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on Economics of Ageing |
| By: | McGrattan, Ellen R. (Federal Reserve Bank of Minneapolis); Miyachi, Kazuaki (Asia Pacific Department, International Monetary Fund); Peralta-Alva, Adrian (International Monetary Fund) |
| Abstract: | Japan is facing the problem of how to finance retirement, health care, and long-term care expenditures as the population ages. This paper analyzes the impact of policy options intended to address this problem by employing a dynamic general equilibrium overlapping generations model, specifically parameterized to match both the macro- and microeconomic level data of Japan. We find that financing the costs of aging through gradual increases in the consumption tax rate delivers better macroeconomic performance and higher welfare for most individuals relative to other financing options, including raising social security contributions, debt financing, and a uniform increase in health care and long-term care copayments. |
| Keywords: | Retirement; Health care; Taxation; Aging; Japan |
| JEL: | E62 H51 H55 I13 |
| Date: | 2019–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:586&r=all |
| By: | Conesa, Juan Carlos (Stony Brook University); Kehoe, Timothy J. (Federal Reserve Bank of Minneapolis); Nygard, Vegard (Federal Reserve Bank of Minneapolis); Raveendranathan, Gajendran (McMaster University) |
| Abstract: | We develop and calibrate an overlapping generations general equilibrium model of the U.S. economy with heterogeneous consumers who face idiosyncratic earnings and health risk to study the implications of exogenous trends in increasing college attainment, decreasing fertility, and increasing longevity between 2005 and 2100. While all three trends contribute to a higher old age dependency ratio, increasing college attainment has different macroeconomic implications because it increases labor productivity. Decreasing fertility and increasing longevity require the government to increase the average labor tax rate from 32.0 to 44.4 percent. Increasing college attainment lowers the required tax increase by 10.1 percentage points. The required tax increase is higher under general equilibrium than in a small open economy with a constant interest rate because the reduction in the interest rate lowers capital income tax revenues. |
| Keywords: | College attainment; Aging; Health care; Taxation; General equilibrium |
| JEL: | H20 H51 H55 I13 J11 |
| Date: | 2019–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:583&r=all |
| By: | Ion Stancu (Bucharest Academy of Economic Studies and Institute of Financial Studies, Bucharest,Romania); Dragos Haseganu (Financial Supervisory Authorityand Institute of Financial Studies, Bucharest, Romania); Alexandra Darmaz-Guzun (West University of Timisoara, Romania and Institute of Financial Studies, Bucharest,Romania) |
| Abstract: | The social pension system is a matter of particular complexity for any country and national authorities. National and international statistical and forecasting institutions, as well as research institutions, assume the complexity of the pension system as a major scientific and professional challenge for identifying social protection phenomena and designing a sustainable pension system.In this context, the Institute of Financial Studies (ISF) in Bucharest takes over this rebellion of concerns, proposing a series of studies on the sustainability of the Romanian pension system. Fortunately, our intention is to support previous studies conducted by demographics and social protection teams, as well as projections freely provided by relevant bodies (Eurostat, US Census Bureau, INS, CNSP, CNPP, EFOR, etc.).In this first ISF study we summarize, in the first part, the specialized literature, especially Romanian, with approaches to the specificities of pensions in Romania compared to the European countries, in the second part, the demographic evolution and tendencies in Romania, in the third part and fourth, the projections on the number of pensioners versus the number of taxpayers and, respectively, the projection of the financial balance of the pension system in Romania. Our studyassumes, with appreciation, the updating of the many previous projections of the established institutions and the attempt to explain contextually demographic and social protection phenomena. |
| Keywords: | the social pension system, demographic trends, social contributions and benefits, the financial balance of the pension system |
| JEL: | C15 C87 H55 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:fst:wpaper:0028&r=all |
| By: | James Staveley-O'Carroll (Babson College); Olena Staveley-O'Carroll (College of the Holy Cross) |
| Abstract: | We employ a two-country overlapping-generations model to explore the international dimension of household portfolio choices induced by the asymmetric provision of government-run pensions. We study the resulting patterns of risk-sharing and the corresponding welfare effects on both home and foreign agents. Introducing the de?fined benefi?ts pay-as-you-go system at home increases the welfare of all other agents at the expense of the home workers and improves the degree of intergenerational risk sharing abroad. Conversely, a defi?ned contributions system leads to welfare losses of both home cohorts accompanied by gains abroad, but does increase the extent of intergenerational risk sharing at home. |
| Keywords: | welfare, pay-as-you-go system, international portfolio choice, OLG model |
| JEL: | D52 F21 F41 G11 H55 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:1903&r=all |
| By: | van Dijk, Mathijs; van Dalen, Harry (Tilburg University, Center For Economic Research); Hyde, Martin |
