nep-age New Economics Papers
on Economics of Ageing
Issue of 2020‒06‒08
thirteen papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Special Pensions in the EU By Per Eckefeldt; Anda Pătărău
  2. The Old-Age Security Motive for Fertility: Evidence from the Extension of Social Pensions in Namibia By Rossi, Pauline; Godard, Mathilde
  3. Employer Perceptions of Older Workers: 2019 Survey Results By Alicia H. Munnell; Gal Wettstein
  4. Stockholm City’s Elderly Care and Covid19: Interview with Barbro Karlsson By Stern, Charlotta; Klein, Daniel
  5. 'More Than One Red Herring'? Heterogeneous Effects of Ageing on Healthcare Utilisation By Costa-Font, Joan; Vilaplana-Prieto, Cristina
  6. Retirement, Intergenerational Time Transfers, and Fertility By Peter Eibich; Thomas Siedler
  7. Age, Death Risk, and the Design of an Exit Strategy: A Guide for Policymakers and for Citizens Who Want to Stay Alive By Oswald, Andrew J.; Powdthavee, Nattavudh
  8. Multi-platform social media use: little evidence of impacts on adult well-being By Sophie Lohmann; Emilio Zagheni
  9. Double trouble: The burden of child rearing and working on maternal mortality By Bucher-Koenen, Tabea; Farbmacher, Helmut; Guber, Raphael; Vikström, Johan
  10. Saving Motives over the Life-Cycle By Pashchenko, Svetlana; Porapakkarm, Ponpoje
  11. Health versus Wealth: On the Distributional Effects of Controlling a Pandemic By Andrew Glover; Jonathan Heathcote; Dirk Krueger; Jose-Victor Rios-Rull
  12. Pension Funds and Socially-Responsible Investment in Corporate Debt Securities: An Empirical Investigation By Michael McCann
  13. La afiliación a la Seguridad Social durante la crisis de la Covid-19: situación en abril y previsiones para mayo By J. Ignacio Conde-Ruiz; Manu García; Luis A. Puch; Jesús Ruiz

  1. By: Per Eckefeldt; Anda Pătărău
    Abstract: Most EU countries have special pensions, alongside their general pension systems. Generally, special pensions are granted to beneficiaries with a special status, such as state employees of all branches of government (legislative, executive, judiciary), security and defence forces, including some civil professions, and people that work under difficult conditions. In most countries, special pensions were introduced long ago. Hallmarks of special pensions usually include a lower retirement age, contributory periods counted more favourably, or higher benefits. However, recent national reforms indicate that such preferential schemes are being phased out, especially in the case of security and defence workers and state employees. This raises questions on the rationale for continuing with special pension schemes in the future. On the one hand, certain special pension categories seem justified, such as those involving occupational risks that can harm workers’ health and safety. This includes people working under difficult conditions and professions for which physical condition is crucial for carrying out one’s duties, such as security and defence forces, civil aviation or air traffic controllers. However, compensation for these categories of workers could take the form of higher wages and/or employers’ contribution rates, rather than pensions, as these factors would automatically lead to higher pension benefits. On the other hand, special pensions for state employees and employees of (former) state-owned enterprises are more controversial in terms of social equity and administrative efficiency. The remaining categories of special pensions fall somewhere in between. Even when compensation for some groups experiencing negative externalities or inequalities appears justified, special pensions may not necessarily be the most suitable form of social transfer.
    JEL: H55 J1 J18 J26
    Date: 2020–04
  2. By: Rossi, Pauline; Godard, Mathilde
    Abstract: The old-age security motive for fertility postulates that people’s needs for old-age support raise the demand for children. We test this widespread idea using the extension of social pensions in Namibia during the nineties. The reform eliminated inequalities in pension coverage and benefit across regions and ethnic groups. Combining differences in pre-reform pensions and differences in exposure across cohorts, we show that pensions substantially reduce fertility, especially in late reproductive life. This article provides the first quasi-experimental quantification of the old-age security motive. The results suggest that improving social protection for the elderly could go a long way in fostering fertility decline in Sub-Saharan Africa.
    Keywords: Fertility, Old-age pensions, Social security, Africa, Difference-in-differences
    Date: 2020–02
  3. By: Alicia H. Munnell; Gal Wettstein
    Abstract: Today, men on average retire at 64 and women at 63, and they can expect to spend about 20 years in retirement. But if Americans continue to retire as early as they do today, many will not have adequate income once they stop working. That is, many older people need to work longer to ensure a secure retirement. American workers appear to have gotten the message. Over the past three decades, the share of people who say they plan to work past age 65 has increased from 18 percent to 45 percent. The problem is that nearly two in five workers end up retiring earlier than planned. To the extent that these premature retirements reflect employer resistance to older workers, the prescription to work longer will be hard to achieve. The question, therefore, is the extent to which employers are willing to hire and retain older workers. To shed some light on the question, this brief, based on a recent paper, reports on a survey of employers conducted in 2019, before the COVID-19 pandemic. The survey captures employersÕ perceptions of the productivity, costs, and net value of their older workers relative to their younger workers. Since this new survey replicates a similar 2006 effort, it also allows a comparison of employer perceptions over a period when technology has evolved and the older workforce has grown. The discussion proceeds as follows. The first section summarizes what we know about older workers Ð their basic characteristics, productivity, costs, and employer discrimination against them. The second section describes the 2019 survey and reports the results. The third section compares the 2019 results with those for 2006. The final section concludes that, overall, employers say they find older workers as attractive as younger ones despite their higher perceived costs, and the 2019 results show a notable improvement in employer perceptions of older support staff and production workers Ð as opposed to professional workers Ð since 2006. Given the pandemic, though, these results might turn out to be a high-water mark in employer attitudes towards older workers.
