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on Economics of Ageing |
| By: | Arno Baurin (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Jean Hindriks (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE)) |
| Abstract: | In this article, we analyze the Belgium pension financing in retrospect for the period 1995-2017 and then we provide a prospective analysis based on the demographic and economic projections of the Federal Plan Bureau. In the retrospective part, we point out the growing importance of alternative financing relative to the social security contributions. The decomposition of the public pension growth over the last decade between the average pension and the number of retirees shows that three quarters of the growth is due to the increase of the average pension. In the prospective part, we simulate the contributions and pension benefits required to balance the budget, based on different rules: Defined Contribution, Defined Benefit and the Musgrave rule (keeping constant the ratio of pension benefit to wage net of contributions). We then simulate pension adjustment via the "individual retirement account" (IRA) as proposed in Devolder (2019) and Devolder & Hindriks 2019). Under the IRA, the adjustment variables are the accrual rate (which determines the new pension claims) and the indexation rate (which determines the past pension claims). Combining those adjustment variables, our simulations show that it is possible to protect past pension claims and ensure budget balance on a yearly basis. We propose a rule of adjustment so as to equate, year by year, the replacement rate across retirees of different ages. |
| Keywords: | social security, pension, retirement, ageing |
| JEL: | H55 J11 J14 J26 |
| Date: | 2020–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2020002&r=all |
| By: | Chen, Xi (Yale University); Hu, Lipeng (Peking University); Sindelar, Jody L. (Yale University) |
| Abstract: | China's recently implemented New Rural Pension Scheme (NRPS), the largest social pension program in the world, was designed to provide financial protection for its rural population and reduce economic inequities. Yet the impact of this program is mitigated if those eligible fail to enroll. This paper examines the extent to which pension-eligible individuals, and their families, make optimal pension decisions. Families are involved in the NRPS decisions because, in most cases, adult children need to enroll as a prerequisite of their parents' receipt of benefits. We examine the decisions of both those eligible for pension benefits (i.e. over 60 years old) and their adult children. We use the rural sample of the 2012 China Family Panel Studies to study determinants of the decision to enroll in NRPS, premiums paid, and time taken to enroll.We find evidence of low and suboptimal pension enrollment by eligible individuals and their families. Suboptimal enrollment takes various forms including failure to switch from the dominated default pension program to NRPS and evidence that families do not make mutually beneficial intra-family decisions. For the older cohort, few individual and family characteristics are significant in enrollment decisions, but village characteristics play an important role. For the younger cohort, more individual-level characteristics are significant, including own and children's education. Village characteristics are important but not as much as for the older cohort. Our finding of suboptimal enrollment is important as it highlights the need for policies to improve enrollment. This paper provides needed information on the extent of the factors relating to suboptimal enrollment. |
| Keywords: | social pension, suboptimal choices, intra-family decisions, intergenerational arrangements, Family Binding Policy, default option |
| JEL: | J14 J18 R23 R28 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12843&r=all |
| By: | Whelan, Stephen; Atalay, Kadir; Hayward, Richard Donald (Australian Housing and Urban Research Institute (AHURI)) |
| Abstract: | This study examined how Australia’s tax and transfer system, especially in relation to the Age Pension, impacts on household retirement choices. As the population ages, fiscal challenges created when many individuals retire from working and paying tax to drawing government funded benefits and services present some stark policy choices. Understanding how retirement decisions are shaped by the tax and transfer system is essential to developing a system that allocates resources efficiently across the economy, is consistent with principles of equity and is sustainable. Any such tax system is likely to have important implications for housing choices and housing markets. |
| Date: | 2018–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:akj8w&r=all |
| By: | Escarce, José J. (University of California, Los Angeles); Rocco, Lorenzo (University of Padova) |
