nep-age New Economics Papers
on Economics of Ageing
Issue of 2020‒08‒17
28 papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Age-Specific Entrepreneurship and PAYG Public Pensions in Germany By Burkhard Heer; Mark Trede
  2. Deep neural network for optimal retirement consumption in defined contribution pension system By Wen Chen; Nicolas Langrené
  3. The Illusory Benefits of Working Longer on Financial Preparedness for Retirement By Teresa Ghilarducci; Michael Papadopoulos; Anthony Webb
  4. Does the Actuarial Adjustment for Pension Delay Affect Retirement and Claiming Decisions? By Devon Gorry; Kyung Min Lee; Sita Slavov
  5. Intra-Familial Transfers, Son Preference, and Retirement Behavior in South Korea By Kyeongkuk Kim; Sang-Hyop Lee; Timothy J. Halliday
  6. The Mental Health Effects of Retirement By Picchio, Matteo; van Ours, Jan C.
  7. Does later retirement change your healthcare consumption ? Evidence from France By Elsa Perdrix
  8. Reform Options for Mature Defined Benefit Pension Plans: The Case of the Netherlands By Marc Gerard
  9. Why Retirement, Social Security, and Age Discrimination Policies Need to Consider the Intersectional Experiences of Older Women By Ian Burn; Patrick Button; Theodore F. Figinski; Joanne Song McLaughlin
  11. Conditions of Existence and Subjective Perceptions of Retirement: Quantitative Evidence from France By Bénédicte H. Apouey
  12. Early Evidence on the Impact of COVID-19 and the Recession on Older Workers By Truc Thi Mai Bui; Patrick Button; Elyce G. Picciotti
  13. Hospital at Home for Older Adults During COVID-19: A Strategic Approach for Strengthening Geriatric Care Across Health Systems By Sultana, Abida; McKyer, E. Lisako J.; Hossain, Md Mahbub
  14. The Intergenerational Welfare Implications of Disease Contagion By Pretnar, Nick
  15. Demographics and the Natural Rate of Interest in Japan By Fei Han
  16. Linking Changes in Inequality in Life Expectancy and Mortality: Evidence from Denmark and the United States By Gordon Dahl; Claus Thustrup Kreiner; Torben Heien Nielsen; Benjamin Ly Serena
  17. Are Dutch Old-Age Pensions Taxed Fairly and Efficiently? By Bernd Genser; Robert Holzmann
  19. Older and ‘staying at home’ during lockdown: informal care receipt during the COVID-19 pandemic amongst people aged 70 and over in the UK By Evamdrou, Maria; Falkingham, Jane; Qin, Min; Vlachantoni, Athina
  20. Reservation Wages and Work Arrangements: Evidence From The American Life Panel By Michael Papadopoulos
  21. A safety net that holds? Tracking minimum income protection adequacy for the elderly, the working and the non-working of active age By Sarah Marchal; Linus Siöland
  22. Global years of life lost to COVID-19 By Arolas, Héctor Pifarré i; Acosta, Enrique; Casasnovas, Guillem López; Lo, Adeline; Nicodemo, Catia; Riffe, Tim; Myrskylä, Mikko
  23. From Secular Stagnation to Robocalypse? Implications of Demographic and Technological Changes By Basso, Henrique S.; Jimeno, Juan F
  24. Optimal Investment, Heterogeneous Consumption and Best Time for Retirement By Zuo Quan Xu; Harry Zheng
  25. El sistema de pensiones en México: institucionalidad, gasto público y sostenibilidad financiera By Villarreal, Héctor; Macías, Alejandra
  26. El sistema de pensiones en el Perú: institucionalidad, gasto público y sostenibilidad financiera By Bernal Lobato, Noelia
  27. El sistema de pensiones en el Uruguay: institucionalidad, gasto público y sostenibilidad financiera By Lorenzo, Fernando
  28. El sistema de pensiones en la Argentina: Institucionalidad, gasto público y sostenibilidad financiera By Cetrángolo, Oscar; Grushka, Carlos

  1. By: Burkhard Heer; Mark Trede
    Abstract: We present new empirical evidence on the distribution of earnings, income and wealth among entrepreneurs in Germany. We document that both earnings and income are more concentrated among entrepreneurs than among workers and describe a large-scale overlapping-generations model that can replicate these findings. As an application, we compute the equilibrium effects of a reform of the German pay-as-you-go pension system in which entrepreneurs must also contribute and receive a pension. We show that in the presence of mobility between workers and entrepreneurs, the expected lifetime utility of all newborn households unanimously declines due to the general equilibrium effects of lower aggregate savings, and welfare losses amount to approximately 5% of total consumption. In addition, the integration of self-employed workers into the social security system in Germany does not help to improve its fiscal sustainability, and only an increase in the retirement age to 70 years will help to finance pensions at the present level beyond the year 2050.