    Date: 2020–05
  4. By: Stern, Charlotta (The Ratio Institute); Klein, Daniel (George Mason University)
    Abstract: Upwards of 70 percent of the Covid19 death toll in Sweden has been people in elderly care services (as of mid-May 2020). We summarize the Covid19 tragedy in elderly care in Sweden, particularly in the City of Stockholm. We explain the institutional structure of elderly care administration and service provision. Those who died of Covid19 in Stockholm’s nursing homes had a life-remaining median somewhere in the range of 5 to 9 months. Having contextualized the Covid19 problem in City of Stockholm, we present an interview of Barbro Karlsson, who works at the administrative heart of the Stockholm elderly care system. Her institutional knowledge and sentiment offer great insight into the concrete problems and challenges. There are really two sides to the elderly care Covid19 challenge: The vulnerability and frailty of those in nursing homes and the problem of nosocomial infection—that is, infection caused by contact with others involved in the elderly care experience. The problem calls for targeted solutions by those close to the vulnerable individuals.
    Keywords: Covid-19; Sweden; Stockholm; elderly care; nursing homes; nosocomial
    JEL: H40 I18 I38
    Date: 2020–05–27
  5. By: Costa-Font, Joan (London School of Economics); Vilaplana-Prieto, Cristina (Universidad de Murcia)
    Abstract: We study the effect of ageing, defined an extra year of life, on health care utilisation. We disentangle the direct effect of ageing, from other alternative explanations such as the presence of comorbidities and endogenous time to death (TTD) that are argued to absorb the effect of ageing ( so-called 'red herring' hypothesis). We exploit individual level end of life data from several European countries that record the use of medicine, outpatient and inpatient care as well as long-term care. Consistently with a 'red herring hypothesis', we find that corrected TTD estimates are significantly different from uncorrected ones, and its effect size exceeds that of an extra year of life, which in turn is moderated by individual comorbidities. Corrected estimates suggest an overall attenuated effect of ageing, which does not influence outpatient care utilisation. These results suggest the presence of 'more than one red herring' depending on the type of health care examined.
    Keywords: endogeneous time to death (TTD), home help use and comorbidity, medicines use, hospital care, health care utilization, ageing, time to death, comorbidities
    JEL: I18 J13 H75
    Date: 2020–05
  6. By: Peter Eibich; Thomas Siedler
    Abstract: Retired parents might invest time into their adult children by providing childcare. Such intergenerational time transfers can have important implications for family decisions. This paper estimates the effects of parental retirement on adult children’s fertility. We use representative panel data from Germany to link observations on parents and adult children. We exploit eligibility ages for early retirement for identification in a regression discontinuity design. The results show that parent’s early retirement significantly increases the probability of childbirth for adult children. However, parental retirement affects only the timing of adult children’s fertility, without having an effect on total fertility.
    Keywords: Retirement, fertility, intergenerational transfer, time use
    JEL: J13 J14 J22 J26
    Date: 2020
  7. By: Oswald, Andrew J. (University of Warwick); Powdthavee, Nattavudh (University of Warwick)
    Abstract: Some commentators argue for a fairly general release from COVID-19 lockdown. That has a troubling flaw. It ignores the fatality risks that will then be faced by citizens in midlife and older. This paper provides information on the strong age-pattern in the risk of death from three countries (China, Italy, the UK). If politicians want an imminent removal of the lockdown, the safest approach in our judgment would be a rolling age-release strategy combined with the current principle of social distancing. But even if that is not the policy adopted, citizens need to be shown graphs of the kind in this paper. Honest guidance ought to be given to those in midlife and beyond. Governments have to allow people to understand their personal risk after any release from lockdown.
    Keywords: coronavirus, labor market, recession, COVID-19
    JEL: I18 J13 H75
    Date: 2020–05
  8. By: Sophie Lohmann (Max Planck Institute for Demographic Research, Rostock, Germany); Emilio Zagheni (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Social media have become a near-ubiquitous part of our lives. The growing concern that their use may alter our well-being has been met with elusive scientific evidence. Existing literature often simplifies social media use as a homogeneous process. In reality, social media use and functions vary widely depending on platform and demographic characteristics of users, and there may be qualitative differences between using few versus many different social media platforms. Using data from the General Social Survey, an underanalyzed data source for this purpose, we characterize intensive social media users and examine how differential platform use impacts well-being. We document substantial heterogeneity in the demography of users and show that intensive users tend to be young, female, more likely to be Black than Hispanic, from high SES backgrounds, from more religious backgrounds, and from families with migration background, compared to both non-users and moderate users. The intensity of social media use seemed largely unrelated to well-being in both unadjusted models and in propensity-score models that adjusted for selection bias and demographic factors. Among middle-aged and older adults, however, intensive social media use may be slightly associated with depressive symptoms. Our findings indicate that although mediums of communication have changed with the advent of social media, these new mediums are not necessarily detrimental to well-being.