| Abstract: | To our knowledge, no study has examined the effect of immigration on the health of older natives. We use the Study of Health, Ageing and Retirement in Europe (SHARE) to investigate whether immigration affects depression among natives 65-80 years old. Immigration may increase the supply and lower the price of personal and household services, a term that refers to care services and non-care services such as cleaning, meal preparation, and domestic chores. Higher consumption of personal and household services by older natives may help maintain health through a variety of pathways including reduced loneliness, greater participation in meaningful social activities, and improved physical functioning. Using a shift-share IV, we find a beneficial effect of immigration on reducing the number of depression symptoms and the probability of clinically significant depression among older natives. We also find some evidence for the hypothesized mechanisms, although our ability to come to definitive conclusions about mechanisms is limited in our data. |
| Keywords: | health, immigration, aging, social determinants |
| JEL: | I12 I14 J61 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12829&r=all |
| By: | Hippolyte d'Albis (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); Carole Bonnet (INED - Institut national d'études démographiques); Xavier Chojnicki (LEM - Lille économie management - LEM - UMR 9221 - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Najat El Mekkaouide Freitas (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Angela Greulich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, INED - Institut national d'études démographiques); Jérôme Hubert (LEM - Lille économie management - LEM - UMR 9221 - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Julien Navaux (uOttawa - University of Ottawa [Ottawa]) |
| Abstract: | This article provides a comprehensive overview of how the funding of consumption at different ages is shared between the State, the individual and the family. By applying the National Transfer Accounts method for France, we developed a unique database to analyze how the funding of consumption is secured at each age, how its structure has changed over time, and how the consumption is financed in France compared to that of a set of other developed countries. We find that the elderly in France finance themselves increasingly by their own means, even though public funding of this age group remains significant in France in comparison to other countries. Conversely, the young rely more and more on the State to finance their consumption. Within our sample, France is the country where the young benefited most from public transfers. |
| Keywords: | Generational Economy,National Transfer Accounts,Inter- Generational Equity,Private and Public Consumption |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01799724&r=all |
| By: | Jong-Wha Lee; Do Won Kwak; Eunbi Song |
| Abstract: | This study examines how aging affects labor productivity using industry-level data of Japan and Korea. The analysis shows that, for both Japan and Korea, aging has positive effects on labor productivity when older workers are working in industries with a large share of information and communication technology (ICT) in the capital stock. We also find that, on average, older workers exert positive effects on labor productivity across all industries when they are low-educated in Japan and high-educated in Korea. In addition, a complementary effect between ICT capital and older workers is observed for both high- and low-educated workers in Japan but only for low-educated workers in Korea. We discuss the interplay among educational attainment, industry characteristics, and production techniques to explain the differences between the two countries in the productivity of their older workers. |
| Keywords: | aging, ICT capital, productivity, Japan, Korea |
| JEL: | J11 J14 O41 O47 O53 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-01&r=all |
| By: | Rosero-Bixby, Luis; Jiménez-Fontana, Pamela |
| Abstract: | El presente documento cuenta con 4 grandes secciones: i) Antecedentes. Costa Rica experimenta un acelerado proceso de envejecimiento poblacional. Entre el 2018 y 2080, las personas mayores de 64 años pasarán de representar 8% a un 29% del total de población. Este acelerado proceso de envejecimiento plantea retos en el financiamiento para las finanzas públicas, especialmente para el sector de salud y el sistema de pensiones. ii) Objetivo. En esta investigación se estiman las cuentas nacionales de transferencias de Costa Rica, con el fin de construir el ciclo económico vital y los bonos demográficos en salud, pensiones, y educación. iii) Metodología. Se utilizan las Encuestas de Ingresos y Gastos y las Cuentas Nacionales para aplicar la metodología del proyecto internacional National Transfer Accounts. Y por último iv) Resultados. El Estado costarricense es crucial en el financiamiento del déficit del ciclo vital de las personas adultas mayores. La sostenibilidad del sistema de transferencias públicas costarricense que utilizan los impuestos y cargas sociales para financiar la educación, la salud y las pensiones, está sujeta en gran medida a la demografía. |