    Keywords: entrepreneurship, aging, income distribution, overlapping generations, social security, fiscal sustainability
    JEL: H55 D31 D91 J11 L26 C68
    Date: 2020
  2. By: Wen Chen (CSIRO - Commonwealth Scientific and Industrial Research Organisation [Canberra]); Nicolas Langrené (CSIRO - Commonwealth Scientific and Industrial Research Organisation [Canberra])
    Abstract: In this paper, we develop a deep neural network approach to solve a lifetime expected mortality-weighted utility-based model for optimal consumption in the decumulation phase of a defined contribution pension system. We formulate this problem as a multi-period finite-horizon stochastic control problem and train a deep neural network policy representing consumption decisions. The optimal consumption policy is determined by personal information about the retiree such as age, wealth, risk aversion and bequest motive, as well as a series of economic and financial variables including inflation rates and asset returns jointly simulated from a proposed seven-factor economic scenario generator calibrated from market data. We use the Australian pension system as an example, with consideration of the government-funded means-tested Age Pension and other practical aspects such as fund management fees. The key findings from our numerical tests are as follows. First, our deep neural network optimal consumption policy, which adapts to changes in market conditions, outperforms deterministic drawdown rules proposed in the literature. Moreover, the out-of-sample outperformance ratios increase as the number of training iterations increases, eventually reaching outperformance on all testing scenarios after less than 10 minutes of training. Second, a sensitivity analysis is performed to reveal how risk aversion and bequest motives change the consumption over a retiree's lifetime under this utility framework. Our results show that stronger risk aversion generates a flatter consumption pattern; however, there is not much difference in consumption with or without bequest until age 103. Third, we provide the optimal consumption rate with different starting wealth balances. We observe that optimal consumption rates are not proportional to initial wealth due to the Age Pension payment. Forth, with the same initial wealth balance and utility parameter settings, the optimal consumption level is different between males and females due to gender differences in mortality. Specifically, the optimal consumption level is slightly lower for females until age 84.
    Abstract: Dans cet article, nous développons une approche par réseau de neurones profond pour résoudre un problème de consommation optimale au cours de la phase de décumulation dans un système de retraite à cotisations définies. Le problème est basé sur un modèle d'espérance d'utilité cumulée au cours de la retraite, pondéré par les probabilités de survie à chaque âge. Nous le formulons comme un problème de commande stochastique multi-période à horizon de temps fini, et nous entraînons un réseau de neurones profond représentant les décisions de consommation. La conduite à suivre optimale en matière de consommation est déterminée par des données personnelles du retraité, telles que son âge, son épargne retraite, son aversion pour le risque et son désir de legs, ainsi que par un ensemble de variables économiques et financières comprenant le taux d'inflation et des rendements d'actifs financiers simulés conjointement par un générateur de scénarios économiques développé pour l'occasion, comprenant sept facteurs et calibré sur des données de marché. Nous prenons comme exemple le système de retraite australien, avec prise en compte de la pension de retraite versée par l'État sous condition de ressources, ainsi que d'autres aspects pratiques tels que les frais de gestion du plan d'épargne retraite privé obligatoire. Nos résultats principaux sont les suivants. Premièrement, les règles de décision de consommation déterminées par le réseau de neurones profond, qui prend en compte et s'adapte aux changements aléatoires des conditions du marché, fait mieux que les règles de dépense déterministes classiques proposées dans la littérature. De plus, le ratio de surperformance sur la base de test croît en fonction du nombre d'itérations de l'algorithme d'apprentissage, pour atteindre 100% après moins de 10 minutes d'apprentissage. Deuxièmement, nous avons réalisé une analyse de sensibilité pour révéler comment l'aversion pour le risque et le désir de legs affectent les décisions de consommation au cours de la retraite dans le cadre de ce modèle d'espérance d'utilité cumulée. Troisièmement, nous avons déterminé le taux de consommation optimal en fonction de l'épargne retraite disponible au moment du départ à la retraite. Nous observons que les taux de consommation optimaux ne sont pas proportionnels à l'épargne retraite initiale du fait de la pension de retraite versée par l'État. Quatrièmement, un homme retraité et une femme retraitée avec la même épargne retraite initiale, la même aversion pour le risque et le même désir de legs n'auront néanmoins pas le même taux de consommation optimal, du fait de l'écart de longévité existant entre hommes et femmes.
