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on Economics of Ageing |
| By: | Etgeton, Stefan (Federal Ministry of Labor and Social Affairs (BMAS), Germany); Fischer, Björn (DIW Berlin); Ye, Han (University of Mannheim) |
| Abstract: | Facing a reduction in pension generosity, individuals can compensate the loss by working longer or saving more. This paper shows that the impact of changes in pension generosity on saving crucially depends on the possibility of prolonging future employment. Exploiting across cohort variation in expected pension wealth induced by a 3-year lift in early retirement age for women born after 1951 in Germany, we show evidence of a reduction in private savings rate and an increase in leisure consumptions in case of strong responses in future labor earnings. |
| Keywords: | pension reform, early retirement age, savings, pension wealth |
| JEL: | D14 J14 J26 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12744&r=all |
| By: | Picchio, Matteo; van Ours, Jan C. |
| Abstract: | We study the retirement effects on mental health using a fuzzy regression discontinuity design based on the eligibility age to the state pension in the Netherlands. We find that the mental effects are heterogeneous by gender and marital status. Retirement of partnered men positively affects mental health of both themselves and their partners. Single men retiring experience a drop in mental health. Female retirement has hardly any effect on their own mental health or the mental health of their partners. Part of the effects seem to be driven by loneliness after retirement. |
| Keywords: | Retirement,health,well-being,happiness,regression discontinuity design |
| JEL: | H55 J14 J26 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:426&r=all |
| By: | Ramsay, Julie; Minton, Jonathan; Fischbacher, Colin; Fenton, Lynda; Kaye-Bardgett, Maria; Wyper, Grant Mark Andrew; Richardson, Elizabeth; McCartney, Gerry |
| Abstract: | Background Annual gains in life expectancy in Scotland were slower in recent years than in the previous two decades. This analysis investigates how deaths in different age groups and from different causes have contributed to annual average change in life expectancy across two time periods: 2000-02 to 2012-14 and 2012-14 to 2015-17. Methods Life expectancy at birth was calculated from death and population counts, disaggregated by five-year age-group and by underlying cause of death. Arriaga’s method of life expectancy decomposition was applied to produce estimates of the contribution of different age-groups and underlying causes to changes in life expectancy at birth for the two periods. Findings Average annual life expectancy gains between 2012-14 to 2015-17 were markedly smaller than in the earlier period. Almost all age-groups saw worsening mortality trends, which deteriorated for most cause of death groups between 2012-14 and 2015-17. In particular, the previously observed substantial life expectancy gains due to reductions in mortality from circulatory causes, which most benefited those aged 55-84 years, more than halved. Mortality rates for those aged 30-54 years and 90+ years worsened, due in large part to increases in drug-related deaths, and dementia and Alzheimer’s disease respectively. Interpretation Future research should seek to explain the changes in mortality trends for all age-groups and causes. More investigation is required to establish to what extent shortcomings in the social security system and public services may be contributing to the adverse trends and preventing mitigation of the impact of other contributing factors, such as influenza outbreaks. |
| Date: | 2019–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:q8rme&r=all |
| By: | Amin, Vikesh; Flores, Carlos A; Flores-Lagunes, Alfonso |
| Abstract: | We examine the relationship between BMI and mental health for young adults and elderly individuals using data from the National Longitudinal Study of Adolescent Health and the Health & Retirement Study. While OLS estimates show that BMI is significantly associated with worse mental health in both young adulthood and old age, they are likely to be confounded by (i) unobserved factors that affect both BMI and mental health and (ii) reverse causality. To tackle confounding, we take two complementary approaches. First, we use a polygenic score for BMI as an IV and adjust for polygenic scores for other factors that may invalidate this IV. The IV estimates indicate that there is no statistically significant relationship between BMI and mental health for young adults, whereas there is a positive and statistically significant relationship for the elderly. Moreover, we show that IV estimates likely have to be interpreted as identifying a weighted average of effects of BMI on mental health mostly for individuals on the upper quantiles of the BMI distribution. Given potential remaining concerns about the validity of the IV, our second approach is to consider it an “imperfect” IV and estimate an upper bound on the average treatment effect for the corresponding population following Nevo & Rosen (2012). The estimated upper bounds reinforce the conclusions from the IV estimates: they show little evidence of a detrimental effect of BMI on mental health for young adults while being consistent with an economically meaningful effect for elderly individuals. Lastly, we explore some of the potential channels through which BMI may affect mental health for the elderly. |
| Date: | 2019–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:p6c3g&r=all |
| By: | Li, Yaxi (Duke Kunshan University); Xue, Qian-Li (John Hopkins University, Baltimore); Odden, Michelle C. (Stanford University); Chen, Xi (Yale University); Wu, Chenkai (Duke Kunshan University) |
