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on Economics of Ageing |
| By: | Plamen Nikolov; Alan Adelman |
| Abstract: | Higher life expectancy and rapidly aging populations in developing countries, especially in the last three decades, have created the need for policymakers to introduce pension programs in developing countries. China launched the New Rural Pension Scheme (NRPS) in 2009 to ease internal demographic pressures and concerns about old-age poverty. Using data from the introduction of the NRPS in China, we estimate the effects of pension benefits, due to participation in the NRPS, on individual cognition, measured by episodic memory and intact mental status, among individuals aged 60 and above. We find large negative effects of the provision of pension benefits on cognitive functioning among the elderly. We detect the most substantial impact of the program to be on delayed recall, a measure implicated in neurobiological research as a significant predictor of the onset of dementia. We show suggestive evidence that the program leads to stronger negative impacts among the female sample. Our findings support the mental retirement hypothesis, that decreased mental activity results in atrophy of cognitive skills. We show that retirement plays a significant role in explaining cognitive decline at older ages. |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2007.05884&r=all |
| By: | Bernhard Ebbinghaus; Kenneth Nelson; Rense Nieuwenhuis |
| Abstract: | While the financial sustainability of pension systems has been high on reform agendas, the adequacy of retirement incomes has only recently come into focus. This chapter analyses old-age poverty from a comparative and longitudinal perspective using repeated waves of cross-sectional micro-level income data from the Luxembourg Income Study (LIS). We focus on high-income OECD countries that experienced demographic ageing and substantial pension reforms since the mid-1980s, and analyse old age poverty in terms of relative income positions and purchasing capacity. Overall, there has been a secular trend towards a decline in old age poverty, which has converged towards the poverty rates observed in the working age population. However, since ongoing pension reforms in several countries have reduced public benefits, fostered prefunded savings, augmented the retirement age, and strengthened the link between contribution histories and old-age incomes, we identify population subgroups that have difficulties in gaining sufficient pension credits or savings into individual pension plans during their working lives to escape poverty in old age, including women, migrants, and those with lower education. We also present examples of poverty trends across synthetic cohorts in old age. Overall, we observe that more recent cohorts are better protected against poverty in old age compared to cohorts that were born longer ago. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:lis:liswps:777&r=all |
| By: | Huixin Bi; Sarah Zubairy |
| Abstract: | We explore the evolution of pension policy across countries and investigate the macroeconomic effects of pension structural reforms in recent decades, in particular those with implementation delays. We first document chronological changes in pension policy for 10 OECD countries between 1962 and 2017. The new data set shows that pension systems rapidly expanded between the 1960s and 1980s, followed by a wave of retrenchments since the 1990s. Structural pension reforms, which are motivated by long-run fiscal sustainability concerns, often come with significant implementation delays. We find that when structural pension retrenchments are implemented without delays, people close to retirement stay in the workforce longer to compensate for the decline in their pensions, leading to a decline in old-age pension spending. News about structural pension retrenchments in the future, however, leads people close to retirement to exit the labor market prior to the reform being implemented. As a result, government spending on old-age pensions tends to increase, rather than decrease, over the medium term. This effect is particularly prevalent for pension reforms that change retirement age and contribution years and that come with longer implementation delays. |
| Keywords: | Fiscal foresight; Pension reform; Narrative approach |
| JEL: | E62 H3 H55 |
| Date: | 2020–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:88577&r=all |
| By: | Kettlewell, Nathan (University of Technology, Sydney); Lam, Jack (University of Queensland) |