| Keywords: | DINAMICA DE LA POBLACION, PROMEDIO DE VIDA, ASPECTOS ECONOMICOS, ENVEJECIMIENTO, CALIDAD DE LA VIDA, SEGURIDAD SOCIAL, INGRESOS, SALUD, PENSIONES, EDUCACION, CUENTAS NACIONALES, GASTOS PUBLICOS, POPULATION DYNAMICS, LIFE EXPECTANCY, ECONOMIC ASPECTS, AGEING, QUALITY OF LIFE, SOCIAL SECURITY, INCOME, HEALTH, PENSIONS, EDUCATION, NATIONAL ACCOUNTS, PUBLIC EXPENDITURES |
| Date: | 2019–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col045:45049&r=all |
| By: | Liebersohn, Carl (Ohio State U); Packard, Heidi (U of Michigan) |
| Abstract: | CEO turnover is highly pro-cyclical. This paper aims to explain why. We begin by showing that the cyclicality is driven almost entirely by executives of retirement age. We further provide evidence that executives time their retirement to maximize the value of their pensions. Since CEO pay is pro-cyclical and pensions are based on pay in the final years of tenure, executives have the incentive to retire when the economy is doing well. Cyclicality is particular strong in firms with strong corporate governance, which suggests that retirement cyclicality is a tool firms use to constrain CEO behavior. |
| JEL: | J26 M12 M51 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ohidic:2019-32&r=all |
| By: | Charles Yuji Horioka; Yoko Niimi |
| Abstract: | This paper shows, using data from the Family Income and Expenditure Survey, that housing credit has become increasingly available over time in Japan, especially since 2000, and that this has made it easier for Japanese households to purchase housing and enabled them to do so at an earlier age. However, it also shows that the greater availability of housing credit has increased households’ housing loan repayment burden, which has resulted in their cutting back on their other consumption expenditures and created the potential for retirement insecurity. Another concern is that the increasing availability of housing credit has been accompanied by a pronounced shift from fixed-rate to variable-rate housing loans. This is cause for concern given the low level of financial literacy that prevails among the Japanese population and the likelihood that interest rates on variable-rate housing loans will be raised sooner or later as monetary policy is tightened. |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1075&r=all |
| By: | Hong Li (NKU - Nankai University); Yang Lu (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper proposes a Bayesian non-parametric mortality model for a small population, when a benchmark mortality table is also available and serves as part of the prior information. In particular, we extend the Poisson-gamma model of Hardy and Panjer to incorporate correlated and age-specific mortality coefficients. These coefficients, which measure the difference in mortality levels between the small and the benchmark population, follow an age-indexed autoregressive gamma process, and can be stochastically extrapolated to ages where the small population has no historical exposure. Our model substantially improves the computation efficiency of existing two-population Bayesian mortality models by allowing for closed form posterior mean and variance of the future number of deaths, and an efficient sampling algorithm for the entire posterior distribution. We illustrate the proposed model with a life insurance portfolio from a French insurance company. |
| Keywords: | two-population mortality model,Autoregressive gamma,credibility,parameter uncertainty |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02419000&r=all |
| By: | Schmertmann, Carl (Florida State University); Gonzaga, Marcos Roberto |
| Abstract: | We develop a Bayesian regression model for small-area mortality schedules that simultaneously addresses the problems of small local samples and underreporting of deaths. We combine a relational model for mortality schedules with probabilistic prior information on death registration coverage – derived from demographic estimation techniques such as Death Distribution Methods, and from field audits done by public health experts. We test the model on small-area data from Brazil. Incorporating external estimates of vital registration coverage though priors improves small-area mortality estimates by accounting for under-registration, and by automatically producing measures of uncertainty. |
| Date: | 2018–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:syzwx&r=all |
| By: | Mason, Richard (Tilburg University, School of Economics and Management) |
