nep-age New Economics Papers
on Economics of Ageing
Issue of 2020‒05‒25
fifteen papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Financing the Consumptionof the Young and Old in France By Hippolyte d'Albis; Carole Bonnet; Xavier Chojnicki; Najat El Mekkaoui; Angela Greulich; Jérôme Hubert; Julien Navaux
  2. Is a reference age necessary in a points pension system? By Antoine Bozio; Simon Rabaté; Audrey Rain; Maxime Tô
  3. Does retirement lead to life satisfaction? Causal evidence from fixed effect instrumental variable models By Nguyen, Ha Trong; Mitrou, Francis; Taylor, Catherine L.; Zubrick, Stephen R.
  4. The impact of demographic change on transfers of care and associated well-being By Denys Dukhovnov; Joan Ryan; Emilio Zagheni
  5. The effect of retirement on social relationships: new evidence from SHARE. By Simona Lorena Comi; Elena Cottini; Claudio Lucifora
  6. Pension d’un salarié du secteur privé et transitions vers un système universel de retraite par points : Etude d’impact pour une carrière complète sous plafond By Frédéric Gannon; Gilles Le Garrec; Gautier Lenfant; Vincent Touzé
  7. No Country for Young People? The Rise of Anti-immigration Populism in Ageing Societies By Dotti, Valerio
  8. Social Security Wealth, Inequality, and Lifecycle Saving By John Sabelhaus; Alice Henriques Volz
  9. Vers un système de retraite universel en points : quelles réformes pour les pensions de réversion ? By Carole Bonnet; Antoine Bozio; Julie Tréguier
  10. Reference-Dependent Preferences, Time Inconsistency, and Unfunded Pensions By Torben M. Andersen; Joydeep Bhattacharya; Qing Liu
  11. How should a points pension system be managed? By Antoine Bozio; Simon Rabaté; Audrey Rain; Maxime Tô
  12. After fall motion discrimination system using autoencoder By Ikuya Takao; Shota Chikayama; Takashi Kaburagi; Satoshi Kumagai; Toshiyuki Matsumoto; Yosuke Kurihara
  13. COVID-19: mortality, future years lost, and demographic structure: Italy and Kenya compared By Clive Bell
  14. Pensions reform: what redistributive effects are expected? By Antoine Bozio; Chloé Lallemand; Simon Rabaté; Audrey Rain
  15. The Effect of Social Distancing Measures on the Demand for Intensive Care: Evidence on COVID-19 in Scandinavia By Steffen Juranek; Floris Zoutman

  1. By: Hippolyte d'Albis (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); Carole Bonnet (INED - Institut national d'études démographiques); Xavier Chojnicki (EQUIPPE - Economie Quantitative, Intégration, Politiques Publiques et Econométrie - Université de Lille, Droit et Santé - PRES Université Lille Nord de France - Université de Lille, Sciences Humaines et Sociales - Université de Lille, Sciences et Technologies); Najat El Mekkaoui; Angela Greulich (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne); Jérôme Hubert (LEM - Lille économie management - LEM - UMR 9221 - Université de Lille - UCL - Université catholique de Lille - CNRS - Centre National de la Recherche Scientifique); Julien Navaux (uOttawa - University of Ottawa [Ottawa])
    Abstract: A better understanding of the resource allocation across ages is fundamentalto put in place welfare reforms in the context of population ageing.In times of major demographic change, the redistribution of resourcesbetween age groups and the funding of the economically inactive aged remainsa recurring topic of public debate and a major public policy concern inOECD countries. Governments search for a policy mix that will improve thequality of life of the elderly, while at the same time investing in the futureof the young and reducing the fiscal burden on the working population.Life expectancy and education requirements are increasing while budgetconstraints are tightening. This potentially creates tension in the allocationof resources between age groups (Preston 1984; Lee and Mason 2011a).By applying the methodology of National Transfer Accounts (NTA),this article analyzes for France (1) how the funding of consumption (publicand private) is secured at each age; (2) how the funding of consumptionhas changed over recent decades; and (3) how the consumption is financedcompared to that of other countries (China, Germany, Japan, Sweden,United Kingdom, and United States). We consider three sources for financingconsumption: the State (net transfers and in-kind services), individualsthemselves (income and assets), and families (inter vivos transfers, excludingbequests, following the NTA methodology) (United Nations 2013b).
