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on Economics of Ageing |
| By: | Stefan Etgeton; Björn Fischer; Han Ye |
| Abstract: | This paper examines how households adjust their savings and consumption expenditure in response to an anticipated increase in the early retirement age (ERA). We examine the 1999 pension reform in Germany, which increased the ERA for women born after 1951 by at least three years. Using the German Income and Consumption Survey, we find a negative impact on private savings of 0.6 percentage points, which is driven by married households. We show that households consisting of highly educated women and homeowners are more likely to reduce their savings rates. Furthermore, we find that the treated households increase their leisure spending while maintaining an unchanged level of disposable income. Our findings suggest that the treated households absorb the pension wealth shock without increasing their savings. |
| Keywords: | Pension Reform; Early Retirement Age; Savings; Pension Wealth; Consumption Expenditur |
| JEL: | D14 J14 J26 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_255&r=all |
| By: | Daniel Baksa; Zsuzsa Munkacsi; Carolin Nerlich |
| Abstract: | Several European countries are currently considering reversing parts of their pension reforms that were adopted previously to improve sustainability. In this paper we present a framework that allows us to quantify the macroeconomic and fiscal costs of such reversals. We thereby integrate the country-specific information from the latest Ageing Report into a dynamic general equilibrium model with overlapping generations. Focusing on Germany and Slovakia as country cases, our model replicates the Ageing Report’s pension expenditure projections very well. We calculate the macroeconomic impact of first the additional pension reforms needed to contain the public debt pressures arising from population ageing and second the costs of reform reversals. Our model results show that undoing past pension reforms would generate substantial adverse macroeconomic costs and could pose challenges for fiscal sustainability. |
| Keywords: | Aging;Pension reform;Pension spending;Retirement;Public debt;WP,benefit ratio,public debt-to-GDP ratio,old-age dependency ratio,contribution rate,labour force |
| Date: | 2020–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/132&r=all |
| By: | Benjamin Carton; Emilio Fernández Corugedo; Benjamin L Hunt; Simon Voigts |
| Abstract: | The Global Integrated Monetary and Fiscal model (GIMF) is a multi-region, forward-looking, DSGE model developed at the International Monetary Fund for policy analysis and international economic research. This paper documents the incorporation of demographic features into the model. The analysis presented illustrates how these new features enable the model to estimate some of the macroeconomic consequences of changing demographics. |
| Keywords: | Aging;Population growth;Population and demographics;Labor;Demographic change;WP |
| Date: | 2020–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/153&r=all |
| By: | Jong-Wha Lee; Do Won Kwak; Eunbi Song |
| Abstract: | This paper quantitatively examines the effects of aging on labor productivity using individual worker data in Korea. We find that attainment of information and communications technology (ICT) skills and participation in job-related training can help older workers stay productive. The estimation results present that ICT skills attainment has a positive effect on the wages of the older workers aged 50–64 with a high level of education or in a skill-intensive occupation. Job training also has a significant positive effect on the wages of older workers. Even compared to younger workers, older well-educated workers can be more productive through higher ICT skills attainment and job-training participation. The evidence suggests that a productivity decrease in line with the aging process can be mitigated by training aging workers to equip themselves with ICT skills. |
| Keywords: | aging, education, information and communications technology, productivity, skill, training |
| JEL: | J14 J24 J31 O47 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2021-04&r=all |
| By: | Margherita Borella; Mariacristina De Nardi; Fang Yang |
| Abstract: | In the United States, both taxes and old age Social Security benefits depend on one's marital status and tend to discourage the labor supply of the secondary earner. To what extent are these provisions holding back female labor supply? We estimate a rich life cycle model of labor supply and savings for couples and singles using the method of simulated moments (MSM) on the 1945 and 1955 birth-year cohorts and use it to evaluate what would happen without these provisions. Our model matches well the life cycle profiles of labor market participation, hours, and savings for married and single people and generates plausible elasticities of labor supply. Eliminating marriage-related provisions drastically increases the participation of married women over their entire life cycle, reduces the participation of married men after age 60, and increases the savings of couples in both cohorts, including the later one, which has similar participation to that of more recent generations. If the resulting government surplus were used to lower income taxation, there would be large welfare gains for the vast majority of the population. |
| JEL: | E21 H20 J22 J31 |
| Date: | 2020–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmoi:89238&r=all |
| By: | Böheim, René (University of Linz); Topf, Michael (Federal Ministry of Social Affairs, Health, Care and Consumer Protection, Austria) |
