nep-age New Economics Papers
on Economics of Ageing
Issue of 2019‒03‒18
six papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. “If You Were Me†: Proxy Respondents’ Biases in Population Health Surveys By Bérengère Davin; Xavier Joutard; Alain Paraponaris
  2. Modern tontine with bequest: innovation in pooled annuity products By Thomas Bernhardt; Catherine Donnelly
  3. The Disability Option: Labor Market Dynamics with Macroeconomic and Health Risks By Amanda Michaud; David Wiczer
  4. Sorting in an urban housing market - is there a response to demographic change? By Neumann, Uwe; Taruttis, Lisa
  5. Effect of an increase in longevity on housing prices: Evidence from a panel data By Sun, Tianyu; Chand, Satish; Sharpe, Keiran
  6. Analysis of the current situation in the field of social services for senior citizens By Grishina, Elena (Гришина, Елена Е); Tsatsura, Elena (Цацура, Елена)

  1. By: Bérengère Davin (Aix Marseille Univ., INSERM, IRD, SESSTIM & Observatoire Régional de la Santé PACA); Xavier Joutard (Aix Marseille Univ., CNRS, LEST & OFCE); Alain Paraponaris (Aix Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE & Observatoire Régional de la Santé PACA)
    Abstract: Proxy respondents are widely used in population health surveys to maximize response rates. When surveys target frail elderly, the measurement error is expected to be smaller than selection or participation biases. However, in the literature on elderly needs for care, proxy use is most often considered with a dummy variable in which endogeneity with subjects’ health status is rarely scrutinised in a robust way. Pitfalls of this choice extend beyond methodological issues. Indeed, the mismeasurement of needs for care with daily activities might lead to irrelevant social policies or to private initiatives that try to address those needs. This paper proposes a comprehensive and tractable strategy supported by various robustness checks to cope with the suspected endogeneity of proxy use to the unobserved health status of subjects in reports of needs for care with activities of daily living. Proxy respondents’ subjectivity is found to inflate the needs of the elderly who are replaced or assisted in answering the questionnaire and to deflate the probability of unmet or undermet needs.
    Keywords: proxy respondent, measurement bias, endogeneity, selection, Copula, needs for care, ADLs, IADLs
    JEL: C31 C35 C36 I12 J14
    Date: 2019–02
  2. By: Thomas Bernhardt; Catherine Donnelly
    Abstract: We introduce a new pension product that offers retirees the opportunity for a lifelong income and a bequest for their estate. Based on a tontine mechanism, the product divides pension savings between a tontine account and a bequest account. The tontine account is given up to a tontine pool upon death while the bequest account value is paid to the retiree's estate. The values of these two accounts are continuously re-balanced to the same proportion, which is the key feature of our new product. Our main research question about the new product is what proportion of pension savings should a retiree allocate to the tontine account. Under a power utility function, we show that more risk averse retirees allocate a fairly stable proportion of their pension savings to the tontine account, regardless of the strength of their bequest motive. The proportion declines as the retiree becomes less risk averse for a while. However, for the least risk averse retirees, a high proportion of their pension savings is optimally allocated to the tontine account. This surprising result is explained by the least risk averse retirees seeking the potentially high value of the bequest account at very old ages.
    Date: 2019–03
  3. By: Amanda Michaud (University of Western Ontario); David Wiczer (Stony Brook University)
    Abstract: We evaluate the contribution of changing macroeconomic conditions and demographics to the increase in Social Security Disability Insurance (SSDI) over recent decades. Within our quantitative framework, multiple sectors differentially expose workers to health and economic risks, both of which affect individuals’ decisions to apply for SSDI. Over the transition, falling wages at the bottom of the distribution increased awards by 27% in the 1980s and 90s and aging demographics rose in importance thereafter. The model also implies two-thirds of the decline in working-age male employment from 1985 to 2013, three-fourths of which eventually goes on SSDI.
    Date: 2018
  4. By: Neumann, Uwe; Taruttis, Lisa
    Abstract: In urban areas, there is considerable neighbourhood-level variation in population characteristics. Using Dortmund as a case study we analyse whether and to what extent rents, housing prices and segregation dynamics corresponded with demographic ageing in urban neighbourhoods between 2007 and 2016. We find that in Dortmund so far there has been no slump of the housing market in neighbourhoods where the population ages more rapidly. Nevertheless, over the study period demographic segregation was on the rise and, according to a hedonic analysis, prices for apartments were higher in districts with a comparatively "younger" population. In the course of further demographic change in Germany, which has come to a contemporary halt due to immigration, the response to ageing on urban housing markets in terms of location choice and prices may therefore become more evident. A large-scale urban regeneration project has revitalised the housing market of a declining Dortmund community during this decade. Since local ageing has not affected housing markets severely so far, it appears to be within the scope of urban policy to upgrade the attractiveness of ageing neighbourhoods as perceived by younger generations.
    Keywords: neighbourhood sorting,demographic segregation,hedonic analysis,urban policy
    JEL: R21 R23 R31 R58 J61
    Date: 2018
  5. By: Sun, Tianyu; Chand, Satish; Sharpe, Keiran
    Abstract: We test the effect of an increase in longevity on housing prices. The results show that workers and retirees react differently towards the impact of longer lifespans, and thus the housing price is influenced by the relative weight of the retirees vis-à-vis workers in the total population.
    Keywords: Longevity, Housing prices, Semi-parametric analysis
    JEL: J11 R21
    Date: 2018–11–01
  6. By: Grishina, Elena (Гришина, Елена Е) (The Russian Presidential Academy of National Economy and Public Administration); Tsatsura, Elena (Цацура, Елена) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: Building an effective system of social services for senior citizens is designated as one of the priorities in the strategic documents of the country's development. The aim of the study is to analyze the current situation in the field of social services for older citizens based on data from the forms of federal statistical observation.
    Date: 2019–03

This nep-age issue is ©2019 by Claudia Villosio. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.