    Keywords: decumulation,retirement income,deep learning,stochastic control,economic scenario generator,defined-contribution pension,optimal consumption
    Date: 2020–07–31
  3. By: Teresa Ghilarducci; Michael Papadopoulos; Anthony Webb (Schwartz Center for Economic Policy Analysis (SCEPA))
    Abstract: Older workers with insufficient savings are advised to delay retirement. Using Health and Retirement Study data, we compare outcomes of those who delay retirement, a possibly select group, with the predictions of a typical spreadsheet model. Work to age 70 is associated with an 18 percentage-point increase in the share financially prepared for retirement, compared with a predicted 46 percentage points because most older workers claim Social Security and retirement wealth barely increases. Drawing down retirement wealth while working makes sense for most, because earnings are lower than post-retirement income, in part because many older workers voluntarily work part time.
    Keywords: Retirement income, Social Security claiming, Older worker labor supply
    JEL: H55 J26 J32
    Date: 2020–07
  4. By: Devon Gorry; Kyung Min Lee; Sita Slavov
    Abstract: We investigate the impact of more generous terms for delaying state pensions on claiming and labor supply in the United Kingdom using a 2005 policy change. First, we find that the more generous delay terms reduced the fraction of males receiving pensions at the earliest eligibility age and shortly after. While there are also post-policy changes in women’s claiming behavior, further investigation reveals that these changes do not coincide with the start of the policy and are therefore less likely to be causal effects. Second, we find post-policy increases in labor supply around the earliest pension eligibility age, followed by post-policy decreases in labor supply at older ages. While these labor supply changes cannot easily be separated from longer-term trends, they are consistent with some individuals choosing to work longer to finance pension delay, followed by some individuals retiring earlier due to the income effect from more generous pension benefits. Finally, we find that among individuals who delayed pensions for up to 5 years, about 3 percent of individuals took their gains from delay as lump sums, an option made available under the policy changes.
    JEL: H55 J26
    Date: 2020–07
  5. By: Kyeongkuk Kim (Ministry of Economy and Finance, Republic of Korea); Sang-Hyop Lee (University of Hawai‘i); Timothy J. Halliday (University of Hawai‘i at Manoa and IZA)
    Abstract: We consider the nexus of intra-familial transfers, the sex composition of the sibship, and parental retirement behavior in Korea. To investigate this, we employ the Korean Longitudinal Study of Aging and a research design that relies on plausibly exogenous variation in the sex composition of the sibship. We provide evidence that it costs more to raise sons than daughters in Korea. Thus, in the absence of sufficient transfers from adult sons to parents, parents will fund their earlier investments in their sons by increasing their labor supply. Consistent with this, we show that parents with more adult sons than daughters are more likely to delay their retirement. In particular, an elderly parent with all sons has a probability of being retired that is 7–10 percentage points lower than a comparable parent with all daughters. Elderly parents also work between 1.8 and 2.7 hours more per week when their sibship consists of all sons. These effects are the most pronounced when the first born is a son, as well as for poorer households.