| Abstract: | We study the effect of lower unearned income on labor supply. To identify the causal effect of an unexpected reduction in unearned income, we exploit a policy reform that lowered survivor pensions in Austria. Men widowed after the survivor pension reform received an approximately 34% lower survivor pension than men widowed before the reform. We follow the employment history of both groups for 150 months and estimate the reform's effect on labor supply using a regression discontinuity design. The effect of the lower pension is evident immediately after the death of their spouse, is persistent over time, becomes more pronounced over time, and is robust across model specifications. Our baseline result suggests a 3.5 to 5.4 percentage point higher employment rate for survivors in the low pension regime in the long run. The estimated effect corresponds to a labor supply elasticity at the extensive margin with respect to the changes in total income of about -0.9 to -1.3. |
| Keywords: | labor supply, unearned income, regression discontinuity design |
| JEL: | I38 J22 J48 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13994&r=all |
| By: | Elízabeth Manjarrés Ramos (Universidad de Salamanca) |
| Abstract: | Despite the fact that seniors' community is one of the most averse group to migratory processes, migration to Spain of Venezuelan citizens and residents over 65 years old has increased since 2014. Keeping this in mind, the purpose of the following study is to understand and characterize the diaspora of Venezuelan seniors moving to Spain, identify the specific problems this community face, and connect this migratory flow with the origin and development of immigrant associations among seniors coming from Venezuela. |
| Abstract: | Aunque el colectivo de la tercera edad es uno de los menos propensos a los procesos migratorios, la migración a España de adultos mayores de 65 años provenientes de Venezuela se ha incrementado notoriamente a partir del año 2014. Teniendo ello en consideración, el objetivo de este estudio ha sido conocer y caracterizar la diáspora de adultos mayores de 65 años que migran de Venezuela a España, conocer los problemas económicos que en materia de pensiones y jubilaciones enfrenta este colectivo, y vincular este flujo migratorio con el proceso de génesis y desarrollo del asociacionismo entre adultos mayores. |
| Keywords: | Associations,Immigrants,Returnees,Seniors,Social Security Agreements,Asociaciones,Inmigrantes,Retornados,Adultos Mayores,Convenios de Seguridad Social. |
| Date: | 2020–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03042807&r=all |
| By: | Florentin Kerschbaumer; Wojciech Tomasz Sacha; Audrey Sokolo; Pirathees Sivarajah |
| Keywords: | Health, Nutrition and Population - Health Service Management and Delivery Social Protections and Labor - Disability Social Protections and Labor - Social Funds and Pensions Social Protections and Labor - Social Protections & Assistance |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:34041&r=all |
| By: | Munoz de Bustillo Llorente Rafael (Universidad de Salamanca); FERNANDEZ MACIAS Enrique (European Commission – JRC); GONZALEZ VAZQUEZ Ignacio (European Commission – JRC) |
| Abstract: | This report aims to conceptualise universality in social protection and propose an actionable approach to measure it in a systematic and comprehensive way in the European Union. We propose to define the universality of a given Welfare State along three dimensions: the range of social needs addressed the degree to which the relevant population is covered, and the extent to which the needs are adequately covered in each case. We argue that these three dimensions can be used to measure the universality of European social systems. We discuss how this measurement could be implemented and present an illustrative operationalisation through a system of indicators for health, unemployment benefits, sickness benefits, old-age pensions, social assistance, housing, and education. |
| Keywords: | Universality, Social, Protection, Coverage, Adequacy |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc122953&r=all |
| By: | Gietel-Basten, Stuart (The Hong Kong University of Science and Technology) |
| Abstract: | Population ageing is presented as one of the ‘grand challenges’ of the twenty-first century. Yet, policies designed to offset these challenges seem to be a jumbled, disjointed mix with no clear, overarching narrative. One of the successes of climate change science is the development of a clear, distinguishable framework to plan action: adaptation, mitigation, and resilience. This framework can be applied to designing better policy for ageing: adapting to support people in need today; mitigating future challenges by ensuring that people and institutions ‘age better’; and building resilience by developing both a longer-term perspective and policy learning framework. |
| Date: | 2020–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:6cp9f&r=all |
| By: | Francesca Barigozzi (University of Bologna); Helmuth Cremer (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); Kerstin Roeder (University of Augsburg [Augsburg]) |
