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on Economics of Ageing |
| By: | Ni, Shawn (University of Missouri); Podgursky, Michael (Sinquefield Center for Applied Economic Research, Saint Louis University); Wang, Xiqan (Beijing University of Technology) |
| Abstract: | Many states enhanced benefits in teacher retirement plans during the 1990s. This paper examines the school staffing effects of one such enhancement in a major urban school district with mostly high poverty schools. Pension rule changes in 1999 for St. Louis public school teachers resulted in large increases in pension wealth for active teachers, as well as a powerful increase in “push” incentives for earlier retirement. Simple descriptive statistics on retirement patterns before and after the enhancements suggest much earlier retirement resulted. Shorter teaching spells imply a steady state with more teacher turnover and a larger share of novice teachers in classrooms. To better understand the long run effects of these changes and alternatives policies, the authors estimate a structural model of teacher retirement. Simulations of retirement behavior for representative senior teachers point to shorter completed teaching spells and earlier retirement age as a result of the enhancements. By contrast, moving from the post-1999 to a DC-type plan would extend the teaching career of a representative senior teacher by roughly two years. |
| Keywords: | Teacher pensions; teacher compensation; state and local pension finance |
| JEL: | H72 J26 J32 |
| Date: | 2021–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sluecr:2021_001&r= |
| By: | Andrew Gothro; Kelsey Chesnut; Mindy Hu; Ronette Briefel |
| Abstract: | The Elderly Simplified Application Project (ESAP) State Enrollment Data Collection Project measured the effects on food security among older adults who received Supplemental Nutrition Assistance Program (SNAP) benefits through an ESAP application. |
| Keywords: | SNAP, nutrition, older Americans, ESAP, elderly, pandemic |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:3acf7078380842ad9cc6638019f02c9c&r= |
| By: | Arthur Jacobs; Freddy Heylen (-) |
| Abstract: | We construct and calibrate an overlapping generations model incorporating demographic change and the possibility to automate the production process to test the hypothesis put forward by Acemoglu and Restrepo (2017). In line with their hypothesis, we find that ageing is a powerful force stimulating the adoption of automation technologies in OECD economies. Ageing-induced automation is found to soften the negative effects of labour scarcity and rising old-age dependency rates on per capita growth, but the compensation is incomplete. One important reason is that automated tasks are far from perfect substitutes for tasks executed by human labour. A second reason is that ageing-induced automation reduces the intensity of positive behavioural reactions to ageing in the form of retiring later and investing more in human capital. Moreover, the partial compensation comes at the price of rising wage and welfare inequality between individuals of different innate ability level and a fall in the net labour share of income. Compared to existing literature, we pay special attention to the theoretical and empirical foundations of the modelling of automation. Theoretically, our work is the first one testing this hypothesis that relates the approach to automation rigorously to the state-of the-art conception by Acemoglu and Restrepo (2018a; 2018b). Empirically, we tested and largely confirmed the validity of our approach and calibration by comparing model predictions of (changes in) automation density to actual data on robotization in a cross-country fashion. |
| Keywords: | Automation, Demographic change, Secular stagnation, Overlapping generations model, Robotics, Factor shares |
| JEL: | E22 E27 J11 J23 J24 J31 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:21/1030&r= |
| By: | Darren Aiello; Asaf Bernstein; Mahyar Kargar; Ryan Lewis; Michael Schwert |
| Abstract: | U.S. state pensions are underfunded by trillions of dollars, but their economic burden is unclear. In a model of inefficient taxation, real estate fully reflects the cost of pension shortfalls when it is the only form of immobile capital. We study the effect of pension shortfalls on real estate values at state borders, where labor and physical capital could more easily relocate to a state with a smaller shortfall. Using plausibly exogenous variation driven by pension asset returns, we find that one dollar of pension underfunding reduces house prices near state borders by approximately two dollars. Our estimates imply a deadweight loss associated with addressing pension shortfalls that is consistent with prior research in settings with high returns to public spending and costs of taxation. |
| JEL: | H41 H55 H74 R30 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29405&r= |
| By: | Nada Wasi; Chinnawat Devahastin Na Ayudhya; Pucktada Treeratpituk; Chommanart Nittayo |
