nep-age New Economics Papers
on Economics of Ageing
Issue of 2021‒09‒06
nine papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Completing Dutch Pension Reform By Westerhout, Ed; Ponds, Eduard; Zwaneveld, P.J.
  2. SOEP-RV: Linking German Socio-Economic Panel Data to Pension Records By Carsten Schröder
  3. The well-being age U-shape effect in Germany is not flat By Blanchflower, David G.; Piper, Alan
  4. Installing Elevators in Old Apartment Buildings: Is it Worth the Costs and If So: For Whom? By Anne Emblem; Theis Theisen
  5. Intergenerational redistributive effects of monetary policy By Marcin Bielecki; Michał Brzoza-Brzezina; Marcin Kolasa
  6. Is happiness u-shaped in age everywhere? A methodological reconsideration for Europe By David Bartram
  7. New Residential Ownership Models - Can the Dream of the 'Own Home’ Come True Profitably? By Annette Kaempf-Dern
  8. Reform of the Brazilian RGPS Pensions System By Filipe de Oliveira Bello; Onofre Alves Simões
  9. The Mid-Life Dip in Well-Being: A Critique By Blanchflower, David G.; Graham, Carol L.

  1. By: Westerhout, Ed (Tilburg University, School of Economics and Management); Ponds, Eduard (Tilburg University, School of Economics and Management); Zwaneveld, P.J.
    Date: 2021
  2. By: Carsten Schröder
    Abstract: The aim of the project SOEP-RV is to link data from participants in the German Socio-Economic Panel (SOEP) survey to their individual Deutsche Rentenversicherung (German Pension Insurance) records. For all SOEP respondents who give explicit consent to record linkage, SOEP-RV creates a linked dataset that combines the comprehensive multi-topic SOEP data with detailed cross-sectional and longitudinal data on social security pension records covering the individual’s entire insurance history. This article provides an overview of the record linkage project, highlights potentials for analysis of the linked data, compares key SOEP and pension insurance variables, and suggests a re-weighting procedure that corrects for selectivity. It concludes with details on the process of obtaining the data for scientific use.
    Keywords: record linkage, SOEP, SOEP-RV, pension records, consent
    JEL: C89 C18
    Date: 2021
  3. By: Blanchflower, David G.; Piper, Alan
    Abstract: Kassenboehmer and DeNew (2012) claim that there is no well-being age U-shape effect for Germany, when controlling for fixed effects and respondent experience and interviewer characteristics in the German Socio-Economic Panel, 1994-2006. We re-estimate with a longer run of years and restrict the age of respondents to those under seventy and find the well-being age U-shape effect is neither flat nor trivial.
    Keywords: age,ageing,life satisfaction,interviewer characteristics,interviewee experience,fixed effects,panel analysis,GSOEP
    JEL: I31 J14 C42
    Date: 2021
  4. By: Anne Emblem; Theis Theisen
    Abstract: The Norwegian state housing bank offers economic subsidies to stimulate instalment of elevators in existing apartment buildings in which stairway is the only passageway. The subsidy constitutes about 50 percent of the total costs of installing elevators, provided that certain conditions are met. The political motivation for this subsidy is to reduce the likelihood that residents in such apartment buildings will have to relocate if their mobility is reduced, e.g., due to old age. In this paper we study the economics of investing in elevators, both from the societal point of view and from the residents’ point of view. Elevators might enable residents to continue to live in their apartment even if their health deteriorates. Hence, installation of elevators will have both monetary and non-monetary consequences. In this study, focus is placed mainly on the monetary implications of such an investment. An elevator may reduce the likelihood that residents suffer injuries associated with falls when climbing the stairs and subsequently also affect costs associated with health and social services. Moreover, installation of an elevator may enable residents to live in their apartment for a longer period, and subsequently alter the costs of public services, among which are housing, institutions and health and social services. About 70.000 Norwegians at the age of 80 years and older live in an apartment placed on the first floor or higher of a building without elevator. It is a political ambition to enable people to age in place, and for the health and social services to be provided in the recipients’ home. In this study, we estimate the potential societal economic savings from reduced need for public living arrangements and institutions, reduced traveling and time costs associated with provision of services to elderly residents, as well as expenditures associated with falls in stairs. Also, we estimate the resident’s potential private economic benefits from investing in elevators (as measured by changes in the market price of dwellings). Our findings will shed light on whether installation of elevators in older apartment buildings is economically beneficial to the society and consequently: whether the subsidy of a yearly 4,9 million EUR is economically justifiable from the societal point of view.
    Keywords: Economic implication; Government Policy; Investment in elevators; Societal point of view
    JEL: R3
    Date: 2021–01–01
  5. By: Marcin Bielecki; Michał Brzoza-Brzezina; Marcin Kolasa
    Abstract: This paper investigates the distributional consequences of monetary policy across generations. We use a life-cycle model with a rich asset structure as well as nominal and real rigidities calibrated to the euro area using both macroeconomic aggregates and microeconomic evidence from the Household Finance and Consumption Survey. We show that the life-cycle profi les of income and asset accumulation decisions are important determinants of redistributive effects of monetary shocks and ignoring them can lead to highly misleading conclusions. The redistribution is mainly driven by nominal assets and labor income, less by real and housing assets. Overall, we find that a typical monetary policy easing redistributes welfare from older to younger generations.