    JEL: J1 Z0
    Date: 2020
  9. By: Bucher-Koenen, Tabea (Munich Center for the Economics of Aging); Farbmacher, Helmut (Munich Center for the Economics of Aging); Guber, Raphael (Munich Center for the Economics of Aging); Vikström, Johan (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: We document increased old-age mortality rates among Swedish twin mothers compared to non-twin mothers. Results are based on administrative data on mortality for the years 1990 to 2010. We argue that twins are an unplanned shock to fertility in the cohorts of older women considered. Deaths due to lung cancer, chronic obstructive pulmonary disease and heart attacks, which are associated with stress during life, are significantly increased. Stratifying the sample by education and pension income shows the highest increase in mortality rates among highly educated mothers and those with above-median pension income. These results are consistent with the existence of a double burden from child rearing and working on mothers’ health.
    Keywords: Mortality; maternal health; fertility; twins
    JEL: I10 J13 J20
    Date: 2020–05–19
  10. By: Pashchenko, Svetlana; Porapakkarm, Ponpoje
    Abstract: A major challenge in the study of saving behavior is how to disentangle different motives for saving. We approach this question in the context of an entire life-cycle model. Specifically, we identify the importance of different saving motives by simultaneously accounting for wealth accumulation during working period, wealth decumulation during retirement, and labor supply behavior. We show that exploiting all of these data features can sharpen our identification, thus complementing previous studies that focus only on wealth accumulation or decumulation. We calibrate our model using several micro datasets and use the estimated model to evaluate the contribution of life-cycle, bequest, and precautionary motives to total savings. We also emphasize the importance of accounting for state-contingent assets when analyzing the precautionary saving motive.
    Keywords: savings, self-insurance, bequest motives, life-cycle models, medical spending
    JEL: D52 D91 E21 H53 I13 I18
    Date: 2020–04
  11. By: Andrew Glover; Jonathan Heathcote; Dirk Krueger; Jose-Victor Rios-Rull
    Abstract: To slow the spread of COVID-19, many countries are shutting down nonessential sectors of the economy. Older individuals have the most to gain from slowing virus diffusion. Younger workers in sectors that are shuttered have the most to lose. In this paper, we build a model in which economic activity and disease progression are jointly determined. Individuals differ by age (young and retired), by sector (basic and luxury), and by health status. Disease transmission occurs in the workplace, in consumption activities, at home, and in hospitals. We study the optimal economic mitigation policy of a utilitarian government that can redistribute across individuals, but where such redistribution is costly. We show that optimal redistribution and mitigation policies interact, and reflect a compromise between the strongly diverging preferred policy paths of different subgroups of the population. We find that the shutdown in place on April 12 is too extensive, but that a partial shutdown should remain in place through July. People prefer deeper and longer shutdowns if a vaccine is imminent, especially the elderly.
    Keywords: Redistribution; COVID-19; Economic policy; Pandemic; Shutdowns
    JEL: J08 J23 J63 J78
    Date: 2020–05–10
  12. By: Michael McCann
    Abstract: This paper examines the extent of socially-responsible investment conducted by pension funds in corporate debt securities. Behavioural theories of the firms suggest a link between corporate social responsibility and business risk, particularly over the longer-term. Therefore, institutions such as pension funds with a longer-term investment horizon should be more likely to engage in socially-responsible investment compared to investment funds with a short-term horizon. Using data on the holdings by pension funds and investment funds of debt securities issued by North American and European companies, we investigate whether there are any differences in the treatment of corporate social performance by these different institutional groups in their holdings of corporate debt securities. Our results show no significant difference in the corporate social performance of the borrowers whose securities both pension funds and investment funds hold. In addition, our findings indicate that both investment groups reflect broader environmental, social and governance factors in their debt market investments with corporate social performance having a significant impact on credit spreads for securities. However, pension funds place greater weight on social and environmental factors compared to investment funds when pricing debt securities. Our analysis demonstrates that financial flows in debt markets are influenced by social and environmental factors and that pension funds are a key conduit. Consequently, capital allocation decisions by pension funds could play an important role in changing corporate behaviour to achieve more sustainable outcomes.
    Keywords: Pension Funds, Responsible Investment, Capital Markets, Corporate Social Responsibility
    JEL: G2
    Date: 2020–05
  13. By: J. Ignacio Conde-Ruiz; Manu García; Luis A. Puch; Jesús Ruiz
    Abstract: En este trabajo se extiende el modelo estadístico propuesto para el seguimiento de la afiliación a la Segurida Social en un Apunte anterior de los mismos autores y se actualiza el análisis con datos del mes de abril.
    Date: 2020–05

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