nep-age New Economics Papers
on Economics of Ageing
Issue of 2020‒09‒14
seventeen papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Revisiting the effect of statutory pension ages on the participation rate By David Turner; Hermes Morgavi
  2. The Impact of Social Security on Pension Claiming and Retirement: Active vs. Passive Decisions By Lalive, Rafael; Magesan, Arvind; Staubli, Stefan
  3. Self-selection in physical and mental health among older intra-European migrants By Constant, Amelie F.; Milewski, Nadja
  4. Pension Information and Women's Awareness By Angelici, Marta; Del Boca, Daniela; Oggero, Noemi; Profeta, Paola; Rossi, Maria Cristina; Villosio, Claudia
  5. Ageing, Health, Loneliness and Wellbeing By Tani, Massimiliano; Cheng, Zhiming; Piracha, Matloob; Wang, Ben
  6. Fertility Cost, Intergenerational Labor Division, and Female Employment By Haiyue Yu; Jin Cao; Shulong Kang
  7. The changing age-structure of Coronavirus SARS-CoV-2 deaths and cases a case study of Paraná, Brazil By Guimaraes, Raquel; Nepomuceno, Marília; Nasr, Acácia Maria Lourenço Francisco; Garcia,; Lopes, Maria Goretti David; Junior, Nestor Werner; Preto, Carlos Alberto Gebrim
  8. Socially Optimal Mistakes? Debiasing COVID-19 Mortality Risk Perceptions and Prosocial Behavior By Abel, Martin; Byker, Tanya; Carpenter, Jeffrey P.
  9. Does Concurrent Management of Mutual Funds and Pension Plans Create Conflicts of Interest? By Carmen Pilar Martí Ballester
  10. An Economic Model of the Covid-19 Pandemic with Young and Old Agents: Behavior, Testing and Policies By Luiz Brotherhood; Philipp Kircher; Cezar Santos; Michéle Tertilt
  11. Mental Health Effects of an Old Age Pension: Experimental Evidence for Ekiti State in Nigeria By Alzua, Maria Laura; Cantet, Maria Natalia; Dammert, Ana; Olajide, Daminola
  12. Intergenerational Residence Patterns and COVID-19 Fatalities in the EU and the US By Aparicio Fenoll, Ainoa; Grossbard, Shoshana
  13. Obstacles to Labour Market Participation among Arab Women in Israel By Miaari, Sami H.; Khattab, Nabil; Sabbah-Karkabi, Maha
  14. Vaccination Take-up and Health: Evidence from a Flu Vaccination Program for the Elderly By Brilli, Ylenia; Lucifora, Claudio; Russo, Antonio; Tonello, Marco
  15. Household savings, capital investments and public policies: What drives the German current account? By Ruppert, Kilian; Stähler, Nikolai
  16. Older People are Less Pessimistic about the Health Risks of Covid-19 By Pedro Bordalo; Katherine B. Coffman; Nicola Gennaioli; Andrei Shleifer
  17. Trends in age distribution of COVID-19 cases, hospitalizations, and deaths by race in the United States By Fabic, Madeleine Short; Choi, Yoonjoung

  1. By: David Turner; Hermes Morgavi
    Abstract: Many OECD governments have enacted, or are contemplating, future increases in statutory pension ages, sometimes provoking vociferous political opposition. Empirical cross-country estimation work consistently finds that coefficients on statutory pension ages are positive and highly statistically significant in explaining labour-force participation at older ages. There is also some consistency in the magnitude of the estimated effects across studies, although this magnitude seems surprisingly modest when translated into the implied effect on average retirement ages: an increase in statutory pension ages by one year is typically estimated to increase the average effective retirement age by only about two months.
    Keywords: labour supply, older workers, participation, statutory retirement ages
    JEL: J26 J21
    Date: 2020–09–14
  2. By: Lalive, Rafael (University of Lausanne); Magesan, Arvind (University of Calgary); Staubli, Stefan (University of Calgary)
    Abstract: We exploit a unique Swiss reform to identify the importance of passivity, claiming social security benefits at the Full Retirement Age (FRA). Sharp discontinuities generated by the reform reveal that raising the FRA while imposing small early claiming penalties significantly delays pension claiming and retirement, but imposing large penalties and holding the FRA fixed does not. The nature of the reform allows us to identify that between 47 and 69% of individuals are passive, while imposing additional structure point identifies the fraction at 67%. An original survey of Swiss pensioners reveals that reference-dependent preferences is the main source of passivity.
