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on Economics of Ageing |
| By: | KLIMAVICIUTE Jutina, (Université de Liège); ONDER Harun, (World Bank); PESTIEAU, Pierre, (Université de LIège, CORE, and PSE) |
| Abstract: | The role of inherited wealth in modern economies has increasingly come under scrutiny. This study presents one of the first attempts to shed light on how demographic aging could shape this role. It shows that, in the absence of retirement annuities, or for a given level of annuitization, both increasing longevity and decreasing fertility should reduce the inherited share of total wealth in a given economy. Thus, aging is not likely to explain a recent surge in this share in some advanced economies. Shrinking retirement annuities, however could offset and potentially reverse these effects. The paper also shows that individual bequests will be more unequally distributed if aging is driven by a drop in fertility. In comparison, the effect of increasing longevity on their distribution is non-monotonic. |
| Keywords: | inherited wealth, inheritance, aging, inequality, social security |
| JEL: | D14 D31 D64 D91 E21 H55 J11 |
| Date: | 2018–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2018008&r=age |
| By: | Kyureghian, Gayaneh; Soler, Louis-Georges |
| Abstract: | Over the next few decades, the share of the elderly population in France will increase steadily. There is concern that aging households cannot maintain the pre-retirement level of consumption. Although there is empirical evidence that the expenditure on non-durables decreases as households age, there does not seem to be any evidence whether the quantity, consumed decreases in France. Our results indicate that although food prices and expenditures decline, the home food consumption does not. In fact it increases in all age groups after the late forties. |
| Keywords: | Consumer/Household Economics, Demand and Price Analysis |
| Date: | 2017–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae17:260920&r=age |
| By: | Amalina Azmi; Nur Hafizah Juhari; Nurhayati Md Khair; Puteri Ameera Men Khan; Sheelah Sivanatha |
| Abstract: | The world is ageing and so does Asia countries, which ageing even faster including Malaysia. Malaysia is predicted to become an aging nation by the year of 2030. Most of the elderly prefer to age in place. Besides, less elderly lives with their children thus placing them in an independent living. The death of the spouse could also put the elderly in the same situation. Housing is a basic human need. It is believed that human must have a home before they can think about anything else. Furthermore, housing can be a major indicator of well-being for persons of all ages from all backgrounds including the elderly. However, homes sometimes can be a death trap for the elderly. They tend to trip, slip and fall in their home as they are becoming frail and fragile as time goes by. Meantime, the elderly tends to feel isolated from the community and lead them to loneliness.In the context of increasing elderly populations, there is concern that issues relating to provide housing attributes that can assist the elderly to age in place. With respect to that, this research aims to identify the appropriate housing attributes for the elderly to age in place. Together in this research, researcher will be focusing on the apartments and condominiums. Through this research, Malaysian Standard MS1184:2004 and Sri Seronok Retirement Village are the benchmark to other 4 case studies within Klang Valley which are occupied by elderly who wish to age in place. |
| Keywords: | Aging in Place; Elderly; Klang Valley; Strata Housing |
| JEL: | R3 |
| Date: | 2018–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2018_25&r=age |
| By: | Matthew S. Rutledge |
| Abstract: | Over the last half-century, average life expectancy at age 65 in the United States has increased by six years for men and four years for women. But these gains have been unequal across the population. While those with greater earnings and education have enjoyed substantially longer life spans, those with lower socioeconomic status (SES) have seen relatively small improvements in their late-life mortality. The unequal increase in life expectancy works against the progressive benefit design of Social Security. The program is set up to award more generous benefits – relative to pre-retirement earnings – to lower earners. But, due to the gap in life expectancy by SES, lower earners receive their benefits for relatively fewer years than their longer-lived counterparts. This brief reviews research by the Social Security Administration’s Retirement Research Consortium and others that investigates this widening gap and examines its consequences. The discussion proceeds as follows. The first section quantifies the growing gap in life expectancy by SES. The second section reviews evidence on why the gap has widened. The third section discusses how the gap affects lifetime Social Security benefits and the progressivity of the system. The final section concludes that, over time, the increasing mortality gap has significantly reduced Social Security’s progressivity |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2018-16&r=age |
| By: | UNAYAMA Takashi; OHNO Taro |
| Abstract: | Following the methodology developed in our previous papers (Unayama and Ohno, 2017a and 2017b), we construct household income and expenditure data that are consistent with macro data, or national accounts, yet are based on micro data. We improve the methodology and update to the latest data of the 2014 National Survey of Family Income and Expenditure (NSFIE). According to the constructed data, the decreasing trend in the macro savings rate has been induced by the elderly. We further observe that while consumption has been stable over birth cohorts, disposable income has become lower for later generations. This trend was brought by the lower interest income associated with the zero interest policy and the lower public pension income. Since the lower public pension benefits are a result of population aging given the pay-as-you-go finance system, the lower savings rate is regarded as a result of population aging. |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:18024&r=age |
| By: | Joanna Tyrowicz (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University); Krzysztof Makarsk (Warsaw School of Economics); Marcin Bielecki (University of Warsaw) |