| Abstract: | Social support is increasingly acknowledged as an important resource for promoting wellbeing. We test whether social support changes around retirement. We also examine whether social support moderates dynamics in mental wellbeing around retirement and consider both own and spouse's retirement. Using longitudinal data from Australia, we find little effect of own or spouse's retirement on social support. However, in fixed-effects models, dynamics in mental wellbeing are significantly different between those with low/high social support. Using pension eligibility as an instrument, we find that own retirement causally improves mental wellbeing for women (weaker evidence for men) and by a similar degree for those with low/high social support. We also estimate responses to life satisfaction and find evidence that spill-over benefits from spousal retirement are much larger for individuals with low social support. |
| Keywords: | retirement, social support, Australia, couples, mental wellbeing |
| JEL: | I10 H55 J14 J26 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13403&r=all |
| By: | Anek Belbase; Laura D. Quinby |
| Abstract: | Roughly one in four state and local government workers are not covered by Social Security and, unless they have a sufficient work history in the private sector, will rely solely on their employer for pensions and disability insurance. An important question is how these employer-provided benefits compare to the benefits that these workers might have received through Social Security. In other words, do workers who are outside of the Social Security system receive an adequate level of protection against old-age poverty and long-term disability? While prior work has examined the adequacy of pension benefits for workers who are not covered by Social Security, little is known about the disability insurance (DI) that these workers receive. This brief fills the gap by analyzing the rules governing DI benefits in 67 state and local programs (referred to as ÒSocial Security-replacementÓ programs), which encompass around 70 percent of all uncovered public sector workers. The discussion proceeds as follows. The first section provides background on Social Security disability insurance (SSDI) benefits and the types of state and local workers who are not covered by the program. The second section describes a new dataset of state and local DI programs for uncovered workers that was created for this study. The third section uses this dataset to compare eligibility requirements across state and local programs with those of SSDI, while the fourth section analyzes how benefit levels may differ for eligible workers. The last section concludes that state and local DI programs provide relatively generous protection to older workers who are most at risk of experiencing a disability. Specifically, state and local eligibility requirements are less strict than SSDI, and most long-tenured employees earn higher replacement rates. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:crr:slpbrf:slp71&r=all |
| By: | Ruhose, Jens ((CEE) Centre D'Ètudes de L'Emploi); Thomsen, Stephan L. (Leibniz University of Hannover); Weilage, Insa (Leibniz University of Hannover) |
| Abstract: | Adult education can mitigate the productivity decline in aging societies if older workers are willing to learn. We examine a generous partial retirement reform in Germany that led to a massive increase in early retirement. Using county-level administrative data on voluntary education activities, we employ a difference-in-differences approach for identification. The estimates show a strong increase in participation in adult education, specifically in cognitively demanding courses, for early retirees who would have continued working in the absence of the reform. This supports the notion of an intrinsic willingness of older individuals to acquire skills and abilities independent of financial incentives. |
| Keywords: | partial retirement, early retirement, older workers, adult education, generalized difference-in-differences |
| JEL: | J14 J24 J26 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13416&r=all |
| By: | Matthew S. Rutledge |
| Abstract: | Since World War II, many workers have come to count on their jobs to provide health insurance and retirement plans. Indeed, the presence of these benefits is often seen as a marker of Òtraditional employmentÓ or, simply, a Ògood job.