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on Economics of Ageing |
| By: | Korfhage, T.; |
| Abstract: | In this paper, I estimate a dynamic structural model of labor supply, retirement, and informal care supply, incorporating labor market frictions and the German tax and benefit system. I find that informal elderly care has adverse and persistent effects on labor market outcomes and therefore negatively affects lifetime earnings, future pension benefits, and individuals'well-being. These consequences of caregiving are heterogeneous and depend on age, previous earnings, and institutional regulations. Policy simulations suggest that, even though fiscally costly, public long-term care insurance can offset the personal costs of caregiving to a large extent - in particular for low-income individuals. |
| Keywords: | long-term care; informal care; long-term care insurance; labor supply; retirement; pension benefits; structural model; |
| JEL: | I18 I38 J14 J22 J26 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:19/17&r=all |
| By: | Marie-Louise Leroux; Pierre Pestieau; Gregory Ponthiere |
| Abstract: | The study of optimal long-term care (LTC) social insurance is generally carried out under the utilitarian social criterion, which penalizes individuals who have a lower capacity to convert resources into well-being, such as dependent elderly individuals or prematurely dead individuals. This paper revisits the design of optimal LTC insurance while adopting the ex post egalitarian social criterion, which gives priority to the worst-off in realized terms (i.e. once the state of nature has been revealed). Using a lifecycle model with risk about the duration of life and risk about old-age dependence, it is shown that the optimal LTC social insurance is quite sensitive to the postulated social criterion. The optimal second-best social insurance under the ex post egalitarian criterion involves, in comparison to utilitarianism, higher LTC benefits, lower pension benefits, a higher tax rate on savings, as well as a lower tax rate on labor earnings. |
| Keywords: | long-term care, social insurance, fairness, mortality, compensation, egalitarianism. |
| JEL: | J14 I31 H55 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:criacr:1903&r=all |
| By: | Ianina Rossi (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República) |
| Abstract: | In this paper I assess Latin American contributory pension schemes in terms of their role in replacing earnings after retirement. I look for key elements that can explain differences, resulting in useful policy recommendations. My analysis is based on microsimulations of work histories and pension rights in 10 Latin American countries according to current norms and controlled scenarios. I use response surface analysis to summarize the results, performing regression analysis to assess the impact of changes in control variables on the effective replacement rate (ERR). The effects of covariates at scenario level and at regime level are considered. Results show that individual choices and luck are very relevant in determining ERRs. I also find that some policy variables have a great impact. This is the case of the contribution rate. These findings are particularly relevant for the current discussion on pension reform and pension adequacy in Latin America. |
| Keywords: | contribution rate, pension, replacement rate, retirement, social security |
| JEL: | H55 J14 J26 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:ude:wpaper:0818&r=all |
| By: | Barr, Nicholas |
| Abstract: | This paper starts from the fact that women receive lower pensions than men on average, and considers policies to address that fact. Women typically have lower wages than men, a greater likelihood of part-time work and more career breaks, and thus generally a less complete contribution record. In addition, pension age may be lower for women and annuities may be priced using separate life tables for women. The paper looks at three strategic ameliorative policy directions: policies intended to increase the size and duration of women’s earnings and hence improve their contribution records; policies to redirect resources within the pension system, including for survivors and after divorce; and ways of boosting women’s pensions with resources from outside the pension system. |
| JEL: | J16 J32 H55 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:101237&r=all |
| By: | Lee, Jaejoon |
| Abstract: | - Korea is aging at a faster pace than any other major country, and the negative impact on the economy is expected to be considerable. - In thirty years, the old-age dependency ratio is projected to exceed 70% and GDP growth to mark around the 1% range. This would pose a tremendous threat to sustainability unless the economy makes significant improvements in productivity and the employment structure. - Korea's population aging is proceeding at an unprecedentedly rapid pace while policy responses and institutional reforms fail to keep pace. - Setbacks such as falling labor supply and growth seem to be unredeemable even if Korea's labor force participation rate (by gender and age group) improves to the level of advanced countries. - The labor supply policy to boost the economic participation of the working age population may work as a feasible response to the challenges of population aging to a certain extent. However, it is not enough to make a full recovery given the severe imbalance of Korea's demographic profile. - Policy responses should be focused on reversing the quantitative decline in the labor supply by promoting the participation of the senior labor force while pushing towards the ultimate goal of human capital advancement and higher labor force productivity. - Senior labor force participation can be effective in easing not only the fall in economic growth but also the pressure from the rising dependency ratio. - At the same time, concerted policy efforts should be made in enhancing the general environment including educational and vocational training programs that could upgrade the productivity of the senior population. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kdifor:273&r=all |
