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on Economics of Ageing |
| By: | Tullio Jappelli (Università di Napoli Federico II, CSEF and CEPR); Immacolata Marino (Università di Napoli Federico II and CSEF); Mario Padula (Università "Ca' Foscari" Venezia and CSEF) |
| Abstract: | According to the life-cycle model, if there is an expectation that social security benefits will fall, demand for retirement saving should increase. In precautionary saving models, the risk associated to future benefits matters and, if benefits become more uncertain, individuals will react by increasing their demand for retirement saving. To assess the empirical relevance of this mechanism, we rely on unique Italian data to obtain individual level measures of the subjective distribution of the social security benefit replacement rate. Italy is an interesting example, because of the frequent changes to eligibility rules and benefits implemented in the past thirty years, fueling individual uncertainty about future pension outcomes. We find evidence of wide cross-sectional heterogeneity in both the location and scale of the subjective replacement rate distribution. Our results indicate higher participation in private pension funds among individuals who expect lower and more uncertain replacement rates. JEL Classifications: D12, D14, E21 |
| Keywords: | Pension uncertainty; Retirement saving; Subjective distributions; Social security. |
| Date: | 2019–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:526&r=all |
| By: | Hui He; Lei Ning; Dongming Zhu |
| Abstract: | We study, both empirically and quantitatively, the role of savings and the labor supply in self-insurance channels over the life cycle when one faces not only idiosyncratic income risks, but also changes in longevity risk and pension benefits. We pick China as a case study since China has undergone a dramatic process of rapid aging and a tremendous reduction in social security benefits for the period 1995-2009. We find that both savings and the labor supply are quantitatively important self-insurance channels in responding to changes in longevity risk and pension benefits, and the responses via adjustment to savings and labor supply have significant macroeconomic implications. Applying the model to China, we find that the pension reform and rapid aging together contribute 55 percent of the increase in the household saving rate from 1995 to 2009, and they jointly capture about 64 percent of the drastic increase in the labor supply for the same period. |
| Date: | 2019–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/61&r=all |
| By: | Izabela Karpowicz |
| Abstract: | The Netherlands’ pension system is characterized by high participation rates, adequate retirement income, strong capitalization and sustainability. Pressure points are arising, however, due to population aging and untransparent intergenerational transfers inherent in the system. Moreover, the Dutch pension system needs to adapt to the changing labor market landscape with an increasing share of workers in self-employment not covered by any pension arrangement. The government has proposed replacing collective defined-benefits schemes with personal accounts, and abolishing uniform premia and constant accrual rates. The micro-data analysis shows that allowing greater risk-taking and freedom of choice in managing pension savings could crowd self-employed into pension schemes. |
| Date: | 2019–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/64&r=all |
| By: | Zubarev, Andrey (Зубарев, Андрей) (The Russian Presidential Academy of National Economy and Public Administration); Nesterova, Kristina (Нестерова, Кристина) (The Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | This paper is aimed at modeling of the proposed rise in retirement age for Russian economy (from 60 to 65 for men and from 55 to 60 for women) in the setting of a global CGE-OLGE model that includes over 100 countries grouped into 17 regions. The model takes into account the relevant long run demographic forecasts made by the UN and the current budget structure for all the 17 regions/ the results suggest a weak effect of the rise in retirement age on the economic activity and a substantial positive effect on a long-term balance of the state budget. |
| Keywords: | general equilibrium model, pension reform, retirement age |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:031952&r=all |
| By: | Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Many EU countries are currently undergoing major demographic changes, particularly in terms of shrinking total and working-age populations and population ageing. If this trend is to continue, the functioning of the labour market is at risk as labour shortages are increasingly more likely to emerge which will subsequently imperil further economic growth and catching-up across the EU. This report addresses the likely labour-market consequences of observable demographic trends in the EU. It applies a simple trend-based model which uses observable trends of the past 15 years of the working-age population and the activity rate – which together determine the evolution of the supply of labour – as well as of labour productivity and GDP growth – which together determine the evolution of the demand for labour – to simulate likely scenarios for the future development of labour supply and demand until 2050. Projected future trends in both labour supply and demand are then used to establish whether and – if so – in what year adverse past demographic developments are likely to kick in and begin jeopardising further growth. Different simulation exercises demonstrate that in some EU countries – particularly countries in Central and Eastern Europe – labour supply-side constraints would already materialise in the mid-2020s, which calls for quick policy action to address and ideally avert the imminent demographic collapse. |
