nep-age New Economics Papers
on Economics of Ageing
Issue of 2020‒10‒26
seven papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Pension Reforms, Population Aging, and Retirement Decision of the Elderly in a Neoclassical Growth Model By Hirono, Makoto; Mino, Kazuo
  2. Health of Elderly Parents, their Children's Labor Supply, and the Role of Migrant Care Workers By Wolfgang Frimmel; Martin Halla; Joerg Paetzold; Julia Schmieder
  3. Pareto-improving transition to fully funded pensions under myopia By Andersen, Torben M.; Bhattacharya, Joydeep; Gestsson, Marias H.
  4. The "Great Lockdown": Inactive Workers and Mortality by Covid-19 By Nicola Borri; Francesco Drago; Chiara Santantonio; Francesco Sobbrio
  5. The Effects of the Affordable Care Act on the Near-Elderly: Evidence for Health Insurance Coverage and Labor Market Outcomes By Mark Duggan; Gopi Shah Goda; Gina Li
  6. The income gradient in mortality during the Covid-19 crisis: evidence from Belgium By André Decoster; Thomas Minten; Johannes Spinnewijn
  7. Social Distancing and the Economic Impact of COVID-19 in the United States By Constantin Bürgi; Nisan Gorgulu

  1. By: Hirono, Makoto; Mino, Kazuo
    Abstract: This study explores the linkage between the labor force participation of the elderly and the long-run performance of the economy in the context of a two-period-lived over- lapping generations model. We assume that the old agents are heterogeneous in their labor efficiency and they continue working if their income exceeds the pension that can be received in the case of full retirement. We first inspect the key factors that the retirement decision of the elderly. We then examine analytically as well as numeri-cally the long-run impact of labor participation of the elderly on capital accumulation.
    Keywords: retirement decision, labor force participation, population aging, pension system, capital accumulation
    JEL: E62
    Date: 2020–07–10
  2. By: Wolfgang Frimmel; Martin Halla; Joerg Paetzold (Universität Salzburg); Julia Schmieder
    Abstract: We estimate the impact of parental health on adult children’s labor market outcomes. We focus on health shocks which increase care dependency abruptly. Our estimation strategy exploits the variation in the timing of shocks across treated families. Empirical results based on Austrian administrative data show a significant negative impact on labor market activities of children. This effect is more pronounced for daughters and for children who live close to their parents. Further analyses suggest informal caregiving as the most likely mechanism. The effect is muted after a liberalization of the formal care market, which sharply increased the supply of foreign care workers.
    Keywords: Informal care, formal care, aging, health, labor supply, labor migration.
    JEL: J14 J22 I11 I18 R23
    Date: 2020–10
  3. By: Andersen, Torben M.; Bhattacharya, Joydeep; Gestsson, Marias H.
    Abstract: Under dynamic efficiency, a pay-as-you-go (PAYG) pension scheme is often described as an “original sin†: It helps the current generation of retirees but hurts future generations because they are forced to save via a return-dominated scheme. Abandoning it is deemed welfare-improving but typically not for all generations. But what if agents are present-biased (hence, undersave for retirement) and the “paternalistically motivated forced savings†component of a PAYG scheme motivated its existence in the first place? This paper shows it is possible to transition from such a PAYG scheme on to a higher return, mandated fully-funded scheme; yet, no generation is hurt in the process. The results informthe debate on policy design of pension systems as more and more policy makers push for the transition to take place but are forced to recognize that current retirees may get hurt along the way.
    Date: 2018–11–01
  4. By: Nicola Borri; Francesco Drago; Chiara Santantonio; Francesco Sobbrio
    Abstract: In response to the Covid-19 outbreak, among other previous “non-pharmaceutical interven-tions”, on March 22, 2020 the Italian Government imposed an economic lockdown and ordered the closing of all non-essential economic activities. This paper estimates the causal effect of this measure on mortality by Covid-19 and on mobility patterns. The identification of the causal effect exploits the variation in the number of active workers across municipalities induced by the economic lockdown. The difference-in-difference empirical design compares outcomes in municipalities above and below the median variation in the share of active population before and after the lockdown within a province, also controlling for municipality-specific dynamics, daily-shocks at the provincial level and municipal unobserved characteristics. Our results show that the intensity of the economic lockdown is associated to a statistically significant reduction in mortality by Covid-19 and, in particular, for age groups between 40-64 and older. Back of the envelope calculations indicate that 4,793 deaths were avoided, in the 26 days between April 5 to April 30, in the 3,518 municipalities which experienced a more intense lockdown. Assuming linearity, a 1 percentage point reduction in the share of active population caused a 1.32 percentage points reduction in mortality by Covid-19. We also find that the economic lockdown, as expected, led to a reduction in human mobility. Several robustness checks corroborate our empirical findings.
    Keywords: Covid-19, economic lockdown, excess deaths, mobility
    JEL: H51 I10 I18 I30
    Date: 2020
  5. By: Mark Duggan; Gopi Shah Goda; Gina Li
    Abstract: The Affordable Care Act (ACA) not only changed the landscape of health insurance coverage in the United States, but also affected the relationship between working decisions and health insurance. In this paper, we estimate the impact of the ACA on the near-elderly (ages 60-64) in the five years after the implementation of its key provisions in early 2014. We exploit variation across geographic areas in the pre-existing level of uninsurance and use 65-69 year olds, whose insurance coverage was unaffected by the ACA, as a within-region control group. Our findings indicate that the ACA increased health insurance coverage among the near elderly by approximately 4.5 percentage points and reduced their labor force participation rate by approximately 0.6 percentage points.
    JEL: H2 H31 H51 H75 I13 J14 J21 J26
    Date: 2020–10
  6. By: André Decoster; Thomas Minten; Johannes Spinnewijn
    Abstract: We use population-wide data from linked administrative registers to study the distributional pattern of mortality before and during the Covid-19 pandemic in Belgium. Excess mortality is only found among those aged 65 and over. For this group, we find a significant negative income gradient in excess mortality, with excess deaths in the bottom income decile more than twice as high as in the top income decile for both men and women. However, given the high inequality in mortality in normal times, the income gradient in all-cause mortality is only marginally steeper during the peak of the health crisis when expressed in relative terms. Leveraging our individual-level data, we gauge the robustness of our results for other socioeconomic factors and find that conclusions about the income gradient in excess mortality based on aggregate data can be misguided.
    Date: 2020–09–25
  7. By: Constantin Bürgi; Nisan Gorgulu
    Abstract: This study documents how the demographics of new infections and mortality changed over time across US counties. We find that counties with a larger population share aged above 60 were hit harder initially in terms of both cases and mortality in March and April while counties with a larger population share aged below 20 were hit harder in June and July. At the same time, how counties that voted Democratic in 2016 are affected does not change over time. Subsequently, we simulate an alternative evolution of the pandemic, assuming that states extended the lockdown measures until daily new cases reach the levels of European countries after their lockdown measures were relaxed. In the baseline simulation, we find that cases and deaths would have increased by around 50% less by the end of June, but it would have led to a 2 percentage point larger drop in Q2 GDP.
    Keywords: spatial population distribution, pandemic, Covid-19, lockdown, stay-at-home order, economic impact, non-pharmaceutical interventions
    JEL: C53 H12 I18 R11
    Date: 2020

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