nep-age New Economics Papers
on Economics of Ageing
Issue of 2019‒05‒13
thirteen papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Impact of later retirement on mortality: Evidence from France By Antoine Bozio; Clémentine Garrouste; Elsa Perdrix
  2. Assessing and Addressing the Mobility Needs of an Aging Population By Ragland, David R; MacLeod, Kara E; McMillan, Tracy; Doggett, Sarah; Felschundneff, Grace
  3. Do People Save More After They Marry? By Geoffrey T. Sanzenbacher; Wenliang Hou
  4. The Effect of College Education on Health and Mortality: Evidence from Canada By Guy Lacroix; François Laliberté-Auger; Pierre-Carl Michaud; Daniel Parent
  5. Playing with Fire? Debt near Retirement in Canada By Nicolas Bédard; Pierre-Carl Michaud
  6. Social Security Replacement Rates and Other Benefit Measures: An In-Depth Analysis By Congressional Budget Office
  7. Tax-Sheltered Retirement Accounts: Can Financial Education Improve Decisions? By M. Martin Boyer; Philippe d'Astous; Pierre-Carl Michaud
  8. From Microeconomic Favoritism to Macroeconomic Populism By Gilles Saint-Paul
  9. Inequality and the generational economy: Race-disaggregated National Transfer Accounts for South Africa, 2015 By Oosthuizen Morné
  10. Who Benefits from Tax-Preferred Savings Accounts? By Steeve Marchand
  11. The framing of options for retirement: experimental tests for policy By McGowan, Féidhlim; Lunn, Pete; Robertson, Deirdre
  12. Inégalités socioéconomiques et conceptions subjectives du bien vieillir : Résultats d'une enquête quantitative By Bénédicte H. Apouey
  13. Maîtriser les dépenses de santé face au changement démographique : Une analyse de l’évolution des coûts à l’hôpital au Québec By Damien Échevin; Marc-André Morin

  1. By: Antoine Bozio (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, IPP - Institut des politiques publiques - PSE - Paris School of Economics); Clémentine Garrouste (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine, Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris-Dauphine); Elsa Perdrix (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)
    Abstract: This paper investigates the impact of delaying retirement on mortality among the French population. We take advantage of the 1993 pension reform in the private sector to identify the causal effect of an increase in claiming age on mortality. We use administrative data which provide detailed information on career characteristics, dates of birth and death. Our results, precisely estimated, show that an exogenous increase of the claiming age has no significant impact on the probability to die between age 65 and 72, conversely we find that an increase of the retirement age of one year leads to an increase of 0.004 in the death rate between age 72 and 77. This effect is qualitatively small, and we discuss more generally the ability to estimate small effects in rare event data using minimal detectable effect procedure.
    Keywords: pension reform,health,mortality
    Date: 2019–02
  2. By: Ragland, David R; MacLeod, Kara E; McMillan, Tracy; Doggett, Sarah; Felschundneff, Grace
    Abstract: The mobility needs of an aging population is one of the most substantial challenges facing California in the coming decades. The number of residents age 65 and older is expected to double between 2012 and 2050, and the number age 85 and above is expected to increase by over 70% between 2010 and 2030. Declines in physical function related to age may reduce mobility options dramatically. A survey of 510 residents age 55 and older in Contra Costa County was conducted to determine mobility patterns and limitations related to age and other factors. Results of the survey indicate that a majority of seniors are car dependent. However, some older adults miss important activities due to mobility limitations associated with increasing age, poorer health, living alone, not having a licensed driver in the household, and having a disability. Mobility options are also limited in some geographic areas and demographic groups. Importantly, older adults want to “age in place.” Based on these findings and those in related studies, the travel options and the quality of life for older adults, now and in the future, can be greatly enhanced if efforts are made to develop mobility solutions beyond use of private vehicles. The findings support the recommendations of recent regional plans such as the Coordinated Public Transit–Human Services Transportation Plan (2018), adopted by the Metropolitan Transportation Commission (MTC) of the San Francisco Bay Area, which recommends supporting a range of mobility options centered around shared mobility and accessibility for populations at risk for limited mobility.
    Keywords: Social and Behavioral Sciences, Mobility, aged, travel behavior, surveys, demographics
    Date: 2019–04–01
  3. By: Geoffrey T. Sanzenbacher; Wenliang Hou
    Abstract: Millennials marry later than previous generations. Since marriage is a major life milestone that often marks a line between youth and adulthood, a logical question is how this delay affects retirement saving. This brief uses data from the Survey of Income and Program Participation linked to W-2 records on defined contribution plan deferrals to determine the extent to which marriage affects retirement saving. The brief is organized as follows. The first section provides background on marriage trends for young adults and considers why marriage could affect saving. The second section describes the data and methodology used to examine the relationship between marriage and retirement saving, and the third section presents the results. The final section concludes that while delays in marriage do delay saving, the size of any reduction in retirement wealth is likely to be small.