Ó When workers miss out on these benefits through their employer, to what extent do they find alternative sources? This brief, based on a recent study, explores how older workers in Ònontraditional jobsÓ that lack such benefits can gain health insurance and retirement coverage outside the employment relationship. On the health side, workers have several options, including a spouseÕs employer, an individual insurance policy, and public programs such as Medicaid. On the retirement side, workersÕ main options are to save through an individual retirement account (IRA) or rely on a spouse with a 401(k) to save more to compensate. The discussion proceeds as follows. The first section describes the measure of nontraditional work and the characteristics of older workers with these jobs. The second section identifies the possible sources of health insurance for the workers in nontraditional jobs, noting an uptick in non-employer alternatives after the introduction of the Affordable Care Act (ACA). The third section looks at retirement saving options for the workers in nontraditional jobs, assessing the potential of IRAs and spousal 401(k)s. The final section concludes that, on the health side, most older workers in nontraditional jobs are able to find coverage, often through their spouseÕs employer or, increasingly, Medicaid, but about one-third remain uninsured. On the retirement side, older workers with nontraditional jobs largely end up with no viable savings option. |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2020-12&r=all |
| By: | Sánchez Serrano, Antonio; Peltonen, Tuomas |
| Keywords: | ageing population, financial stability, interest rates, pensions |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:srk:srkops:202017&r=all |
| By: | Fausto Brito (Cedeplar/UFMG); Pedro Vasconcelos Maia do Amaral (Cedeplar/UFMG) |
| Abstract: | One of the biggest concerns of demographers, economists, and other social scientists after World War II was the acceleration of population growth in the less developed countries. Currently, their concern is no longer about a possible demographic explosion, but about the consequences of low population growth on age structure, especially the aging of the population. The purpose of this paper is to show how the demographic transition has taken place unevenly across countries from a broad set of variables for 198 countries with data available in the Prospects 2017 of the United Nations Population Division for the 1950s. to 2060. We construct a Demographic Transition Index based on Principal Component Analysis, which will allow an intertemporal analysis of the transition evolution of different countries. The results show the inequality in the demographic transition between countries and the consequences on the growth and distribution of world population. |
| Keywords: | demographic transition; demographic transition index; inequality |
| JEL: | J10 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td625&r=all |
| By: | Devolder, Pierre |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:aiz:louvad:2019011&r=all |
| By: | Mathias Kronlund; Veronika K. Pool; Clemens Sialm; Irina Stefanescu |
| Abstract: | We examine the effects of a 2012 regulatory reform that mandated fee and performance disclosures for the investment options in 401(k) plans. We show that participants became significantly more attentive to expense ratios and short-term performance after the reform. The disclosure effects are stronger among plans with large average contributions per participant and weaker for plans with many investment options. Additionally, these results are not driven by secular changes in investor behavior or sponsor-initiated changes to the investment menus. Our findings suggest that providing salient fee and performance information can mitigate participants' inertia in retirement plans. |
| JEL: | G11 G18 G23 G28 H31 H55 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27573&r=all |
| By: | Tamma A. Carleton; Amir Jina; Michael T. Delgado; Michael Greenstone; Trevor Houser; Solomon M. Hsiang; Andrew Hultgren; Robert E. Kopp; Kelly E. McCusker; Ishan B. Nath; James Rising; Ashwin Rode; Hee Kwon Seo; Arvid Viaene; Jiacan Yuan; Alice Tianbo Zhang |
| Abstract: | This paper develops the first globally comprehensive and empirically grounded estimates of mortality risk due to future temperature increases caused by climate change. Using 40 countries' subnational data, we estimate age-specific mortality-temperature relationships that enable both extrapolation to countries without data and projection into future years while accounting for adaptation. We uncover a U-shaped relationship where extreme cold and hot temperatures increase mortality rates, especially for the elderly, that is flattened by both higher incomes and adaptation to local climate (e.g., robust heating systems in cold climates and cooling systems in hot climates). Further, we develop a revealed preference approach to recover unobserved adaptation costs. We combine these components with 33 high-resolution climate simulations that together capture scientific uncertainty about the degree of future temperature change. Under a high emissions scenario, we estimate the mean increase in mortality risk is valued at roughly 3.2% of global GDP in 2100, with today's cold locations benefiting and damages being especially large in today's poor and/or hot locations. Finally, we estimate that the release of an additional ton of CO2 today will cause mean [interquartile range] damages of $36.6 [-$7.8, $73.0] under a high emissions scenario and $17.1 [-$24.7, $53.6] under a moderate scenario, using a 2% discount rate that is justified by US Treasury rates over the last two decades. Globally, these empirically grounded estimates substantially exceed the previous literature's estimates that lacked similar empirical grounding, suggesting that revision of the estimated economic damage from climate change is warranted. |