| Abstract: | Exposures in childhood and adolescence may impact the development of diseases and symptoms in late life. However, evidence from low- and middle- income countries is scarce. In this study, we examined the association of early life risk factors with frailty among older adults using a large, nationally representative cohort of community-dwelling Chinese sample. 6,806 participants aged ≥60 years from the China Health and Retirement Longitudinal Study were included. We measured 13 risk factors in childhood or adolescence through self-reports, encompassing six dimensions (education, family economic status, nutritional status, domestic violence, neighborhood, and health). We used multinomial regression models to examine the association between risk factors and frailty and further calculated the absolute risk difference for the statistically significant factors. Results show that worse health condition in childhood and unfavorable childhood and adolescent socioeconomic status as measured by educational attainment and neighborhood quality may increase the risk of late-life frailty among Chinese older adults. Severe starvation in childhood was associated with higher risk of prefrailty. The risk differences of being frail were 5.7% lower for persons with a high school or above education, 1.5% lower for those whose fathers were literate, 4.8% lower for the highest neighborhood quality, and 2.9% higher for worse childhood health status compared to their counterparts. |
| Keywords: | early life environments, life course health, physical health, frailty, aging, China |
| JEL: | I10 I14 I18 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12764&r=all |
| By: | Ioannis Laliotis; Mujaheed Shaikh; Charitini Stavropoulou; Dimitrios Kourouklis |
| Abstract: | We examine the impact of own and spousal retirement on household expenditure during a period of financial deterioration. We use detailed household data covering the period 2009- 2016 in Greece, during which the country experienced a severe financial crisis that affectedretirees in ways that were not anticipated. Similar to Moreau and Stancanelli (2015) our empirical strategy allows for the household expenditure to depend on both own and spousalretirement status. We employ an instrumental variable identification strategy by exploiting variation coming from the early retirement age threshold. Our Two-Stage Least Squaresestimates show that, even after controlling for income, total expenditure drops significantly when the husband retires and as he becomes older. The reduction is stronger in 2010, when the first wave of austerity plans, including measures affecting pensioners were announced, and after 2014 when horizontal pension cuts were implemented. Expenditure does not change significantly when the wife retire neither the older she gets. A drop-in expenditure for clothing, transport, housing and communication drives the overall reduction in expenditure. Overall, our results can have significant policy implications in the design of structural pension reforms in a period of financial hardship. |
| Keywords: | Retirement, Household Expenditure, Crisis, Greece |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hel:greese:137&r=all |
| By: | Charles Yuji Horioka (Research Institute for Economics and Business Administration, Kobe University, Osaka University, Asian Growth Research Institute, and National Bureau of Economic Research); Yoko Niimi (Doshisha University and Asian Growth Research Institute) |
| Abstract: | In this paper, we analyze the borrowing behavior of Japanese households in comparison to the other Group of Seven (G7) countries and also broken down by the age group of the household head. We find that pre-retirement households (households with a head in the 50-59 age group) in Japan do not have inordinate amounts of debt and that their financial health is satisfactory. However, we also find that households with a head in the 30-39 age group have shown a sharp increase in debt holdings in recent years, due partly to the fact that tax breaks for housing purchase, reforms in the housing loan market since the early 2000s, and expansionary monetary policy enabled Japanese households to purchase housing at a younger age than they could previously. We therefore need to monitor the borrowing behavior of this cohort over time as the Bank of Japan normalizes its monetary policy, especially since households have become more vulnerable to rising interest rates as the share of households who have chosen variablerate housing loans has increased in recent years. |
| Keywords: | Aging, Borrowing, Debt, Households, Housing, Japan, Liabilities, Loans, Retirement |
| JEL: | D14 E21 J14 R21 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2019-23&r=all |
| By: | Anne G. Balter (Tilburg University and Netspar); Malene Kallestrup-Lamb (Aarhus University, PeRCent and CREATES); Jesper Rangvid (Copenhagen Business School and PeRCent) |
| Abstract: | This paper models the impact of unanticipated changes in forecasted life expectancies on guaranteed and unguaranteed pension products. We study a unique data set containing individuals offered the opportunity to substitute a guaranteed pension product with relatively low levels of risk to an unguaranteed product with a higher degree of financial and longevity risk. The complexity of the products and the increase in the level of financial literacy required by the individual to make such a decision motivate the need to properly model the most important drivers that characterize the differences between guaranteed and unguaranteed pension products. This is done within the standard Merton, Black and Scholes framework and we find a clear tradeoff between financial risk and longevity risk in terms of their effect on future pension payments. We find that unguaranteed pension products allow for more financial risk-taking and thus higher expected returns. However, unexpected longevity shocks can reduce pension payments in unguaranteed pension products to a lower level relative to guaranteed products. |
| Keywords: | Macro longevity risk, Variable annuities, Guarantee, Unguarantee |
| JEL: | J32 J11 J17 G22 |
| Date: | 2019–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:aah:create:2019-22&r=all |
| By: | Asen Ivanov (Queen Mary University of London) |