    Date: 2019–04
  4. By: Guy Lacroix; François Laliberté-Auger; Pierre-Carl Michaud; Daniel Parent
    Abstract: We investigate the returns to college attendance in Canada in terms of health and mortality reduction. To do so, we first use a dynamic health microsimulation model to document how interventions which incentivize college attendance among high school graduates may impact their health trajectory, health care consumption and life expectancy. We find large returns both in terms of longevity (4.1 years additional years at age 51), reduction in the prevalence of various health conditions (10-15 percentage points reduction in diabetes and 5 percentage points for stroke) and health care consumption (27.3% reduction in lifetime hospital stays, 19.7 for specialists). We find that education impacts mortality mostly by delaying the incidence of health conditions as well as providing a survival advantage conditional on having diseases. Second, we provide quasi-experimental evidence on the impact of college attendance on longterm health outcomes by exploiting the Canadian Veteran’s Rehabilitation Act, a program targeted towards returning WW-II veterans and which incentivized college attendance. The impact on mortality are found to be larger than those estimated from the health microsimulation model (hazard ratio of 0.216 compared to 0.6 in the simulation model) which suggest substantial returns to college education in terms of healthy life extension which we estimate around one million canadian dollars.
    Keywords: mortality, education, microsimulation, quasi-experimental, instrumental variables, veterans.
    JEL: I14
    Date: 2018
  5. By: Nicolas Bédard; Pierre-Carl Michaud
    Abstract: Because retired households cannot adjust quickly to shocks, for example by working more, they represent a vulnerable group when credit conditions deteriorate. We analyze the evolution of debt among households nearing retirement in Canada over the period 1999-2016. First, we find that debt as a ratio of income has risen considerably over that period and debt as a fraction of assets has also doubled even tough assets remain roughly five times as large as debt. Second, we report that mortgage debt has risen the most but that average mortgage payments have remained relatively constant over the period due to the downward trend in borrowing costs. Finally, we find that a small but significant fraction households are playing with fire, being vulnerable to a sudden rise on borrowing costs or a drop in house values which could jeopardize their standard of living in retirement.
    Keywords: Household debt, mortgages, credit, retirement.
    JEL: D14 D18 J14
    Date: 2018
  6. By: Congressional Budget Office
    Abstract: In this report, CBO examines whether Social Security benefits enable retired workers to meet their basic needs and the extent to which benefits replace preretirement earnings. Focusing on workers with long careers, CBO finds that those benefits enable most of those workers to cover their essential living expenses as measured by the official federal poverty threshold. However, the extent to which benefits replace preretirement earnings varies substantially, depending on the way benefits and earnings are measured.
    JEL: H55 J26 I32
    Date: 2019–04–16
  7. By: M. Martin Boyer; Philippe d'Astous; Pierre-Carl Michaud
    Abstract: We conduct a stated-choice experiment to analyze the decision to contribute to front or back-loaded tax-sheltered savings accounts. Our experimental design includes a randomized financial education treatment that provides information on the two types of accounts. We assess whether respondents learn about the tax implications of these accounts, and whether they make better contribution choices when exposed to the financial education intervention. We find that, relative to a control group, our intervention improves both the understanding of the tax implications of the savings accounts (an increase of 6 to 15 points on a score of 100) and the quality of contribution decisions, improving the well-being of respondents by about 140$ in each scenario presented to them.
    Keywords: Tax sheltered saving,retirement saving,financial education,
    JEL: G11 H31 D14
    Date: 2019–05–03
  8. By: Gilles Saint-Paul (New York University Abu Dhabi, PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Why would people support policies that are macroeconomically unsound, in that they are more likely to lead to such events as sovereign crises, balance of payments crises, and the like? This may arise if decisive voters are likely to bear a lower fraction of the costs of the crisis, while bene.tting from the short-run gains associated with those policies, such as greater public expenditure or lower taxes. I first discuss an illustrative model based on Saint-Paul et al. (2017), based on the assumption that in a crisis, not everybody can access his or her entitlement to publicly provided goods, a feature labelled "favoritism". If the decisive voter is relatively favored in this rationing process, then people are more likely to finance public expenditure by debt, the greater the degree of favoritism. Furthermore, favoritism and the likelihood of a crisis raises the level of public spending. Next, I consider the choice between electing a "populist" who reneges on anonymity when allocating the public good, even in normal times, and a "technocrat" who sticks to anonymity, and does all it takes to balance the budget. I show that the support for the populist is greater, (i) the greater the likelihood of default, (ii) the more depressed the macroeconomic environment, (iii) the greater the inherited level of public debt and (iv) the lower the state's fiscal capacity. I then argue that the model helps understanding some episodes in French pension reform. Some occupational groups supported unsustainable reductions in the retirement age because they expected that other workers would bear a higher proportion of the burden of future adjustment. Finally, using a panel of countries, I provide evidence in favor of some of the predictions of the model. As predicted, favoritism raises public debt, budget de.cits, and public spending. It also raises the likelihood of a fiscal crisis through its effect on public debt. Furthermore, "populists" are more likely to conquer power, the higher the degree of debt and budget deficits, and the higher the level of government spending.the latter finding being consistent with the model's prediction on the effect of fiscal capacity.