    Keywords: Private and Public Consumption,Inter-Generational Equity,Generational Economy,National Transfer Accounts
    Date: 2018–12–19
  2. By: Antoine Bozio (IPP - Institut des politiques publiques, 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); Simon Rabaté (IPP - Institut des politiques publiques); Audrey Rain (IPP - Institut des politiques publiques); Maxime Tô (IPP - Institut des politiques publiques, UCL - University College of London [London], Institute for Fiscal Studies)
    Abstract: An important feature in the debate on French pensions reform is whether or not it is necessary to keep a reference retirement age in the new system. This brief aims to contribute to the debate by clarifying certain ambiguities about the concept of retirement age and by discussing the potential implications of implementing a points system. We stress the difference between the impact of reference ages in the current system – those ages changing the pension scale of the system – and implementing reference points in the new system, such points playing a useful part in informing the future pensioners. Recent economic literature has highlighted the part played by reference points in pension scales, beyond providing purely financial incentives. This would argue in favour of the new system keeping a target to which the future pensioners can refer. Rather than a single pivotal age for everyone, this brief advocates introducing a reference norm that is defined by obtaining a target replacement rate, e.g. 75 % of the last salary before retirement. Such a reference would lead to dening an individual full-pension age, adapted to each career. This would also be a return to the initial goal of a pension system, namely to maintain standard of living on retirement. Such an age reference could also be accompanied by new services for helping future pensioners prepare their retirement choices better..
    Date: 2019–06
  3. By: Nguyen, Ha Trong; Mitrou, Francis; Taylor, Catherine L.; Zubrick, Stephen R.
    Abstract: This paper presents robust evidence that retirement causally improves overall life satisfaction which is subsequently explained by improvements in satisfaction with one’s financial situation, free time, health, and participation in local community activities. Furthermore, while the positive wellbeing impact of retirement is sizable initially, it fades after the first 3 years. We find that the improvements in financial satisfaction upon retirement are only observed for low-income individuals. However, the wellbeing impact of retirement does not differ by gender, educational, occupational, economic or marital backgrounds. We also explore several potential explanations for our findings. This paper employs a fixed effect instrumental variable model, which exploits the discontinuity in the eligibility ages for state pension to construct an instrument for retirement, and 18 waves of high-quality Australian panel data. The results also suggest that failing to adequately account for the endogeneity of retirement would result in a downward-biased estimate of a positive wellbeing impact of retirement.
    Keywords: Retirement,Wellbeing,Life Satisfaction,Instrumental Variable,Age Threshold,Australia
    JEL: I31 J14 J26 H55
    Date: 2020
  4. By: Denys Dukhovnov (Max Planck Institute for Demographic Research, Rostock, Germany); Joan Ryan; Emilio Zagheni (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Objectives: This study aims to evaluate the impact of demographic change on long-term, macro-level childcare and adult care transfers, and the associated well-being effects of informal caregiving. Method: We measure the impact of demographic change on non-monetary care exchanged between different groups by estimating matrices of time transfers by age and sex, and weighting the time flows by self-reported indicators of well-being, for activities related to childcare and adult care. The analysis employs cross-sectional data from the American Time Use Survey 2011-2013, and the Panel Study of Income Dynamics, Disability and Use of Time Module 2013 to produce the estimates of well-being associated with various forms of care. Results: We show that people have more positive feelings when caring for children than when caring for adults. Although reductions in the country-level care supply are expected to be small relative to demand, future projections indicate a 17.1% decrease in the ratio of time spent caring for children under age 15 relative to time spent caring for the rest of the population by 2050. While this change is expected to produce only a minor increase in the ratio of negative-to-positive feelings associated with caregiving, purely due to population aging, it could have nontrivial deterioration of well-being for some caregivers. Discussion: Significant reductions in absolute caregiver well-being caused by demographic changes at the population level may reduce workload, productivity, and adversely impact health, if not offset by caregiver-friendly family policies.
    Keywords: USA, child care, household, time budget
    JEL: J1 Z0
    Date: 2020
  5. By: Simona Lorena Comi; Elena Cottini; Claudio Lucifora (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore)
    Abstract: We analyze the causal effect of retirement on the size, composition and intensity of social relationships using data from the Survey of Health, Ageing and Retirement in Europe for 11 European countries. Our empirical strategy exploits the different retirement eligibility ages as instruments for the endogenous individuals’ retirement decisions and controls for time invariant individual characteristics. We show that retirement changes the composition of the individual’s social network, increasing the share of family members, and decreasing the share of colleagues and friends, while there is no effect on the network’s absolute size. Changes in the social network’s composition are associated with a higher overall satisfaction and more intense relationships. We argue that retirement induces a substitution between weak (friends or colleagues) and strong ties (family), along with an increase in the intensity of the surviving ties. Interestingly this substitution has a gender dimension: females mainly reduce the share of friends while males that of colleagues.