    Keywords: full retirement age, social security, regression discontinuity design, reference dependence
    JEL: H55 J21 J26
    Date: 2020–07
  3. By: Constant, Amelie F. (UNU-MERIT, Maastricht University, GLO, and Princeton University); Milewski, Nadja (University of Rostock, GLO)
    Abstract: The Healthy Immigrant Paradox found in the literature by comparing the health of immigrants to that of natives in the host country, may suffer from serious cultural biases. Our study evades such biases by utilizing a destination-origin framework, in which we compare the health of emigrants to that of their compatriots who stay in the country of origin. Isolating cultural effects can best gauge self-selection and host country effects on the health of emigrants with longer time abroad. We study both the physical and mental dimensions of health among European-born emigrants over 50, who originate from seven European countries and now live elsewhere in Europe. We use the Survey of Health, Ageing and Retirement in Europe and apply multi-level modeling. Regarding the physical health we find positive self-selection, beneficial adaptation effects, and effects from other observables for some but not all countries. With the notable exception of the German émigrés, we cannot confirm selection in mental health, while additional years abroad have only weak effects. Overall, living abroad has some favorable effects on the health of older emigrants. The economic similarity of countries and the free intra-European mobility mitigate the need for initial self-selection in health and facilitate the migration experience abroad.
    Keywords: panel data, physical health, mental health, older population, emigrants, multi-level models, Europe
    JEL: C23 F22 J11 J14 J15 J61 I12 I14 O15 O52
    Date: 2020–08–27
  4. By: Angelici, Marta (University of Milan Bicocca); Del Boca, Daniela (University of Turin); Oggero, Noemi (University of Turin); Profeta, Paola (Bocconi University); Rossi, Maria Cristina (University of Turin); Villosio, Claudia (Collegio Carlo Alberto)
    Abstract: We explore the role of financial and pension information in increasing women's knowledge and awareness of their future pension status, and consequently, in reducing the gender pension gap. A representative sample of 1249 Italian working women were interviewed to assess their knowledge about pensions and financial issues and about their own savings and personal wealth planned for retirement. The responses showed that their knowledge and awareness of retirement planning was limited. We then ran a randomized experiment to evaluate the effect of increased information regarding pensions on women's awareness, knowledge, and behaviors. Women in the treated group were provided information in the form of three short online tutorials. A follow-up survey shows that these women became more interested and aware of pension schemes and retirement options after completing the tutorials and were more likely to be better informed and keen to obtain further information. When looking at changes in behavior, we find that treated women who are closer to retirement are more likely to believe that they would make different work-life decisions if they received specific pension information in a timely fashion. They are also more likely to have a supplementary pension fund if they are concerned about their standard of living after retirement.
    Keywords: women, pension, savings, financial education
    JEL: H31 J22
    Date: 2020–08
  5. By: Tani, Massimiliano (University of New South Wales); Cheng, Zhiming (University of New South Wales); Piracha, Matloob (University of Kent); Wang, Ben (Macquarie University, Sydney)
    Abstract: Older people experience high rates of depression and suicide, yet they make a positive net contribution to the economy through activities such as employment, volunteering, and looking after grandchildren. The wellbeing of older people is therefore important not only on moral but also economic grounds. To understand which policies will facilitate the overall wellbeing, we use Australian data to explore the determinants of wellbeing and loneliness of natives and migrants in the 65-85 age group, taking into account the extent to which social networks contribute to the wellbeing and possible reduction in loneliness. Results show that social networks have a strong positive effect on wellbeing and a strong effect in reducing loneliness among both natives and migrants. The positive effect of social networks is stronger for females than males.
    Keywords: ageing, wellbeing, loneliness, social networks
    JEL: I31 J14
    Date: 2020–07
  6. By: Haiyue Yu (Dongbei University of Finance and Economics, Interdisciplinary Center for Social & Behavioral Studies); Jin Cao (Norges Bank); Shulong Kang (Dongbei University of Finance and Economics School of Finance)
    Abstract: China has set to increase the minimum retirement age, to ease the pressure from pension expenditure and the falling labor supply caused by the aging population. However, policy debates have so far neglected the crucial fact that families in China largely rely on retired grandparents for childcare. Using novel and high-quality survey data, we demonstrate that intrafamily downward labor transfer towards childcare significantly increases young females’ labor force participation rate and their labor income, and such effects do not exist for males. Furthermore, we show that the positive effects from grandparental childcare are higher for better-educated, urban females with younger children. This paper thus reveals a large, hidden cost in the new retirement policy — the reduced feasibility of grandparental support, due to postponed retirements, may crowd out productive labor of young females, — and rationalizes a series of social protection policies to accompany the phase-in of the new retirement scheme.