    Keywords: monetary policy, life-cycle models, wealth redistribution
    JEL: E31 E52 J11
    Date: 2021–03
  6. By: David Bartram
    Abstract: A recent contribution to research on age and well-being (Blanchflower 2021) found that the impact of age on happiness is "u-shaped" virtually everywhere: happiness declines towards middle age and subsequently rises, in almost all countries. This paper evaluates that finding for European countries, considering whether it is robust to alternative methodological approaches. The analysis here excludes control variables that are affected by age (noting that those variable are not themselves antecedents of age) and uses data from the entire adult age range (rather than using data only from respondents younger than 70). I also explore the relationship via models that do not impose a quadratic functional form. The paper shows that these alternate approaches do not lead us to perceive a u-shape "everywhere": u-shapes are evident for some countries, but for others the pattern is quite different.
    Date: 2021–08
  7. By: Annette Kaempf-Dern
    Abstract: In Germany only 45,5% of all residential units were inhabited by their owners in 2014 while more than 80% of households would prefer to live in their own home. One of the stated reasons for the latter is that property is perceived as a good investment opportunity, especially with regard to pensions and old-age provision. While it can strongly be doubted – especially in today’s market conditions in Germany – that residential investments of non-professional individuals will ever reach the risk-adjusted profitability of diversified investment funds, the decision to invest in real estate has strong positive effects on the discipline regarding payments for private pension provision. Another reason speaking for home ownership is the perceived freedom, while the lack of flexibility in relation to changing life circumstances, including mobility requirements for work, speak against it. Last, but not least, the majority of Germans has only below-average net assets and thus simply lacks the equity for a solid real estate acquisition. The question arises whether there are alternative models that keep the advantages of residential ownership for non-professional individuals while minimizing the disadvantages of the ‘traditional’ model? To answer this question, the ‘traditional’ model of residential acquisition and operation over the life cycle is depicted, as are upcoming alternatives, including a new ownership concept that creatively combines established legal, financial and operational constructs with new considerations. Based on empirical research and financial models for typical family constellations, the advantages and disadvantages of traditional and new residential ownership models are compared and discussed. The predominantly conceptual paper indicates that the traditional model of residential ownership for non-professional individuals is not well suited for the current and expectable conditions, including individual flexibility and mobility requirements of people living in multi-storey housing in cities. New models are needed that require some major changes, maybe even legal adaptations, but offer very promising results, not only for the affected individuals but also for the society.
    Keywords: home ownership in Germany; housing profitability; private pensions; tenement syndicate
    JEL: R3
    Date: 2021–01–01
  8. By: Filipe de Oliveira Bello; Onofre Alves Simões
    Abstract: We assess the investor base impact on government borrowing costs and examine how investors react to shocks in sovereign bond yields, across 24 countries and 3 maturities between 2004Q1-2019Q2. Our VAR approach has the advantage of modelling bidirectional causality between yields and investor base. We find that higher foreign holdings are associated with lower yields but link these effects exclusively to foreign banks and mainly to 10-years maturity. Yields in GIIPS and EA core countries react in opposite directions to foreign holdings shocks. Foreign investment is procyclical, namely at the long end and where fundamentals are weaker. Thus, an EA sovereign debt crisis re-run cannot be dismissed requiring readiness to use supporting mechanisms to prevent contagion and an escalation that may jeopardize the monetary union itself. Yields’ response to domestic investment shocks is heterogeneous and seems to bear no significant relation with home bias. No cyclical trading pattern can be clearly associated to each type of domestic investor.
    Keywords: Brazil; Pensions Reform; Defined Benefit; Defined Contribution; Notional Defined Contribution.
    Date: 2021–08
  9. By: Blanchflower, David G.; Graham, Carol L.
    Abstract: A number of studies - including our own - find a mid-life dip in well-being. Yet several papers in the psychology literature claim that the evidence of a U-shape is "overblown" and if there is such a thing that any such decline is "trivial". Others have claimed that the evidence of a U-shape "is not as robust and generalizable as is often assumed," or simply "wrong." We identify 424 studies, mostly published in peer reviewed journals that find U-shapes that these researchers apparently were unaware of. We use data for Europe from the Eurobarometer Surveys (EB), 1980-2019; the Gallup World Poll (GWP), 2005-2019 and the UK's Annual Population Survey, 2016-2019 and the Census Bureau's Household Pulse Survey of August 2021, to examine U-shapes in age in well-being. We find remarkably strong and consistent evidence across countries of statistically significant and non-trivial U-shapes in age with and without socio-economic controls. We show that studies cited by psychologists claiming there are no U-shapes are in error; we reexamine their data and find differently. The effects of the mid-life dip we find are comparable to major life events such as losing a spouse or becoming unemployed. This decline is comparable to half of the unprecedented fall in well-being observed in the UK in 2020 and 2021, during the Covid19 pandemic and lockdown, which is hardly "inconsequential" as claimed.
    Date: 2021

This nep-age issue is ©2021 by Claudia Villosio. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.