    Keywords: retirement, social relationships, emotional closeness, ageing.
    JEL: J14 J26 C26
    Date: 2020–05
  6. By: Frédéric Gannon (Université Le Havre, Sciences Po-OFCE); Gilles Le Garrec (Sciences Po-OFCE); Gautier Lenfant (HEC); Vincent Touzé (Sciences Po-OFCE)
    Abstract: The adoption of a universal point system modifies the link between labor income and pension benefits. In this paper, we propose to measure the possible impact of such a change when considering di?erent wage trajectories. We identify seven stylized case studies to characterize the main properties of the current system for employees in the private sector with full careers under the social security ceiling. To address the transition issue, we setup two methods for valuing acquired pension rights in the old system. The first is the immediate conversion of the pension rights into points. The second consists in making the rules of calculation coexist and paying pension benefits acquired before the reform in proportion to the contribution period length in the old system. We contemplate a benchmarch scenario of constant long-run generosity for a given career. The impact is shown not to depend on the income level but on the salary profiles: a redistribution is carried out in favor of weakly growing profiles at the expense of the steeper ones. For careers with poor contribution years, significant declines are to be expected. However, for low-wage careers, an increase in the minimum pension is likely to limit the impact of these decreases or even to lead to a higher perceived e?ective pension. The way in which acquired pension rights are valued is not neutral. The conversion is rather advantageous for the least dynamic careers while the nesting of the rules is more generous for the most dynamic careers.
    Keywords: Réforme des retraites, distribution des revenus, minima sociaux
    JEL: H55 D31 I38
    Date: 2020–04
  7. By: Dotti, Valerio
    Abstract: Abstract We investigate the effects of (i) population ageing and (ii) rising income inequality on immigration policies using an overlapping-generations model of elections with endogenous political parties. In each period, young people work and pay taxes while old people receive social security payments. Immigrants are generally young, meaning they contribute significantly to financing the cost of public services and social security. Among natives, the elderly and the poor benefit the most from public spending. However, because these two types of voters do not fully internalize the positive fiscal effects of immigration, they have a common interest in coalescing around a populist party (or multiple) seeking to curb immigration and increase the tax burden on high-income individuals. Population ageing and rising income inequality increase the size and, in turn, the political power of such parties, resulting in more restrictive immigration policies, a larger public sector, higher tax rates, and lower societal well-being. Calibrating the model to UK data suggests that the magnitude of these effects is large. The implications of this model are shown to be consistent with patterns observed in UK attitudinal data.
    Keywords: Immigration, Ageing, Policy, Voting.
    JEL: C71 D72 H55 J61
    Date: 2020–04–14
  8. By: John Sabelhaus; Alice Henriques Volz
    Abstract: Wealth inequality in the US is high and rising, but Social Security is generally not considered in those wealth measures. Social Security Wealth (SSW) is the present value of future benefits that an individual will receive less the present value of future taxes they will pay. When an individual enters the labor force, they generally face a lifetime of taxes to pay before they will receive any benefits, and thus their initial SSW is generally low or negative. As an individual works and pays into the system their SSW grows and generally peaks somewhere around typical Social Security benefit claim ages. The accrual of SSW over the working life is most important for lower-income workers because the progressive Social Security benefit formula means that taxes paid while working are associated with proportionally higher benefits in retirement. We estimate SSW for individuals in the Survey of Consumer Finances (SCF) for 1995 through 2016 and use a pseudo-panel approach to empirically demonstrate those lifecycle patterns. We also show that including SSW in a comprehensive wealth measure generally reduces estimated levels of wealth inequality but does not reverse the upward trend in top wealth shares.