    Keywords: retirement; intra-familial transfers; gender; sex ratios
    JEL: J1 J13 J16 J26
    Date: 2020–06
  6. 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: Happiness; health; regression dicontinuity; retirement; Well-being
    JEL: H55 J14 J26
    Date: 2019–11
  7. By: Elsa Perdrix (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics, IPP - Institut des politiques publiques)
    Abstract: This paper examines the causal impact of later retirement on doctor visits among the French elderly. This question is of interest since spillover effects may arise if later retirement increases healthcare expenditure. I exploit the 1993 French pension reform in a two-stage least square to deal with the endogeneity of retirement. This reform leads to a progressive increase in claiming age, cohort by cohort from 1934 to 1943. I use a two-part model to disentangle between extensive and intensive margin. I use the administrative data HYGIE to observe both healthcare consumption between 2005 and 2015 and past careers. I find that an increase in retirement by four months decreases significantly the probability to have at least one doctor visit per year by 0.815 percentage point and decreases the number of doctor visits by 1.14% between ages 67 and 75. This effect is driven by the consumption of generalist doctor visits, and tends to be stronger for the first ages of consumption observed.
    Keywords: Pension reform,Health,Healthcare consumption
    Date: 2020–07
  8. By: Marc Gerard
    Abstract: The Netherlands has been operating fully funded, defined benefit second pillar pension schemes that have consistently ranked high worldwide for delivering high replacement rates while featuring strong solidarity among members. Yet the long-term sustainability of the Dutch pension funds has been undermined in recent years by protracted low interest rates and unfavorable demographic developments, exacerbating controversies over intergenerational transfer mechanisms within the plans. This has prompted a national debate over ways to move toward more individualization while preserving financial security at retirement for all. This paper draws on this experience, illustrated by stress testing simulations and assessed vis-à-vis solutions implemented in peer countries, to discuss the main policy trade-offs associated with the reform of mature pension systems in advanced economies.
    Keywords: Pension funds;Stress testing;Pension reforms;Pensions;Old age pensions;Financial crises;Economic growth;Social safety nets;Economic recovery;defined benefit plans,defined contribution plans,fully funded,pension mathematics,stress tests,solvency,pension fund,pension scheme,pension system,replacement rate
    Date: 2019–01–25
  9. By: Ian Burn; Patrick Button; Theodore F. Figinski; Joanne Song McLaughlin
    Abstract: We provide an overview of research that indicates that older women face unique challenges and opportunities with respect to work, retirement, Social Security, and age discrimination law. We present estimates of poverty by age and sex, showing that poverty increases with age for women due to older women often outliving their spouses and becoming widowed. We discuss research that shows that women benefit more than men from working longer. We then note that older women face intersectional discrimination that can unfortunately be a barrier to older women working longer. We detail how older women often “fall between the cracks” of the Age Discrimination in Employment Act and Title VII of the Civil Rights Act and are thus not well protected against this intersectional discrimination. As a final example of how women face different circumstances, we summarize research on how older women were differentially negatively impacted by the elimination of Social Security’s Retirement Earnings.
    JEL: H55 J14 J16 J7 K31
    Date: 2020–06
  10. By: Julia Rötzmeier-Keuper (Paderborn University); Nancy V. Wünderlich (Paderborn University)
    Abstract: Research postulates the importance of life meaningfulness in the formation of existential well-being. For elderly consumers who feel captive to their inevitable need to rely on care services, a loss of life meaningfulness and an experience of upheaval is common and thus puts their well-being at stake. Despite evidence that consumers engage in consumption for personal growth, maintaining well-being and self-worth in response to upheaval, a detailed understanding of the consumption activities and practices in the existential meaning-making processes in the “care recipient life episode” is lacking. In this in-depth interview study, the way elderly consumers adapt in the aftermath of a major life upheaval that is instigated by the need to utilize care services, which meaningful goals and experiences they formulate to uphold personal well-being, and how they pursue their goals by means of different consumption practices have been explored. A social practices lens was utilized to expand the understanding of elderly consumers’ individual pursuits in adapting to the care service culture. The study contributes to research on the consumption of aging populations and adds to the understanding of consumption practices in the care service context. Globally, a growing need for long-term care is expected, which puts pressure on aligning existing care systems with the growing demand for care services and improving quality of care. With regards to these goals, this research advances the understanding of the transformative impact of consumption practices in care services that pose an integral part of everyday life for elderly consumers and their care networks.