| Abstract: | What is the optimal default contribution rate or default asset allocation in pension plans? Could active decision (i.e., not setting a default and forcing employees to make a decision) be optimal? These questions are studied in a model in which each employee is biased regarding her optimal contribution rate or asset allocation. In this model, active decision is never optimal and the optimal default is, depending on parameter values, one of three defaults. The paper also explores how the parameters affect the optimal default and the total loss in the population at the optimal default. |
| Keywords: | optimal defaults, libertarian paternalism, nudging, pension plan design |
| JEL: | D14 D91 J26 J32 |
| Date: | 2019–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:893&r=all |
| By: | Liu, Tong; Gietel-Basten, Stuart |
| Abstract: | Drug abuse is a critical issue impairing social welfare in many societies. This study explores the demographic characteristics of drug abuse among sub-populations in Hong Kong as a developed and ageing society with large socioeconomic disparities. Significant changes in both the number and rate of drug abuse by drug type, age, gender, ethnicity, education and economic activity are documented during 1991 to 2016. Although narcotics analgesics is more common, stimulants and Ketamine are growing popular in Hong Kong, especially among the youth. The number of elderly drug abusers is increasing due to the ageing population, whereas the rate of elderly drug abuse is actually stable or decreasing. In contrast, drug abuse rate is increasing for the middle-aged and for groups with lower education. The findings support social policy design to curb drug abuse, and call for closer attention to these at-risk groups that are overlooked in Hong Kong. |
| Date: | 2019–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:qm4vp&r=all |
| By: | Cimentada, Jorge; Klüsener, Sebastian; Riffe, Tim |
| Abstract: | Lexis surfaces are widely used to analyze demographic trends across periods, ages, and birth cohorts. When used to visualize rates or similar, these plots usually do not convey information about population size. The failure to communicate population size in Lexis surfaces can lead to misinterpretations of the mortality conditions populations face because, for example, high mortality rates at very high ages have historically been experienced by only a small proportion of a population or cohort. We propose enhanced Lexis surfaces that include a visual representation of population size. The examples we present demonstrate how such plots can give readers a more intuitive understanding of the demographic development of a population over time. Visualizations are implemented using an R-Shiny application, building upon perception theories. We present example plots for enhanced Lexis surfaces that show trends in cohort mortality and first-order differences in cohort mortality developments. These plots illustrate how adding the cohort size dimension allows us to extend the analytical potential of standard Lexis surfaces. Our enhanced Lexis surfaces improve conventional depictions of period, age, and cohort trends in demographic developments of populations and cohorts. An online interactive visualization tool based on Human Mortality Database data allows users to generate and export enhanced Lexis surfaces for their research. The R code to generate the application (and a link to the deployed application) can be accessed at https://github.com/cimentadaj/lexis_plot . |
| Date: | 2019–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:hxy7d&r=all |
| By: | Lai, Audrey F.; Noymer, Andrew; Tai, Tsuio |
| Abstract: | We introduce convex hulls as a data visualization and analytic tool for demography. Convex hulls are widely used in computer science, and have been applied in fields such as ecology, but are heretofore underutilized in population studies. We briefly discuss convex hulls, then we show how they may profitably be applied to demography. We do this through three examples, drawn from the relationship between child mortality and adult survivorship (5q0 and 45p15 in life table notation). The three examples are: (i) sex differences in mortality; (ii) period and cohort differences and (iii) outlier identification. Convex hulls can be useful in robust compilation of demographic databases. Moreover, the gap/lag framework for sex differences or period/cohort differences is more complex when mortality data are arrayed by two components as opposed to a unidimensional measure such as life expectancy. Our examples show how, in certain cases, convex hulls can identify patterns in demographic data more readily than other techniques. The potential applicability of convex hulls in population studies goes beyond mortality. |
| Date: | 2019–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:szxvx&r=all |
| By: | 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); Quitterie Roquebert (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) |
| Keywords: | Long term care,Informal,Formal care |
| Date: | 2019–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-02370689&r=all |
| By: | Vanhoutte, Bram |
| Abstract: | Objectives Ageing in the public eye can be distilled to a limited number of adverse events, such as loss of health, partnership and wealth. While these events are a constitutive part of “normal ageing”, they do not occur uniformly at the same time point in the life course. This study investigates to what extent bereavement, functional health loss and onset of poverty are adequate markers of ageing, and illustrates inequalities in their timing according to cohort, gender, class and ethnicity. Methods Data of the English Longitudinal Study of Ageing (ELSA), collected over 7 waves (2002-2016) (n=7913) are examined using survival analysis. Results Persistent associations of manual or routine occupational class and belonging to an ethnic minorities are found with increased hazards of health loss, bereavement and wealth loss. Later born cohorts have higher health loss hazards as well as lower hazards for wealth loss, while earlier born cohorts have lower hazards for bereavement. Gender effects are pronounced in terms of bereavement, limited in terms of health loss and absent in terms of wealth loss. Discussion The timing of adverse events is a crucial gateway through which existing social inequalities are transferred into unequal ageing pathways. |
