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on Economics of Ageing |
| By: | Morris, Todd |
| Abstract: | Many governments are aiming to extend working lives by raising the age at which people can claim retirement pensions. This makes it vital to understand how these policies affect retirement decisions. In this paper, I revisit the labor supply effects of a major Australian reform that increased women’s pension age from 60 to 65. Atalay and Barrett (2015) studied these effects using repeated household surveys and a differences-in-differences design in which male cohorts form the comparison group. They estimate that the reform increased female labor force participation by 12 percentage points. Using earlier data, I show that the parallel-trends assumption did not hold before the reform because of a strong female-specific trend in participation rates across the relevant cohorts. Accounting for this trend, the estimated effect on female participation falls by two-thirds and becomes statistically insignificant at conventional levels. This highlights the importance of carefully assessing and controlling for trends across cohorts when evaluating pension reforms, which are typically phased in across cohorts. |
| Date: | 2020–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:uznmp&r=all |
| By: | Della Giusta, Marina (University of Reading); Longhi, Simonetta (University of Reading) |
| Abstract: | Several reforms increased the state pension age (SPA) in the UK and equalised it to age 65 for both men and women. We use panel data and a difference-in-difference approach to comprehensively analyse the direct and indirect effects of these reforms, investigating mechanisms for indirect effects. We also analyse the heterogeneity of the effects of smaller versus larger increases in SPA, by partnership status, as well as spill-over effects to male partners. Consistent with previous research, we find a positive impact of the reform on employment and labour force participation, but also large negative impacts on various aspects of personal, financial, and mental wellbeing. The effect is larger for women who have to wait longer to reach their SPA, and smaller for women with a partner (compared to those without a partner). The effect of the reform partially spills over to affected women partner's labour market participation. Our results can be generalised to other countries that are seeking to implement similar reforms. |
| Keywords: | policy reform, retirement, labour supply, care supply, leisure, wellbeing |
| JEL: | I31 J22 J26 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13587&r=all |
| By: | Yuji Horioka, Charles |
| Abstract: | The selfish life-cycle model or hypothesis is, together with the dynasty or altruism model, the most widely used theoretical model of household behavior in economics, but does this model apply in the case of a country like Japan, which is said to have closer family ties than other countries? In this paper, we first provide a brief exposition of the simplest version of the selfish life-cycle model and then survey the literature on household saving and bequest behavior in Japan in order to answer this question. The paper finds that almost all of the available evidence suggests that the selfish life-cycle model applies to at least some extent in all countries but that there is more consistent support for this model in Japan than in the United States and other countries. It then explores possible explanations for why the life-cycle model is more consistently supported in Japan than in other countries, attributing this finding to government policies, institutional factors, economic factors, demographic factors, and cultural factors. Finally, it shows that the findings of the paper have many important implications for economic modeling and for government tax and expenditure policies. |
| Keywords: | Age structure, altruism, bequest motives, borrowing constraints, consumption, culture, dissaving, dynasty model, elderly, family ties, household saving, inheritances, intergenerational transfers, Japan, life-cycle model, religiosity, retirement, Ricardian equivalence, saving motives, selfishness, social norms, D11, D12, D14, D15, D64, E21, J14 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:agi:wpaper:00000182&r=all |
| By: | Charles McCLEAN; ONO Yoshikuni |
| Abstract: | Elected officials tend to be older than most of the constituents they represent. Is this because voters generally prefer older politicians over younger ones? We investigate this question by conducting two novel survey experiments in Japan where we ask respondents to evaluate the photos of hypothetical candidates for mayor, and then alter candidate faces using artificial neural networks to make them appear as if they are younger or older, while keeping their facial structure and contours intact. Contrary to the observed candidate pool for mayors, the voters in our experiments disliked elderly candidates the most, but viewed younger candidates as equally favorable as middle-aged candidates. We also find that younger and middle-aged voters view candidates from their age group more favorably than others, whereas older voters do not, and that all voters use age as a heuristic for a candidate's issue emphases and traits. We then provide evidence for the external validity of our results using new data on actual mayoral elections. Together, these findings suggest that it is supply-side factors rather than voter demand that explain the shortage of younger politicians in public office. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:20069&r=all |
| By: | Duque, Valentina; Schmitz, Lauren L. |
| Abstract: | We show that health and productivity around retirement age, and earnings over the life cycle, vary with exposure to economic conditions in early life. Using state-year-level variation from the most severe and prolonged economic downturn in American history—the Great Depression—combined with restricted micro-data from the Health and Retirement Study, we find that changes in macroeconomic indicators before age 6 are associated with changes in economic well-being, earnings, metabolic syndrome, and physical limitations decades later. We also document large declines in long-term mortality. Results are not driven by endogenous fertility responses throughout the 1930s. Our results help inform the design of retirement and healthcare systems and the long-term costs of business cycles. |