    Keywords: elderly consumers, consumption practices, life meaningfulness, transformative consumption, care service consumption, consumer vulnerability
    JEL: M31
    Date: 2020–07
  11. By: Bénédicte H. Apouey (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: This article explores subjective perceptions of retirement in France, using original quantitative data on the customers of a not-for-profit insurance company. The sample contains individuals aged 4084, who are either in the labour force (N=923) or retired (N=705). Perceptions of retirement are measured using closed questions on views of the retirement transition (these views can be positive, negative, or neutral) and definitions of retirement (retirement can be interpreted as a period of freedom, boredom, greater risk of precariousness, etc.). Using a number of different social indicators, we examine whether differences in social conditions translate into heterogeneous perceptions. We also investigate whether social differences in perceptions fade away with increasing age. Both working-age individuals and retirees generally have a positive view of the retirement transition and often define retirement as a period of freedom. Perceptions of retirement are shaped by social conditions: a higher level of education and income, greater wealth, better health, and stronger social involvement go hand in hand with rosier perceptions. Moreover, we uncover a strengthening of this social gradient with increasing age. Finally, perceptions are positively correlated with satisfaction in various domains, for retirees.
    Keywords: Retirement,Career's end,Ageing,Perceptions,Social conditions,Satisfaction,France
    Date: 2020–07
  12. By: Truc Thi Mai Bui; Patrick Button; Elyce G. Picciotti
    Abstract: We summarize some of the early effects and discuss possible future effects of the COVID-19 pandemic and recession on the employment outcomes of older workers in the United States. We start by discussing what we know about how older workers faired in prior recessions in the United States and how COVID-19 and this recession may differ. We then estimate some early effects of the COVID-19 pandemic and recession on employment and unemployment rates by age group and sex using Current Population Survey data. We calculate employment and unemployment rates multiple ways to account for the complicated employment situation and possible errors in survey enumeration. We find that while previous recessions, in some ways, did not affect employment outcomes for older workers as much, this recession disproportionately affected older workers of ages 65 and older. For example, we find that unemployment rates in April 2020 increased to 15.43% for those ages 65 and older, compared to 12.99% for those ages 25-44. We also find that COVID-19 and the recession disproportionately affected women, where women have reached higher unemployment rates than men, which was consistent for all age groups and unemployment rate measures we used.
    JEL: I14 J14 J16 J26
    Date: 2020–06
  13. By: Sultana, Abida; McKyer, E. Lisako J.; Hossain, Md Mahbub
    Abstract: The coronavirus disease (COVID-19) pandemic has affected health systems globally with a growing need for hospital beds and other institutional resources. Older adults are highly vulnerable to COVID-19 infection and associated adverse outcomes, whereas they often experience chronic diseases requiring institutional care. Hospital at home (HAH) is a strategic approach that may provide hospital-level care for older adults in their home settings. HAH may potentially minimize the health risks associated with COVID-19, ensure timely care for other health problems, improve health outcomes, reduce costs, increase satisfaction, and make institutional resources available for other patients during this pandemic. Healthcare providers, social workers, policymakers, and other key stakeholders should assess and address existing challenges for ensuring optimal geriatric care during this pandemic and improve the collective societal responses to the COVID-19 pandemic and future public health emergencies.
    Date: 2020–07–15
  14. By: Pretnar, Nick
    Abstract: Using endogenous, age-dependent measures of the value of statistical lives (VSL), this paper examines the demographic implications of recessions driven by disease contagions. Depending on the age-distribution mortality profile of the disease, long-run welfare losses resulting from the recession may outweigh lost VSL’s directly attributable to the disease. This is because disease contagions that induce high levels of hospitalization simultaneously impact aggregate output, via a recession caused by social-distancing, and the productivity of health care services. The efficiency of health investment falls driving down life expectancy (LE). VSL’s fall both because LE’s fall and the marginal value of health care investment falls. Using the Hall and Jones (2007) model of age-specific, endogenous health investment, it is shown that the COVID-19 crisis of 2020 will lead to lost welfare for young agents that exceeds VSL’s lost from the disease. If COVID-19 had the same age-mortality profile as the 1918 Spanish Flu, where more young agents died, contagion-mitigation policies that cause deep recessions would still be socially optimal since more of the high-valued lives of young people would be saved.
