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on Economics of Ageing |
| By: | Colin Davis; Ken-ichi Hashimoto; Ken Tabata |
| Abstract: | This paper considers how increasing longevity and declining birth rates affect market entry and endogenous productivity growth in a two-country model of trade. In each country, the demographic transition to an older population induces a contraction in the labor force through a decline in the working-age population. Firm-level investment in process innovation generates productivity growth, and with imperfect knowledge diffusion the country with the larger labor force has a greater share of firms with higher productivity levels. In this framework, population aging reduces a country’s labor supply, share of industry, and relative productivity. If the country with the smaller labor force experiences population aging, knowledge spillovers improve and the rate of productivity growth rises, as the level of market entry falls. Alternatively, population aging in the country with the larger labor force weakens knowledge spillovers and lowers the rate of productivity growth, but has an ambiguous affect on market entry. We show that the effects of population aging may be reversed by extending retirement age, and consider the welfare implications for demographic transition and retirement age extension arising in our framework through a quantitative analysis based on population data for the United States and Western Europe. |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1113&r=all |
| By: | Mitchell, Olivia S. |
| Abstract: | In the wake of the global pandemic known as COVID-19, retirees, along with those hoping to retire someday, have been shocked into a new awareness of the need for better risk management tools to handle longevity and aging. This paper offers an assessment of the status quo prior to the spread of the coronavirus, evaluates how retirement systems are faring in the wake of the shock. Next we examine insurance and financial market products that may render retirement systems more resilient for the world's aging population. Finally, potential roles for policymakers are evaluated. |
| JEL: | G23 G51 G53 H55 J26 J32 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:644&r=all |
| By: | David G. Blanchflower; Carol Graham |
| Abstract: | The past decade has brought increasing concern, in countries all over the world, of declines in mental health and well-being. Across countries, chronic depression and suicide rates peak in midlife. In the U.S., deaths of despair are most likely to occur in these years, and the patterns are robustly associated with unhappiness and stress. There is also a less-known relationship between well-being and longevity among the elderly, particularly for those over age 70. In this paper, we analyze several different data sets for the U.S. and provide extensive evidence on the middle age patterns, how they differ across the married and unmarried, and review new work on the elderly. The relationship between well-being and aging has a robust association with trends that can ruin lives and shorten life spans. It applies to much of the world’s population and links to behaviors and outcomes that merit the attention of scholars and policymakers alike. |
| JEL: | I31 J01 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28143&r=all |
| By: | Yashiro, Naomitsu; Kyyrä, Tomi; Hwang, Hyunjeong; Tuomala, Juha |
| Abstract: | There are two major barriers to increasing employment of older workers. First, older workers engaged in codifiable, routine tasks are particularly prone to the risk of being displaced by computers and robots. Second, several countries have in place various labour market institutions that encourage early retirement, such as exceptional entitlements or looser criteria for unemployment and disability benefits applied to older individuals. We present evidence that these two factors reinforce each other to push older workers out of employment. We find that older workers who are more exposed to digital technologies are more likely to leave employment, and that this effect is significantly magnified when they are eligible to an extension of unemployment benefits until the earliest age for drawing old age pension. Furthermore, our findings imply that a policy reform that tightens the eligibility for the benefit extension would increase mostly the employment of older workers that are more exposed to digital technologies. |
| Keywords: | technological change, disability benefits, unemployment benefits, early retirement, Social security, taxation and inequality, Labour markets and education, H55, J26, J65, O33, |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:136&r=all |
| By: | Marco Cozzi; Qiushan Li (Department of Economics, University of Victoria) |
| Abstract: | This note studies the determinants of life satisfaction for the elderly and near-elderly in the U.S., using data from the Health and Retirement Study. The econometric analysis exploits the 2008-09 financial crisis as a source of exogenous variation in wealth, caused by a long-lasting decrease in asset prices. Although absolute changes in wealth are not found to systematically affect individuals' well-being, losing 60% or more of the pre-crisis wealth negatively impacted measures of life satisfaction. |
| Keywords: | Wealth, Uninsurable shocks, Life Satisfaction, Subjective Well-Being |
| Date: | 2020–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:vic:vicddp:2002&r=all |
| By: | Francesco Lancia; Alessia Russo; Tim Worrall |
| Abstract: | Optimal intergenerational insurance is examined in a stochastic overlapping generations endowment economy with limited enforcement of risk-sharing transfers. Transfers are chosen by a benevolent planner who maximizes the expected discounted utility of all generations while respecting the participation constraint of each generation. We show that the optimal sustainable intergenerational insurance is history dependent. The risk from a shock is unevenly spread into the future, generating heteroscedasticity and autocorrelation of consumption even in the long run. The optimum can be interpreted as a social security scheme characterized by a minimum welfare entitlement for the old and state-contingent entitlement thresholds. |
| Keywords: | Intergenerational insurance, Limited commitment, Risk sharing, Stochastic overlapping generations |
| JEL: | D64 E21 H55 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:edn:esedps:300&r=all |