| Abstract: | While understanding labor market dynamics is crucial for designing the country’s social protection programs, prohibitive longitudinal surveys are rarely available in less developed countries. We illustrate that employment history from Social Security records can provide several important insights by using data from a middle-income country, Thailand. First, in contrary to the traditional view, we find that the formal and informal sectors are quite connected. Our analysis of millions of individual histories by a machine learning technique shows that more than half of registered workers left the formal sector either seasonally or permanently long before their retirement age. This finding raises a question of whether the social protection schemes being separately designed for formal and informal workers are effective. Second, the semi-formal workers also had a much flatter wage-age profile compared to those always staying in the formal sector. This observation calls for effective redistributive tools to prevent earnings inequality to translate into disparities in old-age and transmit to the next generation. Lastly, on the employer size, we find that almost half of formally registered firms had fewer than five employees, the benchmark often used to define informal firms. This result suggests that the distributions of firm sizes differ across countries and the employer size alone is unlikely sufficient to define informal workers. |
| Keywords: | Employment; Work History; Social Security; K-means Clustering; Thailand |
| JEL: | J01 J08 J21 J60 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:pui:dpaper:147&r= |
| By: | Cherbonnier, Frédéric |
| Abstract: | We examine the provision of insurance against non-observable liquidity shocks for time-inconsistent agents who can privately store resources. When lack of self-control is strong enough, optimal contracts are similar to individual nancial accounts with remunerated savings and costly borrowing. The corresponding rate of return decreases with savings, which gives a theoretical rationale for pension accounts with decreasing incentive schemes, as implemented in most developed countries. Extending the model to an innite horizon, we show that, in the presence of repeated shocks, optimal contracts lead to impoverishment almost surely. Usury laws, capping interest rates, worsen this tendency to over-indebtedness for consumers with low risk aversion. By contrast, hidden storage constrains resource allocation for time-consistent agents, so that optimal contracts induce them to accumulate wealth. Those results show how lack of self-control changes the nature of optimal savings and borrowing instruments, with normative implications in terms of tax policy and credit regulation. |
| Keywords: | Time-inconsistency; self-control; mechanism design; insurance, over-indebtedness; retirement savings; consumer credit; credit regulation; saving incentives |
| JEL: | C61 C63 D73 D82 E21 H21 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:126131&r= |
| By: | Vincenzo Mariani (Bank of Italy) |
| Abstract: | This work proposes a reconstruction of survey data that makes it possible to analyse the mechanical effect of ageing on the consumption of Italian households. Ageing has limited the increase in the propensity to spend recorded in the period between 2005 and 2017, and it has had a negative - but small - impact on the dynamics of average, per capita and equivalized household expenditure. The decline in household expenditure in the period considered is almost entirely attributable to the reduction of consumption within the age groups, determined by the negative income dynamics. |
| Keywords: | consumption, saving rate, ageing |
| JEL: | E21 J11 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_638_21&r= |
| By: | Magdalena Muszynska-Spielauer; Marc Luy |
| Abstract: | The objective of this study is to analyze the pattern and risk factors of all-cause and external- cause mortality among adults in India. Using a nationally-representative, population-based survey, known as the National Family Health Survey, 2015-2016, we calculate age-specific death rates among adults aged 15-64 for all causes and external causes in the three years before the survey. We estimate external cause-deleted life expectancy by sex and apply logistic regression to investigate the socioeconomic determinants of all-cause and external- cause mortality in India. The male disadvantage in external-cause mortality is higher than in all-cause mortality. For all-cause mortality, caste and household wealth quintile (WQ) are significant predictors for both sexes. For external-cause mortality, Hindu adults experience a higher risk than adults from other religious groups. Moreover, the risk of death from external causes is negatively associated with household WQ. Our study demonstrates that people belonging to lower socioeconomic strata disproportionately carry the burden of death from external causes. |
| Keywords: | Health expectancy, health adjusted life expectancy, well-being, health, EU-SILC, well-being adjusted life expectancy, WAHE |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:vid:wpaper:2101&r= |
| By: | Barschkett, Mara; Spieß, C. Katharina; Ziege, Elena |
| JEL: | D1 I21 I31 J13 J14 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc21:242397&r= |
| By: | Ana Lucia Abeliansky; Klaus Prettner |
| Abstract: | We analyse the effects of declining population growth on automation. Theoretical considerations imply that countries with lower population growth introduce automation technologies faster than those with higher population growth. We test the theoretical implication on panel data for 60 countries over the time span 1993-2013. Regression estimates support the theoretical implication, suggesting that a one percent increase in population growth is associated with an approximately two percent reduction in the growth rate of robot density. Our results are robust to the inclusion of standard control variables, different estimation methods, dynamic specifications, and changes with respect measuring robot stocks. |
| Keywords: | Automation, Industrial Robots, Demographic Change, Declining Fertility |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:vid:wpaper:2102&r= |