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on Economics of Ageing |
| By: | Fedor Iskhakov; Michael Keane |
| Abstract: | In this paper we structurally estimate a life-cycle model of consumption/savings, labor supply and retirement, using data from the Australian HILDA panel. We use the model to evaluate effects of the Australian aged pension system and tax policy on labor supply, consumption and retirement decisions. Our model accounts for human capital accumulation via learning by doing, as well as wealth accumulation and decumulation over the life cycle, uninsurable wage risk, credit constraints, a non-absorbing retirement decision, and labor market frictions. We account for the ’bunching’ of hours by discretizing job offers into several hours levels, allowing us to investigate labor supply on both intensive and extensive margins. Our model allows us to quantify the effects of anticipated and unanticipated tax and pension policy changes at different points of the life cycle. Our results imply that the Australian Aged Pension system as currently designed is very poorly targeted, so that means testing and other program rules could be improved. |
| Keywords: | Labor supply, human capital accumulation, retirement, pensions, taxes, struc-tural model, anticipated and unanticipated policy changes, counterfactual simulations |
| JEL: | J22 J24 J26 C63 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2018-661&r=age |
| By: | Grégory Ponthière (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12) |
| Abstract: | The retirement system is usually regarded as giving a fair reward for a long life of labor. However, the fairness of that system can be questioned, on the grounds that only workers who have a su¢ ciently long life benefit from that reward, but not workers who die prematurely. In order to reexamine the fairness of retirement systems under unequal lifetime, this paper compares standard retirement (i.e. individuals work before being retired) with - purely hypothetical - reverse retirement (i.e. individuals are retired before working). We first show that, whereas reverse retirement cannot be a social optimum under the utilitarian criterion (unlike standard retirement), reverse retirement can be optimal under the ex post egalitarian criterion (giving priority to the worst-o¤ in realized terms). From an ex post egalitarian perspective, reverse retirement dominates standard retirement in economies with high life expectancy and a flat age-productivity profile, whereas the opposite holds in less developed economies. |
| Keywords: | mortality,fairness,retirement,life cycle |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01789651&r=age |
| By: | Mikael Juselius; Előd Takáts |
| Abstract: | Demographic shifts, such as population ageing, have been suggested as possible explanations for the past decade's low inflation. We exploit cross-country variation in a long panel to identify age structure effects in inflation, controlling for standard monetary factors. A robust relationship emerges that accords with the lifecycle hypothesis. That is, inflationary pressure rises when the share of dependants increases and, conversely, subsides when the share of working age population increases. This relationship accounts for the bulk of trend inflation, for instance, about 7 percentage points of US disinflation since the 1980s. It predicts rising inflation over the coming decades. |
| Keywords: | demography, ageing, inflation, monetary policy |
| JEL: | E31 E52 J11 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:722&r=age |
| By: | Massimo Baldini; Giulia Mancini; Giovanni Vecchi |
| Abstract: | The paper explores the changing risk of poverty for older and younger generations of Italians throughout the republican period, 1948 to the present day. We show that poverty rates have decreased steadily for all age groups, but that youth has been left behind. The risk of poverty for children aged 0-17, relative to adults over 65, has increased steadily over time: in 1977, children faced a risk of poverty 30 percent lower than the elderly, but by 2016 they are 5 times likelier to be poor than someone in the age range of their grandparents. This intergenerational reversal of fortune is unprecedented in Italy’s post-WW2 history. We also assess the impact of the Great Recession on living standards by age, finding that the young have been hit hardest, particularly in Southern regions. What explains the extra poverty risk associated with young age? Our analysis points to the welfare state, which offers better protection for the elderly than it does for the young and their families. We find that the impact of cash transfers on the incidence of child poverty is considerably lower in Italy than in most comparable countries. Overall, in the last seven decades, Italy has become no country for young people. |
| Keywords: | age, cash transfers, Great Recession, living conditions, poverty, wellbeing |
| JEL: | C42 D31 I32 N30 |
| Date: | 2018–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:hbu:wpaper:9&r=age |
| By: | Holzmann, Robert (University of New South Wales); Wels, Jacques (University of Cambridge) |
| Abstract: | The importance of cross-border portability of social benefits is increasing in parallel with the rise in the absolute number of international migrants and their share of the world population, and perhaps more importantly, with the rising share of world population that for some part of their life is working and/or retiring abroad. This paper estimates how the rising stock of migrants is distributed over four key portability regimes: those with portability through bilateral social security arrangements (regime I); those with potential exportability of eligible benefits from abroad (regime II); documented workers with no access to national schemes but no contribution payment either (regime III); and undocumented workers with no access to any scheme (regime IV). Estimates for 2000 and 2013 are compared. The results indicate a modest but noticeable increase in the share of migrants under regime I, from 21.9 percent in 2000 to 23.3 percent in 2013. The biggest change occurred under regime III, which almost doubled to 9.4 percent. Regime II reduced by 3.0 percentage points but remains the dominant scheme (at 53.2 percent). The estimates suggest that the scope of regime IV (informality) reduced by 2.9 percentage points, accounting for 14.0 of all migrants in 2013. This trend is positive, but more will need to be done to progress on benefit portability. |