    Keywords: intergenerational labor division, grandparental childcare, female employment, human capital accumulation, minimum retirement age
    JEL: C24 J13 J22
    Date: 2019–01–16
  7. By: Guimaraes, Raquel (Federal University of Paraná); Nepomuceno, Marília; Nasr, Acácia Maria Lourenço Francisco; Garcia,; Lopes, Maria Goretti David; Junior, Nestor Werner; Preto, Carlos Alberto Gebrim
    Abstract: The goal of this paper is to explore the demographic evolution of the Coronavirus SARS-CoV-2 deaths and cases in the state of Paraná, Brazil. We focus on changes in the age-pattern of cases and deaths attributed to the COVID-19. Paraná is an interesting case of study in Brazil due to several aspects. First, it is one of the most developed states of the country. Second, the population growth rate is rapidly approaching zero growth, with an observed average growth rate of 0.78 percent per year in the decade 2010/2020, and of 0.28 percent per year in the period 2030/2040. Third, Parana has an older population age-structure than that of the whole country. Finally, although the state government pushed for earlier Non-Pharmaceutical Interventions to control the pandemic, data shows that they only took effect in the very late stages. Taken together, we claim that these aspects created a very particular setting, in which changes over time in the age-structure of the deaths attributed to COVID-19 could be observed: in the beginning of the pandemic, the age-structure of the deaths was concentrated among the elderly. As the pandemic unfolds, deaths were spreading over younger ages. Finally, we speculate on mechanisms behind the changes in the age structure of the COVID-19 deaths in Paraná.
    Date: 2020–07–31
  8. By: Abel, Martin (Middlebury College); Byker, Tanya (Middlebury College); Carpenter, Jeffrey P. (Middlebury College)
    Abstract: The perception of risk affects how people behave during crises. We conduct a series of experiments to explore how people form COVID-19 mortality risk beliefs and the implications for prosocial behavior. We first document that people overestimate their own risk and that of young people, while underestimating the risk old people face. We show that the availability heuristic contributes to these biased beliefs. Using information about the actual risk to debias people's own risk perception does not affect donations to the Centers for Disease Control but does decrease the amount of time invested in learning how to protect older people. This constitutes a debiasing social dilemma. Additionally providing information on the risk for the elderly, however, counteracts these negative effects. Importantly, debiasing seems to operate through the subjective categorization of and emotional response to new information.
    Keywords: risk perception, prosocial behavior, debiasing, experiment
    JEL: C91 D91 H41
    Date: 2020–07
  9. By: Carmen Pilar Martí Ballester
    Keywords: pension plans; mutual funds; side-by-side; Jensen’s Alpha; multi-index model; Spanish market. Palabras clave: planes de pensiones; fondos de inversión; alfa de Jensen; gestión conjunta; modelo multi-índice; mercado españo
    Date: 2020–01–01
  10. By: Luiz Brotherhood; Philipp Kircher; Cezar Santos; Michéle Tertilt
    Abstract: This paper investigates the importance of the age composition in the Covid-19 pandemic. We augment a standard SIR epidemiological model with individual choices on work and non-work social distancing. Infected individuals are initially uncertain unless they are tested. We find that older individuals socially distance themselves substantially in equilibrium. Confining the old even more reduces their welfare. Confining the young extends the duration of the epidemic, with negative consequences on the old if the epidemic cannot be controlled after confinement. Testing and quarantines save lives, even if conducted just on the young, as does separation of activities by age. Combining policies can increase the welfare of both the young and the old.
    Keywords: Covid-19, testing, social distancing, age-specific policies
    JEL: E17 C63 D62 I10 I18
    Date: 2020–08
  11. By: Alzua, Maria Laura; Cantet, Maria Natalia; Dammert, Ana; Olajide, Daminola
    Keywords: Community/Rural/Urban Development, Research Methods/Statistical Methods, Agricultural and Food Policy
    Date: 2020–07
  12. By: Aparicio Fenoll, Ainoa; Grossbard, Shoshana (San Diego State University)
    Abstract: We study how patterns of intergenerational residence possibly influence fatalities from Covid-19. We use aggregate data on Covid-19 deaths, the share of young adults living with their parents, and a number of other statistics, for the 27 countries in the European Union, the UK, and all US states. Controlling for population size, we find that more people died from Covid in countries or states with higher rates of intergenerational co-residence. This positive correlation persists even when controlling for date of first death, presence of lockdown, Covid tests pc, hospital beds per capita, proportion of elderly, GDP pc, government's political orientation, percentage urban, and rental prices. The positive association between co-residence and fatalities is led by the US. Our estimates pass the Oster test for selection on unobservables.