| JEL: | Q54 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27599&r=all |
| By: | Florian Hälg (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Jan-Egbert Sturm (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Niklas Potrafke (ifo Center for Public Finance and Political Economy, Munich, Germany) |
| Abstract: | We portray determinants of social expenditure in OECD countries. Many theories have been proposed to describe why social expenditure has increased in industrialized countries. Determinants include globalization, political-institutional variables such as government ideology and electoral motives, demographic change and economic variables such as unemployment. Scholars have used social expenditure as the dependent variable in many empirical studies. We employ extreme bounds analysis to examine robust predictors of social expenditure. Our sample includes 31 OECD countries over the period 1980-2016. The results suggest that budget deficits, trade globalization and fractionalization of the party system were negatively associated with social expenditure. Aging, unemployment, social globalization, coalition governments and public debt were positively associated with social expenditure. Moreover, social expenditure increased under left-wing governments when de facto trade globalization was pronounced. Results based on Bayesian model averaging corroborate the relationships found between banking crisis, de facto trade globalization, social globalization, legislative fractionalization, coalition governments, public debt and budget deficits on the one hand and social expenditure on the other. We conclude that policymakers in individual countries use domestic measures to design social policies – globalization, aging, and business cycles notwithstanding. |
| Keywords: | social expenditure, OECD countries, extreme bounds analysis, Bayesian model averaging |
| JEL: | I38 O11 O57 C23 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:20-475&r=all |
| By: | Nassirou Ibrahim; Alexandre Prud'Homme; Jolianne Bolduc; Roxane Borgès Da Silva |
| Abstract: | Le vieillissement de la population est un phénomène qui touche la majorité des sociétés occidentales. Ce phénomène se traduit par une croissance du poids relatif, en proportion de la population totale, des personnes âgées de 65 ans et plus, combinée à une décroissance de la proportion des autres groupes d’âge. Cette réalité démographique engendre de nouveaux enjeux sociaux et économiques concernant spécifiquement les aînés tels que l’accès au logement, la précarité financière, l’isolement social et la mise en place de structures adéquates (ex. : soins à domicile) permettant de combler les besoins en assistance et en soins. Des actions publiques sont alors nécessaires afin d’assurer une qualité de vie adéquate à ce groupe d’individus généralement plus vulnérables que l’ensemble de la population. Des données probantes et à jour sont essentielles à la prise de décisions et la mise en place d’actions concrètes. Si ces données existent aux niveaux fédéral et provincial, une carence s’observe au niveau régional. Il s’agit du cas de la région de Laval. Dans le but de combler cette insuffisance, ce document présente le portrait sociodémographique et économique des personnes de 65 ans et plus de la région de Laval à partir des données de recensement de Statistique Canada. |
| Keywords: | , Portrait sociodémographique et économique,Aînés,Région de Laval |
| Date: | 2020–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirpro:2020rp-17&r=all |
| By: | Nassirou Ibrahim; Alexandre Prud'Homme; Jolianne Bolduc; Roxane Borgès Da Silva |