    Keywords: health, inequality, general welfare, value of statistical life, macroeconomics
    JEL: E2 I14 J17
    Date: 2020–06–11
  15. By: Fei Han
    Abstract: Japan’s aging and shrinking population could lower the natural rate of interest and, together with low inflation expectations, challenge the Bank of Japan’s efforts to reflate the economy. This paper uses a semi-structural model to estimate the impact of demographics on the natural rate in Japan. We find that demographic change has a significantly negative impact on the natural rate by lowering trend potential growth. We also find that the negative impact has been increasing over time amid stronger demographic headwinds. These findings highlight the importance of boosting potential growth to offset the negative demographic impact and lift the natural rate in Japan.
    Keywords: Real interest rates;Negative interest rates;Interest rate policy;Economic growth;Interest rate increases;Demographic change,natural rate of interest,monetary policy,Japan,natural rate,Turunen,potential growth,Pescatori,real interest rate
    Date: 2019–02–15
  16. By: Gordon Dahl; Claus Thustrup Kreiner; Torben Heien Nielsen; Benjamin Ly Serena
    Abstract: We decompose changing gaps in life expectancy between rich and poor into differential changes in age-specific mortality rates and differences in “survivability”. Declining age-specific mortality rates increases life expectancy, but the gain is small if the likelihood of living to this age is small (ex ante survivability) or if the expected remaining lifetime is short (ex post survivability). Lower survivability of the poor explains half of the recent rise in life expectancy inequality in the US and the entire rise in Denmark. Cardiovascular mortality declines favored the poor, but differences in lifestyle-related survivability led inequality to rise.
    JEL: H51 I14 J11
    Date: 2020–07
  17. By: Bernd Genser; Robert Holzmann
    Abstract: The Dutch pension system is internationally top-ranked as a well-designed three-pillar system. Moreover, almost all forms of pension benefits are expenditure taxed in line with the European Commission’s recommendations. Consequently, the Dutch pension policy approach could be regarded as a welcome blueprint for pension policy reform, currently on the agenda of all EU member countries. This paper focuses on the taxation of Dutch pensions and identifies two classes of problems that challenge the suitability of deferred pension taxation. First, cash flow taxation of pensions erodes the tax equity objectives of a progressive income tax. Second, deferred pension taxation generates a double fairness dilemma in a world with free cross-border migration and double taxation treaties in accordance with the OECD Model Tax Convention. The paper argues that these problems, as well as other minor problems in Dutch pension taxation, could be solved by replacing the Netherlands’ current system of deferred income taxation of pensions with a frontloaded expenditure tax system.
    Keywords: pension taxation, front-loaded expenditure taxation, progressivity erosion, international migration, OECD model tax convention
    JEL: H24 H55 H87 F22
    Date: 2020
  18. By: Anna Veremchuk
    Abstract: The aim of this paper is to study the gender pension gap in Europe based on the newest EU-SILC data from the 2018 wave. The contribution of the paper is twofold. First, it provides evidence on factors shaping the gender pension gap in a large number of EU countries. Second, it analyses the relationship between the pension gap and (1) the coverage of occupational (second pillar) pensions and (2) gender attitudes. The main factor contributing to gender inequality in pension income is the number of years in employment. The influence of tertiary education is in the direction of increasing the gap, while the effect is the opposite when the hourly labour income gap is considered. The higher coverage of occupational pensions corresponds to a higher gender pension gap. This implies that the privatisation of pension plans can lead to the conversion of a wage gap into a pension income gap and reinforces women’s disadvantage after retirement. In addition, a positive relationship is observed between unexplained portions of the pension income gap and the labour income gap. This could justify the hypothesis that unexplained portions are formed by the same factors persistent over time. One such factor could be gender norms; it has been found that countries with more gender equality support have lower unexplained portions of the labour income and pension gaps.