| Abstract: | How do young and old workers fare on the labor market when a banking crisis occurs? Using data on 41 banking crises in 38 developed countries over 1990-2014, we examine how banking crises affect the labor market position of workers from five different age groups (including 65 years and older) and whether employment protection legislation shields workers from unemployment. Results show that unemployment increases across the board in the aftermath of banking crises, but much more so for younger workers. The labor force participation of older women increases significantly in the medium run, whereas older men withdraw from the labor market. Countries with strong employment protection legislation shield workers from the impact of banking crises in the short run, but show signs of increases in unemployment rates for young and middle-aged workers in the medium run. |
| Keywords: | banking crisis; unemployment; employment protection; age; older workers; labor force |
| JEL: | G01 J01 J08 J14 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:3874c7cc-7e0c-4471-b73c-28fe5111abb9&r=all |
| By: | Yleania Brilli; Claudio Lucifora (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Antonio Russo; Marco Tonello |
| Abstract: | We analyze the effects of a vaccination program providing free flu vaccine to individuals aged 65 or more on take-up and hospitalization. By using linked patient-general practitioner (GP) data, we implement a regression discontinuity design around the threshold at age 65. We find that the program increases vaccination take-up by 6 percentage points, which corresponds to 75% of the take-up for non-eligible individuals, and reduces the probability of hospitalization by about 44%. We show that the effect on take-up is not entirely due to an income channel, and that the effect on health is mainly driven by patients with higher-quality GPs and emergency hospitalizations. |
| Keywords: | vaccination, influenza, public health, health prevention policies. |
| JEL: | I12 I18 J10 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie1:def082&r=all |
| By: | Idriss Fontaine |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tep:teppwp:wp19-01&r=all |
| By: | Michael J. Boskin; Diego J. Perez; Daniel S. Bennett |
| Abstract: | We identify which types of Social Security reforms are supported when people vote in their financial self-interest, under alternative economic and demographic projections and voting proclivity assumptions. While 40% of voters have negative lifetime net transfers, less than 10% have negative future transfers under the un- sustainable status quo. Framing the problem as a choice between reforms is necessary for any to receive majority support. Delayed reforms are often preferred, but immediate tax hikes or slower benefit growth win in some circumstances. Inter-generational AND intragenerational heterogeneity of economic interests combine to affect which reforms are blocked and which are feasible. |
| JEL: | H55 H62 H68 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25985&r=all |
| By: | Bo Honore; Thomas Jorgensen; Aureo de Paula |
| Abstract: | This paper introduces measures for how each moment contributes to the precision of the parameter estimates in GMM settings. For example, one of the measures asks what would happen to the variance of the parameter estimates if a particular moment was dropped from the estimation. The measures are all easy to compute. We illustrate the usefulness of the measures through two simple examples as well as an application to a model of joint retirement planning of couples. We estimate the model using the UK-BHPS, and we find evidence of complementarities in leisure. Our sensitivity measures illustrate that the precision of the estimate of the complementarity is primarily driven by the distribution of the differences in planned retirement dates. The estimated econometric model can be interpreted as a bivariate ordered choice model that allows for simultaneity. This makes the model potentially useful in other applications. |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1907.02101&r=all |
| By: | Federica Daniele; Taku Honiden; Alexander C. Lembcke |
| Abstract: | OECD countries and their regions are ageing fast. In principle, the negative impact of ageing on the growth rate of per capita gross domestic product could be offset by increases in productivity. However, for many regions, productivity growth required to maintain per capita GDP levels constant has been higher than the actual growth rates they recorded in the past years. One reason for this is that ageing also has a direct negative impact on productivity growth, with the effect being concentrated in urban areas. One possible explanation is that cities specialise in sectors, such as tradable services, where the content of tasks makes it difficult to automate stages of the production process and where business dynamism, negatively affected by demographic change, is a more solid driver of productivity growth. Finally, ageing seems to be associated with a redistribution of revenues away from workers and towards capital and firm owners. |
| Keywords: | ageing,, cities, productivity growth, regions, |
| JEL: | J11 J24 R11 |
| Date: | 2019–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2019/08-en&r=all |
| By: | Kadija Charni (CEET - Centre d'études de l'emploi et du travail - CNAM - Conservatoire National des Arts et Métiers [CNAM] - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé) |
| Abstract: | L'objectif d'accroître le taux d'emploi des seniors soulève la question de leur retour à l'emploi en cas de chômage. À partir des données issues des enquêtes emploi anglaises, ce Connaissance de l'emploi tente de déterminer si le faible taux de réemploi des seniors est dû à leur âge. Les résultats montrent que la variable d'âge est effectivement un facteur important dans le retour à l'emploi des seniors si bien que les chances de retrouver un emploi diminuent à mesure que les travailleurs vieillissent. Ceci peut être en partie attribuable à des différences de comportement des entreprises en fonction de l'âge des candidats à l'embauche. Une simulation de la durée passée au chômage, basée sur l'âge, soutient le rôle clé de ce facteur dans l'écart de durée de chômage entre les seniors et le reste de la population active. |
| Keywords: | Retour à l'emploi,Seniors en reprise d'activité,Chômage,Grande-Bretagne |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02160887&r=all |