| Abstract: | We study long-term care (LTC) choices by families with mixed- or same-gender siblings. LTC can be provided either informally by children, or formally at home or in an institution. A social norm implies that daughters suffer a psychological cost when they provide less informal care than the average woman. Daughters have a lower wage than sons so that their opportunity cost of providing LTC is smaller. Families maximize a weighted sum of children's and parent's utilities. Because of the norm cost and the gender wage gap daughters will be the sole provider of informal LTC in mixed-siblings families. Sons provide LTC only if they have no female sibling. We show that the laissez-faire (LF) and the utilitarian first best (FB) differ for two reasons. First, because informal care imposes a negative externality on daughters via the social norm. Second, because the weights children and parents have in the family bargaining problem differ in general from their weights in social welfare. While these two problems are intertwined it appears that, unless children have a much larger weight than parents, too much informal care will be provided, especially by daughters, and that formal care should be subsidized. Previous papers suggest that LTC policies should "tolerate", as a side effect, some crowding out of informal care and that the latter should be encouraged. Our results suggest instead that, because of the existing social norm about gender roles in the family, optimal policies should "discourage" informal care through subsidies on formal LTC. |
| Keywords: | Social norms,Formal and informal,LTCDaughters,Sons |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03054704&r=all |
| By: | Xuyang Li; Tongping Li; Hui Li; Junmei Qi (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine); Linjie Hu |
| Abstract: | With the development of e-commerce, online consumption-a new sustainable consumption mode-has rapidly developed. Online shopping has become an important consumption method for Chinese residents, and the era of online consumption has arrived. Urbanization is an important foundation for the development of online consumption, and its impact on online consumption is becoming increasingly important. In addition, with the decline of fertility in China, the proportion of the elderly population is increasing. As the macro background of the current economic operation of China, population aging has long been a concern of the government. However, the existing research on urbanization, population aging and online consumption is insufficient. In this context, this study is of great significance to promote the sustainable development of the online consumption mode and enrich the theory of resident consumption in the era of the network economy. In this paper, by adopting the system generalized method of moments (GMM), we conducted an empirical analysis of the relationship between urbanization, population aging, and online consumption, based on panel data from 31 provinces in China from 2007 to 2017. Furthermore, we examined the regional heterogeneity of urbanization's online consumption effect. The results reveal that, first, urbanization has a positive relationship with online consumption. Second, urbanization's online consumption effect has regional differences, with the largest positive effect being in the western area of China, the second in the eastern area of China and the smallest in the central area of China. Third, aging inhibits the development of online consumption. Specifically, it mainly includes two aspects. On the one hand, aging has a direct negative impact on online consumption. On the other hand, aging has a moderating effect on urbanization's online consumption effect, which weakens the impact of urbanization. The rising of urban residents' income has significant explanatory power to the change of online consumption in the eastern and western regions. Therefore, the policy implications are as follows: promoting the strategic transformation of urbanization, giving full play to the online consumption effect of urbanization; adjusting and improving population policy to cope with the population aging; constantly raising people's income level and enhancing consumption potential. |
| Keywords: | population aging,moderating effect,online consumption,urbanization |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03007148&r=all |
| By: | Margherita Borella; Mariacristina De Nardi |
| Abstract: | In old age, consumption can fluctuate because of shocks to available resources and because health shocks affect utility from consumption. We find that even temporary drops in income and health are associated with drops in consumption and most of the effect of temporary drops in health on consumption stems from the reduction in the marginal utility from consumption that they generate. More precisely, after a health shock, richer households adjust their consumption of luxury goods because their utility of consuming them changes. Poorer households, instead, adjust both their necessary and luxury consumption because of changing resources and utility from consumption. |
| JEL: | D10 D11 D12 D14 E20 E21 H20 H31 H51 |
| Date: | 2020–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmoi:89237&r=all |
| By: | Holmberg, Johan (Department of Economics, Umeå University) |
| Abstract: | In this paper, we present a life-cycle earnings dynamics model including endogenous employment and job change. The model is estimated with the method of indirect inference using Swedish register data. By simulating data from this microeconomic model, we study the macroeconomic consequences of transitory shocks to unemployment risk. The results show that transitory aggregate shocks to unemployment risk have long-lasting negative effects on employment, income, and increases earnings volatility. By studying how unemployment at different ages affects the accumulation and distribution of pension entitlements, we find that becoming unemployed at 40 has the largest effect on pension accumulations. Furthermore, unobserved individual heterogeneity contributes substantially to the observed life-cycle earnings inequality for both men and women in Sweden. |
| Keywords: | Earnings dynamics; unemployment; inequality; social insurance; pensions |
| JEL: | D63 E27 H55 J24 J64 |
| Date: | 2021–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0984&r=all |