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on Economics of Ageing |
| By: | Amparo Nagore García (LISER); Mariacristina Rossi (University of Turin and CeRP-Collegio Carlo Alberto); Arthur van Soest (Tilburg University) |
| Abstract: | We investigate retirement decisions of the self-employed in the Netherlands using administrative data. We focus on the time period around which individuals reach the statutory retirement age (SRA, 65 years in most cases). After the statutory retirement age, each Dutch resident receives the Old Age State Pension annuity (AOW), providing an income at the subsistence level. Both the timing and the magnitude of this state pension are well known in advance. According to a standard leisure/consumption trade-off life cycle model, receiving AOW should therefore have no impact on labour supply choices. While employees often face the demand side restriction of mandatory retirement, this does not apply to the self-employed. We investigate whether retirement and earnings of the selView postf-employed change at the SRA and whether any such changes vary with, e.g., the level of financial wealth. We find a peak in retirement when self-employed reach the SRA. The evidence suggests that the benchmark of retiring at 65 is acting as a driver, due to behavioural features like anchoring or a social norm. |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:182&r=all |
| By: | João Pereira |
| Abstract: | We calibrate an endogenous overlapping generations model of a small open economy to study the effects of population aging and population decline. In an invariant scenario public and foreign debt explode and GDP growth decreases markedly. Among the tested policies to control public nances, the best for the individuals is an increase in the retirement age, which needs to increase 6 years, a similar magnitude as the increase in life expectancy at birth. However, this increase has to happen before the increase in life expectancy materi- alizes itself. Aging has a stronger negative impact on public debt than population decline. We find a positive, but quantitatively modest, behavioral effect in reaction to a higher life expectancy with an impact on the GDP growth rate of only 2 basis points. |
| Keywords: | Open Economy; Time Allocation; PAYG pensions; Debt |
| JEL: | J11 J22 H55 H63 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp0632019&r=all |
| By: | Mårten Palme; Lisa Laun |
| Abstract: | We show how the economic incentives to remain in the labor force induced by Sweden’s public old-age pension system and disability insurance program have changed between 1980 and 2015. Based on earnings histories for different hypothetical individuals corresponding to groups by gender and educational attainments we calculate the following measures: the replacement rate (RR), the social security wealth (SSW), the accrual in the social security wealth from working one additional year as well as the implicit tax rate on working longer (ITAX). We then investigate to what extent the observed changes in these measures concur with changes in employment rates among older workers. |
| JEL: | J14 J21 J22 J26 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25394&r=all |
| By: | Kenjiro Hori (Birkbeck, University of London); Stephen Wright (Birkbeck, University of London) |
| Abstract: | We compute actuarially fair contribution rates (aggregating both employers’ and employees’ contributions) for the USS pension scheme, using UK life tables and market yield curves. The fair rate is sensitive to life expectancy and the level of real yields, neither of which appears stationary. So any scheme predicated on a constant contribution rate is inherently unstable. We therefore argue that, to survive, defined benefit schemes such as USS must explicitly incorporate time variation in contribution rates, ideally along with some dependence on individual characteristics. Our formulae in principle provide an objective, verifiable and implementable methodology to calculate such fair contribution rates. |
| JEL: | J32 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:1901&r=all |
| By: | Zakharenko, Roman |
| Abstract: | The paper explains long-term changes in birth, death rates and attitude to personal consumption by changing patterns of cultural transmission. When communities are culturally isolated, they are focused on population growth, resulting in large fertility and welfare transfers to children, limited adult consumption and lack of old-age support. With increasing cultural contact across communities, successful cultural traits induce their hosts to attempt becoming celebrities by limiting fertility and increasing longevity via higher consumption and old-age arrangements. Empirical analysis confirms that celebrities have fewer children and live longer; their presence precedes reduced aggregate birth and death rates. |
| Keywords: | cultural transmission, celebrity, demographic transition |
| JEL: | J11 J13 J14 Z19 |
| Date: | 2018–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90643&r=all |
| By: | Henry, Carla.; Fraga, Federico.; Yu, Tang. |
| Abstract: | The aim of this paper is to contribute to an understanding of the decisions of the near old and older Chinese to work, and how work characteristics vary across genders, localities, and within overall income and security situations as ageing advances. |
| Keywords: | 1, 2, 3 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:995010393402676&r=all |
| By: | Garbinti, Bertrand; Georges-Kot, Simon |