| Abstract: | We analyze the consumption and wealth inequality in an OLG model with mandatory pension systems. Our framework features within cohort heterogeneity of endowments and heterogeneity of preferences. We allow for population aging and gradual decline in TFP growth. We show four main results. First, increasing longevity translates to substantial increases in aggregate consumption inequality and wealth inequality. Second, a pension system reform from a defined benefit to a defined contribution works to reinforce consump- tion inequality and reduce wealth inequality. Third, minimum pension benefits are able to partially counteract an increase in inequality introduced by the defined contribution system, at a fiscal cost. Fourth the minimum pension benefit guarantee mostly addresses the sources of inequality which stem from differentiated endowments rather than those which stem from heterogeneous preferences. |
| Keywords: | consumption, wealth, inequality, longevity, defined contribution, defined benefit |
| JEL: | H55 E17 C60 C68 E21 D63 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201808&r=age |
| By: | April Yanyuan Wu; Jody Schimmel Hyde |
| Abstract: | We use the Health and Retirement Study (HRS) linked to Social Security Administration (SSA) records to compare the postretirement financial well-being of workers who experienced disability onset during their working years with those who did not, based on their claiming behavior for Social Security disability and retirement benefits. |
| Keywords: | disability, retirement, financial security, Social Security, DI, OASI |
| JEL: | I J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:8b1937be4e604c608f576c9bbe3d9728&r=age |
| By: | Richard Rogerson (Princeton University); Johanna Wallenius (Stockholm School of Economics) |
| Abstract: | Using the Consumption Activities Mail Survey (CAMS) module in the HRS we document how time allocations change for individuals within a household when one or more members transitions from full time work to not working. Our basic finding is that the ratio of home production to leisure time is approximately constant for both family members. We then build a model of household labor supply to understand the implications of this finding for preferences and the home production function. We conclude that this fact suggests a relatively large elasticity of substitution between the leisure of the two members. For commonly used preference specifications, this also implies a large (i.e., greater than one) intertemporal elasticity of substitution for leisure. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:90&r=age |
| By: | Libertad González; Ana Rodriguez-Gonzalez |
| Abstract: | We analyze the evolution of inequality in mortality in Spain during 1990-2014. We focus on age-specific mortality and consider inequality across narrowly defined geographical areas, ranked by average socioeconomic status. We find substantial decreases in mortality over the past 25 years for all age groups, which were particularly pronounced for men, resulting in a sizeable reduction in the gender gap in mortality. Inequality in mortality also decreased during this period, including during the recent recession, so that by the 2010’s mortality presents a flat socioeconomic gradient for most age groups. Compared to the US and Canada, decreases in mortality have been larger in Spain, and inequality is the lowest of the three countries. We find essentially no change in inequality among the elderly, in contrast to the increase found in the US. |
| Keywords: | mortality, Inequality, Health |
| JEL: | J11 I14 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1050&r=age |
| By: | KLIMAVICIUTE Justina, (Université de Liège); PESTIEAU Pierre, (Université de Liège, CORE and Paris School of Economics); SCHOENMAECKERS Jérôme, (Université de Liège) |
| Abstract: | The aim of this paper is to analyze long-term care (LTC) insurance purchase decisions when parents expect to receive assistance from altruistic children. We first propose a simple theoretical model in which we show that the effect of children's altruism on parents' insurance decision is ambiguous and depends on a number of factors: the degree of substitutability between informal and formal care, the degree of parental altruism and the concavity of the utility functions. We then run an empirical test using data from the US, France, Spain, Germany and Israel. We find that the effect of children's altruism is negative in the US and Israel, but not significant in France, Germany and Spain, which possibly suggests that the different forces identified in the theoretical model are offsetting each other. |
| Keywords: | long-term care insurance, altruism, informal care |
| JEL: | D64 I13 J14 |
| Date: | 2018–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2018017&r=age |
| By: | KLIMAVICIUTE Justina, (Université de Liège); PESTIEAU Pierre, (Université de Liège, CORE, Université catholique de Louvain, and Paris School of Economics); SCHOENMAECKERS Jérôme, (Université de Liège) |
| Abstract: | This paper studies long-term care (LTC) insurance in the presence of family altruism. In the first, theoretical, part of the paper, we explore whether and how family solidarity affects the application to LTC of Arrow’s (1963) theorem of the deductible, which is shown to apply in models without family by a number of papers. We consider two tyes of family altruism, perfect and imperfect, and find that Arrow’s theorem generally holds, even though some departures from the standard model and some differences between the types of altruism exist. Oour analysis highlights a complex interplay between parents’ insurance and their children’s aid, which implies that a number of intuitive conjectures are not always verified. For instance, while one would expect the deductible to be increasing in the child’s degree of altruism, this is unambiguously verified only under certain conditions. Given the ambiguity of some results, in the second part of the paper, we resort, more generally, to an empirical test of the relation between LTC insurance and children’s altruism using the data from the Health and Retirement Study (HRS). Our findings suggest that children’s altruism has a negative impact on parents’ LTC insurance purchases, even though some results also point to this relationship being more complex than one might think. |
| Keywords: | long-term care insurance, deductible theorem, alturism, family aid |
| JEL: | D64 I13 J14 |
| Date: | 2018–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2018011&r=age |
| By: | Marta Lachowska (W.E. Upjohn Institute for Employment Research); Michal Myck (Centre for Economic Analysis) |
| Keywords: | retirement, pensions, Poland, savings |
| JEL: | D14 E21 H55 I38 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:ml18&r=age |