    Keywords: gender gap, pension, gender equality, gender attitudes
    Date: 2020
  19. By: Evamdrou, Maria; Falkingham, Jane; Qin, Min; Vlachantoni, Athina
    Abstract: On 23 March 2020 the UK went into lockdown in an unprecedented step to attempt to limit the spread of coronavirus. Government advice at that time was that all older people aged 70 and over should stay at home and avoid any contact with non-household members. This study uses new data from the Understanding Society COVID 19 survey collected in April 2020, linked to Understanding Society Wave 9 data collected in 2018/19, in order to examine the extent of support received by individuals aged 70 and over in the first four weeks of lockdown from family, neighbours or friends not living in the same household, and how that support had changed prior to the outbreak of the coronavirus pandemic. The research distinguishes between different types of households as, given with guidance not to leave home and not to let others into the household, those older people living alone or living only with a partner also aged 70 and above are more likely to be particularly vulnerable. The results highlight both positive news alongside causes for concern. The receipt of assistance with Instrumental Activities of Daily Living (IADLs), especially shopping, has increased particularly among those living alone or with an older partner, reflecting the rise of volunteering and community action during this period. However, not all older people reported a rise, and the majority reported ‘no change’, in the support received. Moreover, amongst those older people reporting that they required support with at least one Activity of Daily Living (ADL) task prior to the pandemic, around one-quarter reported receiving no care from outside the household and one-in-ten of those with two or more ADL care needs reported receiving less help than previously. Although formal home care visits have continued during the pandemic to those who have been assessed by the local government to be in need, it is important to acknowledge that some older people risk not having the support they need.
    Date: 2020–06–22
  20. By: Michael Papadopoulos (Schwartz Center for Economic Policy Analysis (SCEPA))
    Abstract: This study relates the rise of alternative work arrangements, particularly among older workers, with low reservation wages, a result of low bargaining power brought on by decreased attachment to career jobs and growing retirement income inadequacy. I utilize a linked sample between the RAND-Princeton Contingent Worker Survey and the American Life Panel’s Health and Retirement Study, to estimate reservation wages via a two step process. I first estimate market wages on offer for non-employed people, then estimate the gap between market and reservation wages via a probit explaining probability of employment. I first confirm that my estimations for reservation wages follow expected patterns as exemplified in Hofler and Murphy (1995)’s “seven tests.” I then show that work in alternative work arrangements (on-call, temp agency, contract firm and gig work) is associated with a decrease in reservation wages of $4.47- $4.53 per hour, whereas work as an independent contractor or self-employed worker is associated with increased reservation wages by $3.72-$3.89 per hour. Whereas prior literature focuses on firm-centric explanations for an increase in alternative work, these findings point to supply-side factors which also contribute to an increase. Proposals to reform established surveys to better track work arrangements and policies to increase financial preparedness for retirement are discussed.
    Keywords: alternative work, bargaining power, retirement, wages, labor
    JEL: J29 J81 J30 J31 J38 E24
    Date: 2020–02
  21. By: Sarah Marchal; Linus Siöland
    Abstract: This paper for the first time compares trends in minimum income protection for three different target groups: the working, the non-working (but able to work) of active age and the elderly. It aims to provide an inventory of recent changes in minimum income protection, while at the same time highlighting differences in policy treatment in the latest decennium, offering an exploration of the potential concerns and reasoning behind benefit setting for different target groups. We use new data tracking minimum income protection generosity for the period 2009-2018, with indicators carefully calibrated in order to reflect the legally guaranteed minimum situation in each EU Member State.
    Date: 2019–09
  22. By: Arolas, Héctor Pifarré i; Acosta, Enrique (Max Planck Institute for Demographic Research); Casasnovas, Guillem López; Lo, Adeline; Nicodemo, Catia; Riffe, Tim; Myrskylä, Mikko
    Abstract: Understanding the mortality impact of COVID-19 requires not only counting the dead, but analyzing how premature the deaths are. We calculate years of life lost (YLL) across 42 countries due to COVID-19 attributable deaths, and also conduct an analysis based on estimated excess deaths. As of June 13th 2020, YLL in heavily affected countries are 2 to 6 times the average seasonal influenza; over two thirds of the YLL result from deaths in ages below 75 and one quarter from deaths below 55; and men have lost 47% more life years than women. The results confirm the large mortality impact of COVID-19 among the elderly. They also call for heightened awareness in devising policies that protect vulnerable demographics losing the largest number of life-years.
    Date: 2020–06–23
  23. By: Basso, Henrique S.; Jimeno, Juan F
    Abstract: Demographic changes and a new wave of innovation and automation are two main structural trends shaping the macroeconomy in the next decades. We present a general equilibrium model with a tractable life-cycle structure that allows the investigation of the main transmission mechanisms by which demography and technology affect economic growth. Due to a trade-off between innovation and automation, lower fertility and population ageing lead to a reduction in GDP per capita growth and the labour income share. Assuming different labour market configurations and scenarios for the integration of robots in economic activity only partially compensate for these effects.
