|
on Economics of Ageing |
| By: | James Banks (Institute for Fiscal Studies and University of Manchester); Elena Bassoli (Department of Economics, University Of Venice Cà Foscari); Irene Mammi (Department of Economics, University Of Venice Cà Foscari) |
| Abstract: | This paper investigates risk preference at older ages in 14 European countries. Older individuals report greater risk aversion. Using the longitudinal nature of the data we are able to show this relationship between risk preferences and age is not due to cohort effects or selective mortality. We also show, however, that on average roughly forty percent of this overall age effect is actually due to life events such as retirement, health shocks and widowhood or marital change that occur increasingly as individuals age. These life events are a particularly important explanation of the age `effect' for women and for the age group 50-64. |
| Keywords: | Risk attitude, ageing, health status, life-related events, SHARE |
| JEL: | D90 D91 D81 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2019:01&r=all |
| By: | Hurd, Michael D. (RAND); Susann Rohwedder (RAND) |
| Abstract: | Irregular withdrawals from IRAs and DC pensions are not included in standard measures of household income in the CPS or Health and Retirement Study. Yet, among retirees such withdrawals can supplement regular retirement income to finance consumption. It has been difficult to assess their importance, because of lack of informative survey data. In 2012 the HRS restructured the way it collects information about pensions, improving the measurement of irregular withdrawals from pension accounts. We analyzed HRS 2014 data and found that irregular withdrawals from pensions and IRAs totaled $2,049 for singles and $6,663 for couples averaged over everyone age 55 and older. These irregular withdrawals amount to about 5 percent of income for singles and 10 percent of income for married households. Irregular withdrawals are highest among those in the highest wealth quartile and those in the highest education group, reflecting the higher prevalence of pensions in high-paying jobs that are predominantly held by those with high education. Because of the greater frequency of IRA and pension withdrawals towards high SES individuals, accounting for them has little impact on estimates of the poverty rate. |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp387&r=all |
| By: | Katja Hanewald; Hazel Bateman; Hanming Fang; Shang Wu |
| Abstract: | Reverse mortgages provide an alternative source of retirement funding by allowing older homeowners to borrow against their home. However, a recent pilot program of reserve mortgage products in several large Chinese cities saw almost no take up. To ascertain the demand for reverse mortgages in China, we conduct and analyze two online surveys that focus respectively on homeowners aged 45-65 as potential purchasers, and on adult children in the 20-49 age group representing children of potential purchasers. We address the reported shortcomings of the pilot reverse mortgage product by testing an improved product design presented in a clear and comprehensive format. In stark contrast, we find that 89% of older Chinese homeowners would be interested in this new reverse mortgage product, and 84% of adult children would recommend such a product to their parents. Participants in both surveys reported that they would use the reverse mortgage payments to fund a more comfortable retirement and to pay for better medical treatments and aged care services. Respondents' interest in reverse mortgages was associated with their familiarity and understanding of the product, and its perceived potential to address liquidity constraints in retirement. Health status, aged care preferences and proxies for intergenerational links were also important. Our results are contrary to the common perception of intergenerational expectations of wealth transfer in China, and provide new evidence in support of the potential development of China's reverse mortgage market. |
| JEL: | D14 G11 G21 G22 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25491&r=all |
| By: | Joanna Tyrowicz (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University); Oliwia Komada (Warsaw School of Economics); Pawel Strzelecki (Warsaw School of Economics, National Bank of Poland) |
| Abstract: | The reform introduced in Poland in 2009 substantially and abruptly reduced the number of workers eligible for early retirement. This paper evaluates the causal effects of this reform on labor force participation and exit to retirement. We use rich rotating panel from the Polish Labor Force Survey and exploit the discontinuity imposed by this reform. We find a statistically significant, but economically small discontinuity at the timing of the reform. The placebo test shows no similar effects in earlier or later quarters, but in a vast majority of specifications the discontinuity is not larger for the treated individuals, i.e. those whose occupation lost eligibility. We interpret these results as follows: the changes in the eligibility criteria were not instrumental in fostering the participation rates among the affected cohort, i.e. the immediate contribution to increased labor force participation of these cohorts is not economically large. |
| Keywords: | retirement age, early retirement, regression discontinuity, Poland |
| JEL: | J14 J26 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201810&r=all |
| By: | Congressional Budget Office |
| Abstract: | Each year, CBO updates its projections of the Social Security system’s finances. Compared with projections made in June 2017, the agency’s latest projections indicate a slight improvement in the financial outlook for Social Security. The projected 75-year actuarial balance remains at −1.5 percent of gross domestic product (that is, a deficit of 1.5 percent). As a percentage of taxable payroll, the projected actuarial balance has improved slightly from −4.5 percent to −4.4 percent. CBO also compares its projections with those of the Social Security Trustees. |
| JEL: | H55 H60 H68 J26 |
| Date: | 2018–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:54711&r=all |
| By: | Dora Costa; Noelle Yetter; Heather DeSomer |
| Abstract: | We investigate when and how health shocks reverberate across the life cycle and down to descendants by examining the impact of war wounds on the socioeconomic status and older age mortality of US Civil War (1861-5) veterans and of their adult children. Younger veterans who had been wounded in the war left the farm sector, becoming laborers. Consistent with human capital and job matching models, older wounded men were unlikely to switch sectors and experienced wealth declines. Fathers' severe wartime wounds affected daughters', but not sons', socioeconomic status. Daughters were shorter-lived if their fathers were older at the end of the war and had been severely wounded compared to daughters of fathers not severely wounded or younger when severely wounded. We suspect that early life conditions disproportionately affected daughters. Our findings illuminate the long reach of disability in a manual labor economy. |
| JEL: | I12 J24 N12 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25480&r=all |
| By: | Zeballos, Eliana; Restrepo, Brandon |
| Abstract: | This report uses data from the 2014-16 Eating & Health Module (EHM) of the American Time Use Survey to present national statistics on eating and health patterns for the adult population as a whole and a wide variety of demographic subgroups. It also examines whether and how select behaviors have changed over time using data from the 2006-08 EHM. On an average day over 2014-16, Americans age 18 and older spent about 65 minutes eating and drinking as a primary activity, down 5 percent relative to an average day over 2006-08. The report finds significant differences across demographic subgroups in eating and health patterns, such as in prepared food purchases and physical activity, which may contribute to variation in nutrition and diet-related health outcomes across different segments of the U.S. population. |
| Keywords: | Food Consumption/Nutrition/Food Safety |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersrr:282509&r=all |
| By: | Katherine G. Carman (RAND); Angela A. Hung (RAND) |
| Abstract: | Social Security offers two types of benefits for spouses: spousal and survivor benefits. Regardless of his or her own work history, a married individual can claim spousal Social Security benefits, which are equal to half of his or her spouse’s Social Security benefits. Furthermore, a widow or widower can claim survivor benefits and receive or his or her deceased spouse’s full benefit if it is larger than his or her own benefit. Ideally, married individuals think about the impact of their Social Security choices on their spouse. However, if people do not fully understand the rules for the spousal and survivor benefits, they may make suboptimal choices, not only about Social Security claiming, but perhaps also about labor and marriage decisions. In this paper we make use of new data from the Understanding America Study to assess households’ understanding of these benefits. Overall, our results suggest that knowledge of spousal and survivors benefits is low. Furthermore, our results suggest that people’s perceptions of their knowledge is misaligned with their actual knowledge, with many perceiving that they know more about Social Security than they actually do. The results in this paper suggest particular areas where policymakers might be able to increase knowledge of spousal and survivors benefits. However, future research is needed to better understand how to increase knowledge in this area. |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp384&r=all |