in wage profiles.
    Keywords: Female Labor Supply, Childcare, Child Allowance, Elderly Care, Public Pension, Long-Term Care Insurance, Population Aging, Japan, Simulation
    JEL: C68 H51 E62 H55 J16
    Date: 2017–09

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