| Keywords: | demographic change, labour supply constraints, labour shortages, growth |
| JEL: | J11 J21 J23 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:rpaper:rr:439&r=all |
| By: | Hougaard Jensen, Svend E.; Lassila, Jukka; Määttänen, Niku; Valkonen, Tarmo; Westerhout, Ed |
| Abstract: | Abstract According to the 2018 Mercer Global Pension index, the pension systems of Denmark, Finland and the Netherlands are the best three in the world. This paper seeks to identify the common elements of success of these three pension systems, including the institutional framework within which they operate. We emphasize the collective and compulsory nature of the earnings-related pension schemes and the important role for social partners in all three pension systems. We also discuss what we believe are the most important challenges these systems face. |
| Keywords: | Pensions, Pension taxation, Fiscal sustainability, Saving, Retirement |
| JEL: | D58 E21 H55 H68 J11 J26 |
| Date: | 2019–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:rif:wpaper:66&r=all |
| By: | Works, Richard; Meharenna, Ruth |
| Abstract: | In this Beyond the Numbers, we review the evolution of private industry health and retirement plans (with a focus on defined contributions and savings and thrift retirement plans) and provide an analysis using recent estimates from the National Compensation Survey (NCS). Where applicable, we refer back to a 1990 article by George Stelluto and Deborah Klein in the Monthly Labor Review in which they discussed historical trends in employee compensation from the 1930s through 1980s and offered information on future expectations for compensation developments. |
| Keywords: | health, retirement, pension, compensation |
| JEL: | J01 |
| Date: | 2019–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92904&r=all |
| By: | Scherbov, Sergey (Щербов, Сергей) (The Russian Presidential Academy of National Economy and Public Administration); Shulgin, Sergey (Шульгин, Сергей) (The Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | In this paper, a multi-region demographic forecast of Russia until 2050 is built and analyzed. In the baseline scenario in 2050, the population of Russia is 145,970 thousand (a decrease of 0.2% from the 2018 level of 146,880 thousand). In the scenario with zero migration in 2050, the population is 139,714 thousand (a decrease of 4.9%). For Russia, the indicator of human life is estimated at 67.7 years in 2017 (61st place in the world). The paper estimates the threshold of old age in Russia for women was 69 years and 62.6 years for men. The median age increases from 39.2 years in 2018 to 46.4 years in 2050, while the promising (taking into account increased life expectancy) median age in 2050 is 34.7 years. |
| Keywords: | demography, demographic projection, indicator of human life, life expectancy, old age threshold, gender and age structure of the population, regional differentiation |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:031948&r=all |
| By: | Jody Schimmel Hyde; April Yanyuan Wu |
| Abstract: | In this study, we use the Health and Retirement Study linked to detailed occupational data to descriptively examine whether the occupational path of older workers who report a new work-limiting health condition in the years before retirement differs from that of workers who remain limitation-free. |
| Keywords: | occupations, transitions, disability, work limitations |
| JEL: | I J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:0d12254d6aa542e09156584e8db851ba&r=all |
| By: | Michael J. Böhm; Christian Siegel |
| Abstract: | We argue that rising supply of experience not only reduces experienced workers' relative wages but also their relative labor market participation. From a theoretical model we derive predictions which we quasi-experimentally investigate, using variation across U.S. local labor markets (LLMs) over the last decades and instrumenting experience supply by the LLMs' age structures a decade earlier. We find that aging substantially reduces experienced workers' relative wages and employment rates, and also their labor market participation rates. Our results imply thatthe effect of demographic change on labor markets might be more severe than previously recognized, as it reaches beyond wages. |
| Keywords: | Demographic Change; Employment of Experienced Workers; Return to Experience |
| JEL: | J11 J21 J31 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1902&r=all |
| By: | H. Spencer Banzhaf (The Center for State and Local Finance, Georgia State University, USA); Ryan Mickey (Maryville College, USA); Carlianne Patrick (The Center for State and Local Finance, Georgia State University, USA); Per Johnson (The Center for State and Local Finance, Georgia State University, USA) |