    JEL: G11 J26
    Date: 2020–05
  9. By: Carole Bonnet (INED - Institut national d'études démographiques, IPP - Institut des politiques publiques); Antoine Bozio (IPP - Institut des politiques publiques, 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); Julie Tréguier (INED - Institut national d'études démographiques, IPP - Institut des politiques publiques)
    Abstract: Le rapport analyse les droits conjugaux dans le système de retraite français en confrontant les effets des dispositifs avec les objectifs qui leur sont attribués. Plusieurs pistes de réforme, compatibles avec un système de retraite universel en points et visant à améliorer l'efficacité de ces dispositifs, sont présentées. Les droits conjugaux dans le système français sont l'ensemble des droits dits dérivés, au sens où ils dépendent des droits directs d'un conjoint. Ces droits dérivés, ou pensions de réversion, avaient pour objectif de couvrir le risque veuvage. Ce risque peut être défini comme la baisse du niveau de vie suite au décès du conjoint, ou bien l'entrée en pauvreté suite au veuvage. Dans le système actuel, la réversion maintient, en moyenne, le niveau de vie au décès du conjoint. Cependant, cette moyenne cache de fortes disparités avec des effets de surcompensation et des pertes nettes de niveau de vie – notamment quand le conjoint survivant a une faible ou pas de pension de droit propre. Ces disparités proviennent des différences entre régimes de mode de calcul des pensions de réversion, dont l'origine tient à la fois à des philosophies différentes et à l'usage de la réversion pour des objectifs variés. L'augmentation des séparations a conduit à définir un nouveau risque à couvrir : le risque divorce. Dans la situation actuelle, c'est la réversion qui joue ce rôle. En cas de divorce, le montant de la pension de réversion dépend du parcours conjugal postérieur du conjoint décédé. De plus, la pension de réversion ne peut être versée qu'au décès du conjoint, potentiellement de nombreuses années après le divorce, participant à diminuer le taux de recours. La réversion apparaît donc comme un instrument inadapté à la couverture du risque divorce. Actuellement, tous les régimes de retraite limitent le bénéfice des pensions de réversion aux couples mariés, excluant ainsi les couples pacsés. Il est n'est pas toujours facile de justifier une telle différenciation, qui est, par ailleurs, mal connue des assurés. Les règles actuelles définissant les pensions de réversion sont très hétérogènes selon les régimes, différant sur l'âge d'ouverture des droits, la condition de durée de mariage, les règles de partage des droits entre conjoints survivants divorcés, la prise en compte ou non d'autres ressources, et le taux de pension de réversion. De telles disparités sont difficile à justifier, et l'unification des règles devrait être un objectif de la mise en place d'un système universel de retraite.
    Date: 2019–06
  10. By: Torben M. Andersen; Joydeep Bhattacharya; Qing Liu
    Abstract: In the real world, public pay-as-you-go pension (PAYG) schemes are popular and co-exist with private, retirement-saving schemes. This is true even in dynamically efficient economies where such pensions offer a lower return. The classic Aaron-Samuelson result argues that, in theory, this is impossible. Later work has shown that it may be possible if agents, left on their own, undersave due to myopia or time-inconsistency. In that case, if the government is paternalistic, a welfare rationale for PAYG pensions arises but only if voluntary retirement saving is fully crowded out because of a binding borrowing constraint. This paper generalizes the Aaron-Samuelson discussion to the reference-dependent utility setup of Kőszegi and Rabin (2009) where undersaving happens naturally. No borrowing constraint is imposed. In this case, it is possible to offer a non-paternalistic, welfare rationale for return-dominated, PAYG pensions to coexist with private retirement saving.
    Keywords: reference-dependence, crowding-out, pensions, dynamic efficiency
    JEL: H55 E60
    Date: 2020
  11. By: Antoine Bozio (IPP - Institut des politiques publiques, 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); Simon Rabaté (IPP - Institut des politiques publiques, Centraal Planbureau); Audrey Rain (IPP - Institut des politiques publiques); Maxime Tô (IPP - Institut des politiques publiques, UCL - University College of London [London], Institute for Fiscal Studies)
    Abstract: A points system, operating at defined yield, makes it possible to rethink how pension systems are managed. Instead of having to make repeated ad hoc changes to the parameters of the system, it is possible to define change rules that other guarantees to future pensioners, as regards not only their entitlements but also the long-term sustainability of the system. In this brief, and based on simulations of a variety of shocks to the pension system, we study what management rules deserve to be chosen. Two rules absolutely must be selected: firstly the growth in the value of the pension point should match the growth in salaries; and secondly converting the points into pension should take into account the life expectancy of each generation (cohort). A third rule that is important for the long term, is the relationship between the rules for index-linking claimed pensions and the amounts of the pensions when they start being claimed. This rule should serve as a guide to managers so that they can steer the system towards an equilibrium that is not based on too low an index-linking of the pensions. Such management implies high institutional autonomy for the system, whereby the managers need to be accountable for the finnancial equilibrium and for the risks to pension revaluation.