| Date: | 2019–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:xqjwv&r=all |
| By: | Federico Barbiellini Amidei (Bank of Italy); Matteo Gomellini (Bank of Italy); Paolo Piselli (Bank of Italy) |
| Abstract: | This paper examines the contribution of demography to economic growth in Italy by comparing the country’s past, present and future. We use an accounting framework to decompose GDP and per capita GDP growth, and we show how changes in the age structure of the population produced a positive demographic dividend in the past. By contrast, in the last twenty-five years and arguably in the future, demography has made and will continue to make a direct negative contribution to economic growth. Expected migration flows will noticeably limit the extent of this negative contribution, but they will not be able to reverse its sign. We analyze three possible developments, potentially driven by demography itself or fostered by policy actions –longer working lives, an increase in female labour market participation and higher education levels – which could counteract the pure negative accounting effects produced by the evolution of the age structure. |
| Keywords: | economic history, demography, demographic dividend, forecasts |
| JEL: | J11 N30 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_431_18&r=all |
| By: | Gee Hee HONG; OGURA Yoshiaki; SAITO Yukiko |
| Abstract: | This paper examines how unprecedented population aging affects firm dynamics in Japan, using the panel data from 2007 to 2016. Our analysis confirms that during this time, average firm age increased due to low rates of firm entry and exit. Average age of CEOs also increased with population aging and low turnover of CEOs. Aging of firms and CEOs is more salient in rural areas than urban areas. Furthermore, as voluntary firm exits are positively correlated with the age of CEOs, more exits are likely to occur as population aging intensifies. In rural areas, low density of firms may imply higher search costs in finding new transaction partners. Firm exit induced by exit of transaction partners is more likely to happen for rural areas. Our results suggest that policies aimed at supporting business succession and addressing increases in voluntary exists should cater to the lifecycle of firms as well as the geographic location of firms. |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:polidp:19031&r=all |
| By: | Gassmann, Franziska (UNU-MERIT and SBE, Maastricht University); Martorano, Bruno (UNU-MERIT and SBE, Maastricht University) |
| Abstract: | During the twentieth century, welfare states were instrumental in confining economic and social inequalities in Europe. Stepping into the twenty-first century, labour market risks have transformed. The unprecedented technological transformation has changed the way we work. The trend towards new forms of employment is no longer a marginal phenomenon. People switch between jobs, type of employment or (temporarily) leave the labour force. Across OECD countries, 16% of workers are self-employed and another 13% are on temporary employment contracts (OECD, 2018b). Employment became more precarious and labour market relations much more diverse. This raises the question how societies can take on the opportunities, challenges and risks that the rapid technological development may bring. The changing nature of work along with other challenges, such as demographic ageing, changes in family structures, globalisation of trade, or migration necessitates adaptations to the welfare state in order for it to continue functioning effectively and efficiently. This paper reviews the challenges for universal social protection in a rapidly changing world of work and discusses policy options for social protection systems that protect and stimulate human development. We first review current trends and predictions as to how the future of work might look like. New types of jobs and forms of employment are already on the rise, which has effects for individual workers and society. We then discuss the implications for social protection and the welfare state. The changing nature of risks associated with new forms of employment may require a redesign of current social protection systems. The discussion provides possible solutions and country examples on changes in social protection systems and financing strategies, including reforms of current social insurance schemes, social assistance programmes and active labour market policies. |
| Keywords: | non-standard employment, social protection, welfare states, Europe |
| JEL: | H55 I38 J21 O15 |
| Date: | 2019–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019039&r=all |
| By: | Antoine Bozio (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); Thomas Breda (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); Julien Grenet (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: | We study the earnings responses to three large increases in employer Social Security contributions (SSCs) in France. We find evidence of full pass-through to workers in the case of a strong and salient relationship between contributions and expected benefits. By contrast, we find limited pass-through of employer SSCs to wages for reforms that increased SSCs with no tax-benefit linkage. Together with a meta-analysis of the literature, we interpret these results as evidence that tax-benefit linkage and its salience matter for incidence, a claim long made by the literature but not backed by direct empirical evidence to date. |
| Keywords: | Tax- Benefit Linkage,Social Security Contributions,Tax Incidence,Payroll Tax |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02191315&r=all |