    Keywords: COVID-19, intergenerational co-residence, family arrangements
    JEL: J1 I1
    Date: 2020–07
  13. By: Miaari, Sami H. (Tel Aviv University); Khattab, Nabil (Doha Institute for Graduate Studies); Sabbah-Karkabi, Maha (University of Haifa)
    Abstract: This study investigates the factors that underlay the low labour force participation rate among Palestinian-Arab women in Israel relative to Jewish women despite the high educational attainment among this group. We focus on four factors that could explain this pattern: (i) socioeconomic factors such as age and education, (ii) culture factors such as the religiosity of the individual-woman and her family, (iii) family structure and related public policies, and (iv) the early retirement of Arab women from the labour market. We find that all four of these factors affect the probability of Palestinian-Arab women participating in the labour market. We conclude by discussing the implications of our findings for labour market policies.
    Keywords: labour market participation, Arab women, public policy, gender, nationality, religiosity, early retirement
    JEL: J01 J15 J13 J18 J26
    Date: 2020–08
  14. By: Brilli, Ylenia (University of Verona); Lucifora, Claudio (Università Cattolica del Sacro Cuore); Russo, Antonio (Agency for Health Protection of Milan); Tonello, Marco (Catholic University Milan)
    Abstract: We analyze the effects of a vaccination program providing free flu vaccine to individuals aged 65 or more on take-up behavior and hospitalization. Using both administrative and survey data, we implement a regression discontinuity design around the threshold at age 65, and find that the effect of the program on take-up ranges between 70% and 90% of the average vaccination rate for individuals aged less than 65. We show that this effect is not entirely driven by an income channel, but also depends on the expected benefits of vaccination. The analysis on health outcomes shows that the program reduces the likelihood of emergency hospitalization.
    Keywords: public health, influenza, vaccination, health prevention policies
    JEL: I12 I18 J10
    Date: 2020–07
  15. By: Ruppert, Kilian; Stähler, Nikolai
    Abstract: In this article, we present a model that can account for the changes in the Germancurrent account balance since the 2000s. Our results suggest that an array of struc-tural tax and labor market reforms (Agenda 2010), population aging and pensionreforms led to an increase in the household savings rate in Germany until about2010. As domestic investment opportunities could not absorb these additional sav-ings, they were partly invested abroad. The German current account-to-GDP ratiorose. After 2010, private savings remained rather stable, but opportunities to investin Germany declined further. Our simulations suggest that a tight fiscal stance inGermany (combined with an expansionary stance in the rest of the world), under-investment in the corporate sector and productivity gains in emerging economiesafter 2010 significantly contributed to this.
    Keywords: Global Imbalances,Population Aging,Labor Market Reforms,Fiscal Policy,DSGE Modelling
    JEL: H2 J1 E43 E62
    Date: 2020
  16. By: Pedro Bordalo; Katherine B. Coffman; Nicola Gennaioli; Andrei Shleifer
    Abstract: A central question for understanding behaviour during the Covid-19 pandemic, at both the individual and collective levels, is how people perceive the health and economic risks they face. We conducted a survey of over 1,500 Americans from May 6 – 13, 2020, to understand these risk perceptions. Here we report some preliminary results. Our most striking finding is that perceived personal health risks associated with Covid-19 fall sharply with age.
    JEL: D03 I1
    Date: 2020–07
  17. By: Fabic, Madeleine Short; Choi, Yoonjoung
    Abstract: COVID-19 cases are quickly growing across the United States with numerous states reporting that the proportion of cases among young people is ballooning. COVID-19 data are typically presented cumulatively and by only one demographic characteristic. Understanding and communicating complex demographic trends is imperative to recognize population-level vulnerabilities and inform tailored public health responses. Using the latest COVID-19 Case Surveillance Public Use Data by the Centers for Disease Control and Prevention (CDC), we aim to: a) assess one dimension of reporting quality-- data completeness; and b) examine national time-trends in the age pattern of COVID-19 cases, hospitalizations, and deaths overall as well as by race and ethnicity. Reporting of race and ethnicity in COVID-19 cases has been persistently poor, multiple months into the pandemic. Our analysis also shows unequal and changing age-patterns among cases, hospitalizations, and deaths by race and ethnicity. Age-pattern differences between whites and other races are widening.
    Date: 2020–08–12

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