    Date: 2019–06
  12. By: Ikuya Takao (Aoyama Gakuin University); Shota Chikayama (Aoyama Gakuin University); Takashi Kaburagi (International Christian University); Satoshi Kumagai (Aoyama Gakuin University); Toshiyuki Matsumoto (Aoyama Gakuin University); Yosuke Kurihara (Aoyama Gakuin University)
    Abstract: With the increase in world?s older population, the cases of fall accidents among the elderly has increased, with 32% - 42% of the annual fall accidents from people aged 70 years and older. Because the impact of falls can cause some serious aftereffects on the elderly, early detection of the fall accident and appropriate treatment based on the condition after the fall are required. To perform appropriate treatment upon arrival at the incident scene, it is essential to assess the behavior and condition of the elderly after the fall (whether they are standing, conscious, or unconscious) in advance. Under these circumstances, many previous researches have proposed automatic fall detection systems for early detection. Our previous studies have proposed an unconstrained fall detection system utilizing a microwave Doppler sensor; however, these studies did not focus on behavior assessment after fall accident. Hence, this study proposes a system that could assess behavior after fall accident.This study used two types of sensor: a microwave Doppler sensor, which was attached to the ceiling, and a piezoelectric ceramic, which was installed on the floor. The output signal from the microwave Doppler sensor was extracted for 3 seconds after the time the impact on the floor was detected by the piezoelectric ceramic. The extracted data was downsampled to reduce the data size and was applied to the autoencoder to compress dimension. The compressed data was used as input to a neural network for multiclass discrimination. The output from the neural network was converted into probability by the softmax function. Finally, the class with the largest probability was determined as the motion after the fall.In the verification experiment, four subjects in their 20s were set up. Each subject was asked to stand up and not to stand up (unconscious and conscious) after each fall, with 30 times data for each set, which corresponded to 3 classes to be discriminated. The sampling frequency, sampling points, and measurement time were set to 4000 Hz, 60000 points, and 15 seconds, respectively. From the data collected, 2400 points were obtained with downsampling point of five. Then, the dimension of the hidden layer was set to 50. For the evaluation of the proposed system, leave-one-subject-out cross-validation was performed. The result shows a correct answer rate of one for all subjects.
    Keywords: After fall motion discrimination, Autoencoder
    Date: 2020–02
  13. By: Clive Bell
    Abstract: COVID-19 causes extremely high mortality among the old. This motivates a comparison of the losses of future lifetime years and future lifetime years of work ensuing from a hypothetical 25,000 excess deaths in Italy, whose a?uent population is one of the world's oldest, with those in Kenya, whose population is one of the most youthful and poor.
    Keywords: age structure, COVID-19, future years lost, Italy, Kenya
    Date: 2020
  14. By: Antoine Bozio (IPP - Institut des politiques publiques, 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); Chloé Lallemand (IPP - Institut des politiques publiques); Simon Rabaté (IPP - Institut des politiques publiques); Audrey Rain (IPP - Institut des politiques publiques)
    Abstract: A consequence of the French pensions reform whose aim is to establish a universal pension system having defined yield and operating on a points basis will be to reinforce the contributory nature of the formula for calculating pensions. Whereas in the current system the contributory core has counter-redistributive effects – increasing the pensions inequality relative to the salaries inequality – the new system would become neutral and the reform would thus lead to a reduction in pension inequalities. The reason for this counter-intuitive effect – i.e. the effect whereby making the system more contributory reduces inequalities – is to be found in the corrections made by implicit mechanisms in the current system, such as the rules of taking the 25 best years or of revaluating the salaries included in the pensions calculation in line with inflation. Abolishing the rule of number of years of contributions in the pensions scale would also reinforce this effect by being more beneficial to individuals who have had low mean salaries. In this policy brief, we show these effects based on simulations conducted on the population of employees in the French private sector. In addition to individuals on low salaries, women would also benefit signicantly from this change in the calculation formula..
    Date: 2019–06
  15. By: Steffen Juranek; Floris Zoutman
    Abstract: Understanding the effectiveness of social distancing on the spread of COVID-19 is crucial to justify economically costly social distancing measures. We present a case study focusing on the three Scandinavian countries. Whereas Denmark and Norway imposed relatively strict measures, Sweden follows an extraordinarily lenient approach. We use an event-study approach in which Sweden serves as a counterfactual to Denmark/Norway to estimate the measures’ effectiveness. We estimate that in the counterfactual in which Denmark/Norway implemented Sweden’s more lenient measures the number of hospitalizations would have peaked between around 15-20 days later. The peak number of hospitalizations in Denmark (Norway) would have been 133 (231) percent higher, and the peak number of ICU patients would have increased by 107 (140) percent.
    Keywords: COVID-19, social distancing, intensive care, case study
    JEL: I18 I12 H12
    Date: 2020

This nep-age issue is ©2020 by Claudia Villosio. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.