| Abstract: | Many local jurisdictions offer property tax exemptions or similar concessions to older citizens, especially from the school portion of the tax bill. Such exemptions can be controversial. This report is a step toward informing (but surely not settling!) such debates in Georgia. First, we apprise readers of a new resource, the Georgia Property Tax Database, housed at Georgia State University’s Fiscal Research Center. Second, we describe the patterns of the data, documenting the kinds of jurisdictions offering age-targeted exemptions and the steady increase in their prevalence and coverage over time. Third, we show how these data can be used to estimate the fiscal impacts of such exemptions on local budgets using static scoring. Fourth, we show how the data can be used to estimate the effect of these exemptions on the migratory and location decisions of older households. Finally, we include an age-based homestead exemption estimate calculator in the appendix. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:ays:cslfwp:cslf1904&r=all |
| By: | Éric Defebvre (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée) |
| Abstract: | The role of working conditions on workers' health status has been widely acknowledged in the literature in general but has received less attention in economics, due to the inherent statistical biases and the lack of data available to determine the role of simultaneous and chronic exposures. This study aims at estimating the causal impact of detrimental working conditions on the self-declaration of chronic diseases in France. Using a rebuilt retrospective lifelong panel and defining indicators for physical and psychosocial strains, we implement a mixed econometric strategy relying on difference-in-differences and matching methods taking into account for selection biases as well as unobserved heterogeneity. For men and women, we find deleterious effects of both types of working conditions on the declaration of chronic diseases after exposure, with varying patterns of impacts according to the strains' nature and magnitude. These results bring insights on the debate linked to legal age retirement postponement and plead for policies happening early in individuals' careers in order to prevent subsequent, mid-career health repercussions as well as schemes more focused on psychosocial risk factors. |
| Keywords: | Working conditions,Chronic diseases,Difference-in-differences,Matching |
| Date: | 2019–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02070308&r=all |
| By: | Florian Bonnet (ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay) |
| Date: | 2019–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02067193&r=all |
| By: | Ghassan, Hassan; Alhajhoj, Hassan R.; Balli, Faruk |
| Abstract: | The paper aims to explore the impacts of bi-demographic structure on the current account and growth. Using a SVAR modeling, we track the dynamic impacts between these underlying variables. New insights have been developed about the dynamic interrelation between population growth, current account and economic growth. The long-run net impact on economic growth of the domestic working population growth and demand labor for emigrants is positive, due to the predominant contribution of skilled emigrant workers. Besides, the positive long-run contribution of emigrant workers to the current account growth largely compensates the negative contribution from the native population, because of the predominance of skilled compared to unskilled workforce. We find that a positive shock in demand labor for emigrant workers leads to an increasing effect on native active age ratio. Thus, the emigrants appear to be more complements than substitutes for native workers. |
| Keywords: | Hybrid population, Current account, Growth, Structural modeling, Saudi Arabia |
| JEL: | C51 F22 F41 J15 J23 |
| Date: | 2018–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:93013&r=all |
| By: | Asplund, Rita; Vanhala, Pekka |
| Abstract: | Abstract The government reached its 2019 goal of 72% for the employment rate. Yet, the policymaking arena has already rushed to raise the target to 75%. This official employment rate, which measures the share of the employed in the 15–64 aged population, however, conceals large differences both between and within age groups. Particularly problematic is that it overlooks the weak employment situation of those with only a primary education and of persons of foreign background born abroad. In view of this it may be asked whether the official employment rate really is to be considered as a reasonable goal and guiding principle for employment policies. It includes school-aged groups and even youngsters still obliged to participate in compulsory education. It neglects the fact that growing numbers of adults leave working life for upskilling or reskilling due to rapid technological change. Hence, the activity rate (the joint share of students and employed) would be a more relevant indicator especially in the case of youngsters but increasingly so also for adults. Left aside are also key questions such as: Why has the employment rate risen in some age groups but not in others? What is the quality of the employment relationships underlying the observed increase in employment? The design of policy measures needs to be supported by information on group-specific employment rates supplemented with more precise quantitative as well as qualitative indicators. |
| Keywords: | Employment rate, Age group, Gender, Education level, Ethnicity, Activity rate |
| JEL: | I20 J21 |
| Date: | 2019–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:rif:briefs:77&r=all |