| Keywords: | Human Capital; Poverty; Unemployment; Aging |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:syd:wpaper:2020-11&r=all |
| By: | Gupta, Aashish; Sudharsanan, Nikkil |
| Abstract: | India has one of the most rigid systems of social stratification in the world, yet little is known about how this system has shaped life expectancy in the country. We provide the first direct estimates of caste and tribe differences in life expectancy in India using survey data spanning two decades. We find that individuals from the Scheduled Castes and Scheduled Tribes have drastically lower life expectancies than high-caste individuals (between 4.2-4.4 years for women and 6.1-7.0 years for men in 2013-2016.). These disparities have persisted over a 20-year period. Importantly, mortality disparities are present across the entire life-course and increasingly driven by older age mortality. Our findings reveal a pressing need for far greater examination of the health of marginalized populations in India. |
| Date: | 2020–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:hu8t9&r=all |
| By: | Martin Boyer (HEC Montréal - HEC Montréal); Philippe de Donder (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Claude Fluet (ULaval - Université Laval [Québec]); Marie-Louise Leroux (UQAM - Université du Québec à Montréal = University of Québec in Montréal); Pierre-Carl Michaud (HEC Montréal - HEC Montréal) |
| Abstract: | This paper conducts a stated-choice experiment where respondents are asked to rate various insurance products aimed to protect against nancial risks associated with long-term care needs. Using exogenous variation in prices from the survey design and individual cost estimates, these stated-choice probabilities are used to predict market equilibrium for long-term care insurance. Our results are twofold. First, information frictions are pervasive. Second, measuring the welfare losses associated with frictions in a framework that also allows for selection, it is found that information frictions reduce equilibrium take-up and lead to large welfare losses while selection plays little role. |
| Keywords: | Long-term care insurance,adverse selection,stated-preference,health,insurance |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02929780&r=all |
| By: | David G. Blanchflower (University of Stirling, GLO, Bloomberg and NBER); Alex Bryson (University College London, NIESR and IZA) |
| Abstract: | Using data from 68 countries on over 8 million respondents over forty years we show union membership peaks in midlife – usually around workers’ late 40s or early 50s. In doing so we extend Blanchflower’s (2007) earlier study, incorporating a further 39 countries and another decade or so of data. We also found it in every US state and the District of Columbia as well as across industries. The fact that this relationship exists in virtually every country across the world challenges a key precept in industrial relations, namely that institutions matter: they appear to matter little, at least in the case of the hump-shaped relationship between unionization and age. The union membership rates at the age peak in the United States and the United Kingdom have lowered over time, while the age at which the peak has occurred has increased in both countries. In part this is due to increasing union membership rates among those over the age of sixty-five. Declines in membership by birth cohort have lowered union density rates as the older cohorts with historically higher membership rates leave labour markets. Although we have yet to fully understand why union membership peaks in midlife we are able to examine some of the possible explanations. The findings have important implications for our understanding of trade unionism across the world. |
| Keywords: | union membership; age; union density; cohort |
| JEL: | J14 J50 J51 |
| Date: | 2020–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:2006&r=all |
| By: | Brian Nolan (INET and University of Oxford); Juan Palomino (INET and University of Oxford); Philippe Van Kerm (University of Luxembourg and LISER); Salvatore Morelli (CSEF, University of Naples and Institute for Economic Modelling at the INET Oxford) |
| Abstract: | This paper uses household wealth surveys to compare patterns of intergenerational wealth transfers across six rich countries and assess the relationships between transfers, current levels of net wealth, and wealth inequality. The paper examines four Euro Area countries, France, Germany, Italy, and Spain and extends the systematic comparison to the US and the UK. It finds that many of those currently at the top of the wealth distribution did not benefit from intergenerational transfers, but those who did received particularly large amounts while those toward the bottom of the wealth distribution received very little. A substantial gap in net wealth is seen between those who received or did not receive some wealth transfer. Controlling for age, gender, education and household size reduces the size of that gap but it remains substantial, especially in the US. We further look at how a marginal increase in the proportion of recipients of transfers of differing sizes would contribute to the shape of the overall wealth distribution using influence function regressions. Crucially, we show that the impact depends not only on the locations in the wealth distributions of recipients versus non-recipients, but also on the size of the receipt, an aspect which has been overlooked to date. In most countries, increasing the proportion of recipients of large transfers generally increases overall wealth inequality. In contrast, having more recipients of small or medium-sized transfers would be expected to reduce wealth inequality modestly, as they are more concentrated around the middle of the wealth distribution than non-recipients. |
| Keywords: | Wealth, inheritance, inequality, intergenerational transmission |
| JEL: | D31 |
| Date: | 2020–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:578&r=all |