| Abstract: | Le vieillissement de la population est un phénomène qui touche la majorité des sociétés occidentales. Ce phénomène se traduit par une croissance du poids relatif, en proportion de la population totale, des personnes âgées de 65 ans et plus, combinée à une décroissance de la proportion des autres groupes d’âge. Cette réalité démographique engendre de nouveaux enjeux sociaux et économiques concernant spécifiquement les aînés tels que l’accès au logement, la précarité financière, l’isolement social et la mise en place de structures adéquates (ex. : soins à domicile) permettant de combler les besoins en assistance et en soins. Des actions publiques sont alors nécessaires afin d’assurer une qualité de vie adéquate à ce groupe d’individus généralement plus vulnérables que l’ensemble de la population. Des données probantes et à jour sont essentielles à la prise de décisions et la mise en place d’actions concrètes. Si ces données existent aux niveaux fédéral et provincial, une carence s’observe au niveau régional. Il s’agit du cas de la région des Laurentides. Dans le but de combler cette insuffisance, ce document présente le portrait sociodémographique et économique des personnes de 65 ans et plus de cette région à partir des données du recensement de Statistique Canada. |
| Keywords: | , Portrait sociodémographique et économique,Aînés,Région des Laurentides |
| Date: | 2020–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirpro:2020rp-16&r=all |
| By: | Arenas de Mesa, Alberto |
| Abstract: | En América Latina, el bienestar de millones de personas de edad avanzada depende del adecuado funcionamiento de los sistemas de pensiones. Así, la sostenibilidad de los sistemas de pensiones corresponde a uno de los desafíos más relevantes, en particular, en tiempos de pandemia. Por ello, debería prestarse especial atención a los debates de política fiscal, los que están cada vez más vinculados con la sostenibilidad financiera de la protección social. Este documento entrega antecedentes para crear una base de datos del gasto público en los sistemas de pensiones en la región, así como proyecciones de los compromisos financieros de los esquemas previsionales. Ambas materias deberían ser áreas de estudio y análisis prioritarios en el ámbito de las políticas públicas. |
| Keywords: | PENSIONES, SEGURIDAD SOCIAL, GASTOS PUBLICOS, HACIENDA PUBLICA, INGRESOS FISCALES, POLITICA FISCAL, GENERO, ANCIANOS, POBREZA, SALUD, COVID-19, EPIDEMIAS, DERECHOS ECONOMICOS, SOCIALES Y CULTURALES, PENSIONS, SOCIAL SECURITY, PUBLIC EXPENDITURES, PUBLIC FINANCE, TAX REVENUES, FISCAL POLICY, GENDER, AGEING PERSONS, POVERTY, HEALTH, COVID-19, EPIDEMICS, ECONOMIC, SOCIAL AND CULTURAL RIGHTS |
| Date: | 2020–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col037:45945&r=all |
| By: | Jacob Goldin; Tatiana Homonoff; Richard W. Patterson; William L. Skimmyhorn |
| Abstract: | Deciding how much to save for retirement can be complicated. Drawing on a field experiment conducted with the Department of Defense, we study whether such complexity depresses participation in an employer-sponsored retirement saving plan. We find that simplifying one dimension of the enrollment decision, by highlighting a potential rate at which non-participants might contribute, increases participation in the plan. Similar communications that did not include a highlighted rate yield smaller effects. The results highlight how reducing complexity on the intensive margin of a decision (how much to contribute) can affect extensive margin behavior (whether to contribute at all) in a setting of policy interest. |
| JEL: | D14 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27575&r=all |
| By: | David Adeabah (University of Ghana, Legon, Ghana); Simplice A. Asongu (Yaoundé, Cameroon); Charles Andoh (University of Ghana, Legon, Ghana) |
| Abstract: | This study examines the impact of remittances and information and communication technology (ICT) on pension at the country level. Our empirical evidence, based on data from 96 countries, indicate a significant non-linearity between remittances, ICT and pension income coverage. First, we find a convex relation between remittances and pension income coverage, indicating that increases in remittance, initially decreases pension income coverage, but as remittance increases beyond a certain point, so too does pension income coverage. This inflection point, where the effect of remittances turns from negative to positive, is estimated to be around 3.09% of GDP. Second, we document a concave relationship between ICT (i.e. mobile subscription and internet penetration) and pension income coverage. An increase in ICT results in increased pension income coverage. However, when ICT reaches a certain point, any further increase is associated with lower pension income coverage. The estimated optimal point is found to be around 140.14 subscriptions (per 100 people) for mobile phone and 27.93 (per 100 people) for internet penetration, respectively. Other implications are discussed. |
| Keywords: | Pension income coverage; Remittances; Mobile subscription; Internet penetration; ICT |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:20/059&r=all |
| By: | Hainaut, Donatien; Denuit, Michel |
| Date: | 2020–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:aiz:louvad:2020001&r=all |