    Keywords: automation; Innovation; Population Ageing
    JEL: J11 O31 O40
    Date: 2019–11
  24. By: Zuo Quan Xu; Harry Zheng
    Abstract: This paper studies an optimal investment and consumption problem with heterogeneous consumption of basic and luxury goods, together with the choice of time for retirement. The utility for luxury goods is not necessarily a concave function. The optimal heterogeneous consumption strategies for a class of non-homothetic utility maximizer are shown to consume only basic goods when the wealth is small, to consume basic goods and make savings when the wealth is intermediate, and to consume small portion in basic goods and large portion in luxury goods when the wealth is large. The optimal retirement policy is shown to be both universal, in the sense that all individuals should retire at the same level of marginal utility that is determined only by income, labor cost, discount factor as well as market parameters, and not universal, in the sense that all individuals can achieve the same marginal utility with different utility and wealth. It is also shown that individuals prefer to retire as time goes by if the marginal labor cost increases faster than that of income. The main tools used in analysing the problem are from PDE and stochastic control theory including viscosity solution, variational inequality and dual transformation.
    Date: 2020–08
  25. By: Villarreal, Héctor; Macías, Alejandra
    Abstract: Este trabajo analiza la institucionalidad del sistema de jubilaciones y pensiones en México, considerando, tanto el comportamiento global del sistema, como la situación específica de los subsistemas que lo componen. El sistema de pensiones en México cuenta con una institucionalidad compleja que incluye, a nivel federal, siete instituciones que entregan beneficios en esquemas contributivos y no contributivos, sin contar los subsistemas creados en entidades federativas; municipios y universidades. Por tanto, es un sistema pensionario fragmentado, con reglas y requisitos dispares entre ellos y beneficios desiguales para la población. En el documento, se discuten aspectos relativos a las políticas públicas que podrían implementarse en el país para mantener el sistema sobre una trayectoria financiera sostenible.
    Date: 2020–07–25
  26. By: Bernal Lobato, Noelia
    Abstract: El presente informe estudia el gasto público en el sistema peruano de pensiones. En él, se detalla la institucionalidad del sistema, describiendo las características y parámetros de cada subsistema, tanto civiles como militares, así como contributivos y no contributivos. También se analizan las instituciones que administran y regulan cada uno, así como la evolución de la cobertura de trabajadores y pensionados en cada uno de los subsistemas. Se estudia la evolución del gasto público en pensiones para el periodo 2000-2017 y se recoge información sobre los ingresos del sistema y estudios actuariales. Finalmente, se realiza un balance financiero y se proyecta el gasto público hasta el año 2075, con el objetivo de analizar la sostenibilidad financiera del sistema de pensiones en las próximas décadas.
    Date: 2020–07–22
  27. By: Lorenzo, Fernando
    Abstract: Este trabajo analiza la institucionalidad del sistema de jubilaciones y pensiones en Uruguay, considerando, tanto el comportamiento global del sistema, como la situación específica de los subsistemas que lo componen. Se destaca el reciente proceso de expansión de la cobertura del sistema, fundamentalmente en el bloque principal del sistema mixto que rige desde 1996 y se discuten aspectos relativos a las políticas públicas que podrían implementarse en Uruguay para mantener el sistema sobre una trayectoria financiera sostenible.
    Date: 2020–07–24
  28. By: Cetrángolo, Oscar; Grushka, Carlos
    Abstract: Este documento ofrece una descripción del sistema de pensiones en Argentina, su organización institucional, evolución reciente, cobertura, gasto público en sus diferentes componentes y un análisis de su sostenibilidad financiera. Teniendo en cuenta la acentuada fragmentación del sistema (donde existe un amplio desarrollo de diversos esquemas contributivos, semicontributivos y no contributivos), el análisis se ha detenido en los rasgos y la diferente situación de cada uno de sus componentes, así como en la elevada cobertura que muestra el sistema en su conjunto. El estudio se completa con el señalamiento de una serie de reformas necesarias para asegurar su sostenibilidad de mediano plazo.
    Date: 2020–07–27

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