    Keywords: Political economy,Fiscal crises,Favoritism,Entitlements,Public debt,Inequality,State capacity
    Date: 2019–03
  9. By: Oosthuizen Morné
    Abstract: Differences in the economic lifecycle between countries at different levels of development suggest that there may be differences between sub-populations within countries, particularly where the sub-populations have different levels of income. Given stark inequalities by race in South Africa, this paper constructs a full set of race-disaggregated National Transfer Accounts for 2015 and finds substantial differences between them in patterns of producing, consuming, sharing, and saving across the lifecycle.Resources flow strongly downwards to younger cohorts for all groups, while older Africans make large transfers to household members when compared with their counterparts of other races. Differences in the financing of consumption at older ages between race groups suggest that South Africa’s second demographic dividend may be overstated by reliance on national-level profiles.The results suggest that National Transfer Accounts-based estimates of the demographic dividends would benefit from accounting for differences between sub-populations.
    Keywords: national transfer accounts,demographic dividend,economic lifecycle,Intergenerational Mobility
    Date: 2019
  10. By: Steeve Marchand
    Abstract: Many countries use tax-preferred saving accounts to incentivize individuals to save for retirement. The two main forms of tax-preferred saving accounts – TEE and EET – tax savings at the contribution and withdrawal years respectively. Thus the relative returns of the two savings vehicles depend on the effective marginal tax rates in these two years, which in turn depend on earning dynamics. This paper estimates a model of earning dynamics on a Canadian longitudinal administrative database containing millions of individuals, allowing for substantial heterogeneity in the evolution of income across income groups. The model is then used, together with a tax and credit calculator, to predict how the returns of EET and TEE vary across these groups. The results suggest that TEE accounts yield in general higher returns, especially for low-income groups. Comparing optimal saving choices predicted by the model with observed saving choices in the data suggests that EET are over-chosen, especially in the province of Quebec. These results have important implications for “nudging†policies that are currently being implemented in Quebec, forcing employers to automatically enrol their employees in savings accounts similar to EET. These could yield very low returns for low-income individuals, which are known to be the most sensitive to nudging.
    Keywords: Personal savings; Taxation; Public policy.
    JEL: D14 H24 J18 J26
    Date: 2018
  11. By: McGowan, Féidhlim; Lunn, Pete; Robertson, Deirdre
    Date: 2018
  12. By: Bénédicte H. Apouey (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)
    Abstract: Cet article s'intéresse aux conceptions subjectives du « bien vieillir » chez les plus de 40 ans en France. Nous tentons de mettre au jour les facteurs explicatifs de ces conceptions, en prêtant une attention particulière au rôle du statut socioéconomique. Pour cela, nous analysons des données issues d'une enquête quantitative originale menée en 2016 auprès d'environ 1730 adhérents d'une mutuelle. Dans l'ensemble, bien vieillir signifie surtout être satisfait de sa santé, de sa situation financière, de sa vie familiale et de son couple. Les conditions d'existence ont un impact sur les conceptions du bien vieillir. En effet, dans les milieux plus favorisés, bien vieillir est plus souvent synonyme de bonne santé, de sociabilité et de projets, tandis que dans les milieux plus défavorisés, l'accent est davantage mis sur la satisfaction vis-à-vis du logement et de son environnement, ce qui pourrait renvoyer à des conditions d'habitat plus souvent insatisfaisantes et au « choix du nécessaire ».
    Keywords: Conception du bien vieillir,Vieillissement,Seniors,Statut socioéconomique,France
    Date: 2019–04
  13. By: Damien Échevin; Marc-André Morin
    Abstract: À partir de données médico-administratives longitudinales sur les séjours à l’hôpital et les coûts au Québec pour la période 1995-2012, une décomposition de la variation des coûts de santé à l’hôpital est effectuée afin d’en analyser les principaux déterminants. Entre 1995 et 2012, la part des séjours hospitaliers a représenté 86% de la hausse des coûts à l’hôpital, contre seulement 14% pour les services médicaux à l’acte. De 2008 à 2012, cette répartition a été respectivement de 41% et 59%. Sur la période la plus récente observée, comme on aurait pu s’y attendre du fait de la hausse des rémunérations des médecins spécialistes, c’est donc la forte hausse des coûts des services médicaux qui a le plus contribué à la hausse des coûts à l’hôpital. Néanmoins, l’augmentation des volumes d’actes a davantage contribué à la hausse globale des coûts que la hausse des prix des actes. Il est de plus difficile d’établir un changement de comportement chez les médecins suite aux bonifications récentes des prix des actes, dans la mesure où la variation des volumes d’actes apparaît assez déconnectée de la variation des prix des actes. On montre enfin que l’effet de vieillissement ne prédomine pas tous les autres et semble avoir une relativement faible influence sur l’évolution des coûts de santé à l’hôpital. C’est donc davantage une combinaison des changements dans la prévalence des maladies et des changements de pratiques qui ont eu pour effet d’entraîner la hausse globale des coûts.
    Keywords: Dépenses de santé, vieillissement, coûts hospitaliers, Québec.
    JEL: H51 I10 I18 J18
    Date: 2019

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