| Keywords: | labor mobility, retirement mobility, portability regimes, bilateral social security agreements, social benefits |
| JEL: | D69 H55 I19 J62 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11481&r=age |
| By: | Makaretseva, Alla (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Khasanova, Ramilya (Russian Presidential Academy of National Economy and Public Administration (RANEPA)) |
| Abstract: | Over the past 16 years, Russia has experienced the following trends in the process of mortality. The life expectancy of the Russian population is growing, but the growth rate is low. For 2000-2016 the life expectancy of the population increased by 6.6 years (by 4.8 years for women, 7.5 years for men) and was 71.9 years (men - 66.5 years, women - 77 years ), it is still 6 years lower than the average in developed countries. The gap in life expectancy between men and women in Russia still remains one of the highest in the world, and by 2016 is 10.5 years (in 2000 - 13 years). There is still a high regional differentiation of life expectancy: 16 years - between the highest and the lowest regional level of life expectancy in 2016. For 2000-2016, the infant mortality rate decreased by 60% (from 15.3 per mille to 6), but the relative lag of Russia from other developed countries remains. Similarly, infant mortality in Russia is characterized by a large gap in the indicators of rural and urban areas and significant regional differentiation. Mortality of the working-age population declines slowly and remains very high in comparison with Western countries. Today the question of finding ways to equalize the levels of demographic and socio-economic development of regions and create prerequisites for stabilizing the demographic situation in Russia as a whole and in regions where a steady decline in population is observed today is urgent. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:041830&r=age |
| By: | Theis Theisen |
| Abstract: | When individuals are ageing, they may lose some of their functional abilities. This may have important consequences for their optimal form of housing arrangement. We set up a theoretical model for the optimal choice of housing in the later part of life. In the empirical part of the paper we estimate a multinomial logit model for choice of housing. Four modes of housing are distinguished: ordinary private housing, specially designed private housing, sheltered dwellings, and nursing homes. The model is estimated from a nation-wide Norwegian sample containing all individuals who have had some problems related to functionality. All households not included in the sample reside in ordinary private dwellings. We find a strong impact of weak functional abilities on the choice of housing, but the capacity of the nursing home sector and specially designed dwellings also plays an important role. Moreover, municipality-specific affects are important. |
| Keywords: | Housing; Nursing Homes; Optimal mod of housing; Sheltered dwellings |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_246&r=age |
| By: | Catalina Amuedo-Dorantes (Department of Economics, San Diego State University); Cristina Borra (University of Seville) |
| Abstract: | The Spanish welfare state was practically inexistent in the 1980s. It expanded throughout the 1990s and became fully in place by the 2000s. At the same time, internal migration rates dropped to less than 0.3 percent –among the lowest in the world. In a country with large labor market imbalances, internal mobility can prove crucial to economic growth. We look at the role that non-contributory pensions might have played on inter-provincial mobility over the past two decades. We find that the expansion of the welfare state has curtailed the mobility of young working-age individuals, especially less educated women. The effects are unique to non-contributory pensions, and are not restricted to cohabitating family members or tied to the care for disabled relatives, signaling the need for policy measures that facilitate the mobility of the young from lower income households. |
| Keywords: | internal migration, labor mobility, welfare benefits |
| JEL: | I38 J61 R23 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1806&r=age |
| By: | Leonardo Villar; David Forrero |
| Abstract: | Para estimular el debate de ideas en la contienda presidencial de 2018, Fedesarrollo lideró la elaboración de varios documentos con propuestas de política pública en áreas críticas para el desarrollo económico y social del país. El documento de Villar y Forero presenta una propuesta integral de reforma del sistema de protección económica de la vejez en Colombia, encaminada a corregir sus graves deficiencias y enormes costos fiscales. Los autores proponen un régimen pensional de pilares complementarios. El pilar público administrado por Colpensiones captaría cotizaciones de todos los trabajadores por lo correspondiente a un salario mínimo. Garantizaría además que todos los que cumplan condiciones de pensión obtengan al menos un salario mínimo, lo cual requiere de subsidios estatales, tal como sucede en la actualidad. Para evitar el otorgamiento de subsidios a pensionados de altos ingresos, la propuesta plantea un esquema que reduce gradualmente el subsidio otorgado por Colpensiones a medida que aumenta el ahorro del afiliado en el pilar privado, de capitalización individual. Este segundo pilar recibiría las contribuciones en exceso de un salario mínimo para ahorrarlas en su cuenta individual y complementaría la pensión básica del pilar público con beneficios proporcionales a su ahorro. El diseño propuesto focaliza los subsidios en la población de menores ingresos y reduce los costos fiscales del sistema. En lo que se refiere a las personas que no alcanzan a cumplir las condiciones para obtener una pensión, los autores proponen ajustar el sistema no contributivo de apoyo económico a la vejez, a través de una expansión sustancial del alcance y los beneficios del programa Colombia Mayor. Presentan además propuestas audaces para fortalecer el esquema de beneficios económicos periódicos (BEPS) y potenciarlo como mecanismo integrador del sistema pensional contributivo con los sistemas de apoyo económico para la vejez de los trabajadores informales. |
| Keywords: | Sistema de Protección Social, Pensiones de Jubilación, Reforma Pensional, Beneficios Económicos Periódicos - BEPS, Subsidios de Vejez, Política Pública, Desarrollo Económico y Social, Vejez, Costos Fiscales, Colombia |
| Date: | 2018–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:col:000439:016253&r=age |