| Abstract: | Increasingly, U.S. employees are being asked to assume responsibility for saving for retirement through employer-sponsored 401(k) retirement plans. Unfortunately, a large share of Americans are under-saving, and expected to be unprepared for retirement. Recent work from behavioral scientists provides evidence that choice architecture and default effects can play a powerful role in improving retirement savings choices. Despite employees’ frequent use of digital devices to make initial enrollment decisions, there is a comparative lack of evidence regarding the impacts of digital design interfaces on retirement choices. This thesis presents new evidence from three large-scale field studies which document how employees respond to aggressive plan defaults, and small scale changes to the design of online enrollment interfaces. Chapter 1 presents evidence that aggressively set defaults (7% to 10%) result in increased contribution rates, without decreasing employee enrollment, relative to conventional (6%) default rates. Chapter 2 documents that higher planned escalator rates (of 2% or 3%) increase contribution rates, without adversely impacting enrollment. Finally, Chapter 3 presents evidence that employees’ initial enrollment decisions may be heavily influenced by non-economic features, including the use of visual elements like color, the standardization of language, and the salience of previously disclosed plan details. The studies in this thesis identify three distinct strategies that policymakers and employers can use to encourage higher savings. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:58639618-e34e-4b5c-8c8c-abb4c6c286bb&r=all |
| By: | Abrigo, Michael R.M. (Philippine Institute for Development Studies); Halliday, Timothy J. (University of Hawaii at Manoa); Molina, Teresa (University of Hawaii at Manoa) |
| Abstract: | This paper evaluates a Filipino policy that expanded health insurance coverage of its senior citizens, aged 60 and older, in 2014. Using regression discontinuity and difference-in-differences methods, we find that the expansion increases insurance coverage by approximately 16 percentage points. We show that the compliers, those induced by the policy to obtain insurance, are disproportionately female and largely from the middle of the socioeconomic distribution. Instrumental variables estimates indicate that out-of-pocket medical expenditures more than double among the compliers. We argue that this is most likely driven by an outward shift in the medical demand curve. |
| Keywords: | insurance, medical demand, compliers, Philippines |
| JEL: | I10 I13 I14 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12827&r=all |
| By: | Comelatto, Pablo |
| Abstract: | Se presentan los principales resultados de la estimación de las Cuentas Nacionales de Transferencia (CNT) para la Argentina, en el año 2016. El análisis incluye estimaciones por nivel socioeconómico. La metodología CNT permite cuantificar el peso de las transferencias públicas en la financiación de los déficits de los grupos de edad en los extremos del ciclo vital. Dada la historia demográfica del país, la cohorte nacida entre 1970 y 1990 revierte la caída en la razón de sostenimiento del consumo que se observa entre 1950 y 1990. Cuando los integrantes de la cohorte empiezan a alcanzar las edades económicamente productivas, inicia la ventana de oportunidad demográfica que la Argentina está atravesando actualmente. |
| Keywords: | GASTOS PUBLICOS, SEGURIDAD SOCIAL, INGRESOS, ASPECTOS DEMOGRAFICOS, DINAMICA DE LA POBLACION, GRUPOS DE EDAD, CLASES SOCIALES, DISTRIBUCION DEL INGRESO, CUENTAS NACIONALES, PUBLIC EXPENDITURES, SOCIAL SECURITY, INCOME, POPULATION ASPECTS, POPULATION DYNAMICS, AGE GROUPS, SOCIAL CLASSES, INCOME DISTRIBUTION, NATIONAL ACCOUNTS |
| Date: | 2020–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col045:45058&r=all |
| By: | Olivera, Javier; Iparraguirre, Yadiraah |
| Abstract: | El presente estudio estima las Cuentas Nacionales de Transferencias (CNT) para el Perú utilizando datos del año 2014. Las CNT son desagregaciones de las cuentas nacionales por edad para un periodo determinado, lo cual permite observar los flujos de ingreso, consumo y transferencias públicas y privadas entre diversos grupos de edad. Por medio de identidades contables es posible cuantificar el monto del déficit del ciclo de vida por edades y apreciar las fuentes y grupos que lo financian. Asimismo, las CNT permiten estudiar el efecto del envejecimiento desde un punto de vista económico y demográfico. En particular, la construcción de la Tasa de Dependencia Económica con insumos de las CNT es una herramienta útil para estimar el alcance del Bono Demográfico. Una contribución importante de este estudio es presentar una metodología que facilita el uso de las CNT para explorar el riesgo que implica el cambio demográfico en el cumplimiento de los Objetivos de Desarrollo Sostenible (ODS). |
| Keywords: | CUENTAS NACIONALES, INGRESOS, DISTRIBUCION DEL INGRESO, ASPECTOS DEMOGRAFICOS, DINAMICA DE LA POBLACION, SEXO, PROYECCIONES DE POBLACION, OBJETIVOS DE DESARROLLO SOSTENIBLE, POBREZA, SALUD, TRABAJO DIGNO, NATIONAL ACCOUNTS, INCOME, INCOME DISTRIBUTION, POPULATION ASPECTS, POPULATION DYNAMICS, SEX, POPULATION PROJECTIONS, SUSTAINABLE DEVELOPMENT GOALS, POVERTY, HEALTH, DECENT WORK |
| Date: | 2020–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col045:45059&r=all |