| By: | Moser, Christian; Olea de Souza e Silva, Pedro |
| Abstract: | Abstract We study optimal savings policies when there is a dual concern about undersaving for retirement and income inequality. Agents differ in present bias and earnings ability, both unobservable to a planner with paternalistic and redistributive motives. We characterize the solution to this two-dimensional screening problem and provide a decentralization using realistic policy instruments: mandatory savings at low incomes but a choice between subsidized savings vehicles at high incomes—resembling Social Security, 401(k), and IRA accounts in the US. Offering more savings choice at higher incomes facilitates redistribution. To solve large-scale versions of this problem numerically, we propose a general, computationally stable, and efficient active-set algorithm. Relative to the current US retirement system, we find significant welfare gains from increasing mandatory savings and limiting savings choice at low incomes. |
| Keywords: | Optimal Taxation, Multidimensional Screening, Present Bias, Preference Heterogeneity, Paternalism, Retirement, Savings, Social Security, Active-Set Algorithm |
| JEL: | E6 E60 E62 H2 H20 H21 H23 H24 H5 H55 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95383&r=all |
| By: | Shah Goda, Gopi (Stanford University); Levy, Matthew R. (London School of Economics); Flaherty Manchester, Colleen (University of Minnesota); Sojourner, Aaron J. (University of Minnesota); Tasoff, Joshua (Claremont Graduate University) |
| Abstract: | Defaults have been shown to have a powerful effect on retirement saving behavior yet there is limited research on who is most affected by defaults and whether this varies based on features of the choice environment. Using administrative data on employer-sponsored retirement accounts linked to survey data, we estimate the relationship between retirement saving choices and individual characteristics – long-term discounting, present bias, financial literacy, and exponential growth bias – under two distinct choice environments: an opt-in regime and an auto-enrollment regime. Consistent with our conceptual model, we find that the determinants of following the default and contribution behavior are regime-specific. Under the opt-in regime, financial literacy plays an important role in predicting total contributions, active saving choices, and maxing out contributions in the tax-preferred account. In contrast, under the auto-enrollment regime, present bias is the most significant behavioral predictor of contribution behavior. A causal interpretation of the estimates suggests that auto-enrollment increases saving primarily among those with low financial literacy. |
| Keywords: | present bias, exponential-growth bias, household finance, retirement saving decisions, choice architecture, defaults, financial literacy, procrastination |
| JEL: | D91 J26 J32 D14 M52 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12497&r=all |
| By: | Victor Lyashok (National Research University Higher School of Economics) |
| Abstract: | This paper examines the impact of the 34% increase in pensions in Russia at the end of 2009 and the beginning of 2010 on the labor market participation of pensioners. Several particular features of the pension system in Russia allow us to estimate the net effect of income from such a reform. For evaluation, we used a method combining difference-in-difference and regression discontinuity methods. The results showed that real pension growth by a third reduced labor force participation rate by 6–7.1% for men and by 6–6.4% for women. The heterogeneity of the impact of this reform was also investigated. Estimates showed that the effect was lower for more educated people or those living in villages and was completely absent among those who rated their health as poor or very bad |
| Keywords: | pension system, labor force participation, Russia, social security |
| JEL: | H55 J21 J26 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:22/psp/2019&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 dietrelated health outcomes across different segments of the U.S. population. |
| Keywords: | Food Consumption/Nutrition/Food Safety, Health Economics and Policy |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersib:291930&r=all |
| By: | Costa-Font, Joan; Jiménez-Martínez, Sergi; Vilaplana, Cristina |
| Abstract: | We use quasi-experimental evidence on the expansion of the public subsidization of long-term care to examine the causal effect of a change in caregiving affordability on the delivery of hospital care. More specifically, we examine a reform that both introduced a new caregiving allowance and expanded the availability of publicly funded home care services, on both hospital admissions (both on the internal and external margin) and length of stay. We find robust evidence of a reduction in both hospital admissions and utilization among both those receiving a caregiving allowance and, albeit less intensely, among beneficiaries of publicly funded home care, which amounts to 11% of total healthcare costs. These effects were stronger when regions had an operative regional health and social care coordination plan in place. Consistently, a subsequent reduction in the subsidy, five years after its implementation, is found to significantly attenuate such effects. We investigate a number of potential mechanisms, and show a number of falsification and robustness checks |
| Keywords: | Hospital admissions; Hospital utilization; Long-term care reform; Bed-blocking; Poisson hurdle model; Spain |
| JEL: | H53 I18 J14 |
| Date: | 2018–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:86651&r=all |