| Abstract: | This paper provides new insights on the effect of inheritance receipt on retirement. We build on lifelong information on inheritances received and labor market transitions available for respondents of the French Wealth Survey. This feature allows us to compare current retirement rates among current and future inheritors. Chances of current retirement are 40% higher among current inheritors than among individuals who will inherit in the next two years, but there is substantial heterogeneity in this effect across socio-demographic groups. The effect is also stronger for individuals with a higher risk aversion, which we interpret with a simple theoretical model. JEL Classification: J14, J26 |
| Keywords: | inheritance, labor supply, retirement, risk aversion |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20192222&r=all |
| By: | Moser, Christian (Federal Reserve Bank of Minneapolis); Olea de Souza e Silva, Pedro (Uber Technologies) |
| Abstract: | We study optimal savings policies when there is a dual concern about undersaving for retirement and income inequality. Agents differ in present bias and earnings ability, both unobservable to a planner with paternalistic and redistributive motives. We characterize the solution to this two-dimensional screening problem and provide a decentralization using realistic policy instruments: mandatory savings at low incomes but a choice between subsidized savings vehicles at high incomes—resembling Social Security, 401(k), and IRA accounts in the US. Offering more savings choice at higher incomes facilitates redistribution. To solve large-scale versions of this problem numerically, we propose a general, computationally stable, and efficient active-set algorithm. Relative to the current US retirement system, we find significant welfare gains from increasing mandatory savings and limiting savings choice at low incomes. |
| Keywords: | Optimal taxation; Multidimensional screening; Present bias; Preference heterogeneity; Paternalism; Retirement; Savings; Social Security; Active-set algorithm |
| JEL: | E62 H21 H55 |
| Date: | 2019–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmoi:0017&r=all |
| By: | Ibrahim Al Hawarin (Al-Hussein Bin Talal University); Irène Selwaness |
| Abstract: | Jordan has undergone a profound social security reform since 2010, primarily aiming to ensure the financial sustainability of the system over time. The reform measures mainly included increasing the age of early retirement and the minimum contributions required to claim it, increasing employee and employer monthly contributions, covering even micro firms (with at least one employee), and allowing the self-employed and inactive housewives to voluntarily participate. Using data from the 2010 and 2016 Jordan Labor Market Panel Survey (JLMPS), this paper examines the dynamics of Jordanian workers’ access to social security before and after the 2010 reform and the coverage incidence across different firm sizes and workers’ characteristics. The paper also explores the time it takes to acquire social security coverage on the labor market before and after the reform. Moreover, trends in early retirement incidence among middle-aged male workers are examined. Our findings show that the overall incidence of social insurance coverage appears to slightly increase in 2016, for private sector wage workers, irregular wage workers, and non-wage workers (employers and self-employed). Workers starting in the public sector were the most likely to acquire social insurance coverage at the start of their jobs, followed by the private wage workers inside establishment. Both men and women who started their first job after the 2010 reform experienced a decline in their proportion of acquiring social insurance coverage upon their job start. Moreover, the average incidence of early retirement slightly declined among men while still being highly prevalent around ages 40-46. |
| Date: | 2018–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1185&r=all |
| By: | Kristyna Troneckova (Masaryk Univerisity, Czech Republic) |
| Abstract: | The aim of the research is to compare the well-being and social life of people over sixty years of age depending on the degree of national spirituality. The goal is to capture and describe the quality of life and spirituality among the Bhutanese, Norwegian and Chinese populations in comparison with Czech participants, mainly by semi-structured interviews and the use of interpretative phenomenological analysis serving as a tool for evaluating given interviews. For research work, it is crucial to contribute to the understanding of phenomena that can lead to greater seniors' satisfaction, which is important because the amount of these people is still increasing. The current results have shown a big difference between the religion in Norway and Bhutan, the country of happiness. There was found a strong belief in Tibetan Buddhism among Bhutanese participants so far. None of the participants considered himself an atheist or a person with non-religious spirituality. All respondents showed a high level of satisfaction with life, and they often experienced joy. They come from well functional families and are happy with themselves. Norwegian participants are mostly agnostic or non-religious spiritual persons. None of them has proved to be a practicing believer nor a strict atheist. They felt the sense of life primarily in sport and in nature, they often mention cross-country skiing as a way of getting closer to the spirit. Furthermore, the intention is to extend the research on other nations. |
| Keywords: | well-being, spirituality, belief, Christianity, Buddhism, quality of life |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:smo:jpaper:021kt&r=all |