nep-age New Economics Papers
on Economics of Ageing
Issue of 2021‒11‒15
ten papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Health and Aging before and after Retirement By Ana Lucia Abeliansky; Holger Strulik
  2. Do Required Minimum Distribution 401(k) Rules Matter, and for Whom? Insights from a Lifecylce Model By Horneff, Vanya; Maurer, Raimond; Mitchell, Olivia S.
  3. Pension d’un salarié du secteur privé et transitions vers un système universel de retraite par points : Etude d’impact pour une carrière complète sous plafond By Frédéric Gannon; Gilles Le Garrec; Gautier Lenfant; Vincent Touze
  4. Population Aging and Small Business Exits By XU Peng
  5. Save, Spend or Give? A Model of Housing, Family Insurance, and Savings in Old Age By Fahle, Sean; Barczyk, Daniel; Kredler, Matthias
  6. Cash Transfers and Children’s Educational Outcomes in Rural China: Evidence from the New Rural Pension Scheme By Zheng, Xiaodong; Shangguan, Shuangyue; Shen, Zheng; Fang, Xiangming
  7. Medical Innovations and Ageing: A Health Economics Perspective By Volker Grossmann
  8. Heurs et malheurs du système universel de retraite By André Masson; Vincent Touze
  9. China's Changing Population Structure and its Implications for US Agricultural Exports By Xi He; Wendong Zhang
  10. Labour Market Adjustments to Population Decline By Hellwagner, Timon; Weber, Enzo

  1. By: Ana Lucia Abeliansky; Holger Strulik
    Abstract: We investigate health and aging before and after retirement for specific occupational groups. We use five waves of the Survey of Health, Aging, and Retirement in Europe (SHARE) and construct a frailty index for elderly men and women from 10 European countries. Occupational groups are classified according to low vs. high education, blue vs. white collar color, and high vs. low physical or psychosocial job burden. Controlling for individual fixed effects, we find that, regardless of the used classification, workers from the first (low status) group display more health deficits at any age and accumulate health deficits faster than workers from the second (high status) group. We instrument retirement by statutory retirement ages (“normal” and “early”) and find that the health of workers in low status occupations benefits greatly from retirement, whereas retirement effects for workers in high status occupations are small and frequently insignificant. We also find that workers from low status occupations always have higher health deficits, i.e. we find evidence for an occupational health gradient that widens with increasing age, before and after retirement.
    Keywords: health deficits, occupation, retirement, frailty index, Europe
    JEL: I10 I19 J13
    Date: 2021
  2. By: Horneff, Vanya; Maurer, Raimond; Mitchell, Olivia S.
    Abstract: Tax-qualified vehicles helped U.S. private-sector workers accumulate {dollar}25Tr in retirement assets. An often-overlooked important institutional feature shaping decumulations from these retirement plans is the "Required Minimum Distribution" (RMD) regulation, requiring retirees to withdraw a minimum fraction from their retirement accounts or pay excise taxes on withdrawal shortfalls. Our calibrated lifecycle model measures the impact of RMD rules on financial behavior of heterogeneous households during their worklives and retirement. We show that proposed reforms to delay or eliminate the RMD rules should have little effects on consumption profiles but more impact on withdrawals and tax payments for households with bequest motives.
    Keywords: life cycle saving,household finance,401(k) plan,retirement,tax policy
    JEL: D14 G11 G50 G51 H24
    Date: 2021
  3. By: Frédéric Gannon (CERENE - Centre d'Etude et de Recherche en économiE et gestioN LogistiquE - ULH - Université Le Havre Normandie - NU - Normandie Université, OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po, EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Gilles Le Garrec (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po); Gautier Lenfant; Vincent Touze (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po)
    Abstract: The adoption of a universal point system modifies the link between labor income and pension benefits. In this paper, we propose to measure the possible impact of such a change when considering different wage trajectories. We identify seven stylized case studies to characterize the main properties of the current system for employees in the private sector with full careers under the social security ceiling. To address the transition issue, we setup two methods for valuing acquired pension rights in the old system. The first is the immediate conversion of the pension rights into points. The second consists in making the rules of calculation coexist and paying pension benefits acquired before the reform in proportion to the contribution period length in the old system. We contemplate a benchmarch scenario of constant long-run generosity for a given career. The impact is shown not to depend on the income level but on the salary profiles: a redistribution is carried out in favor of weakly growing profiles at the expense of the steeper ones. For careers with poor contribution years, significant declines are to be expected. However, for low-wage careers, an increase in the minimum pension is likely to limit the impact of these decreases or even to lead to a higher perceived effective pension. The way in which acquired pension rights are valued is not neutral. The conversion is rather advantageous for the least dynamic careers while the nesting of the rules is more generous for the most dynamic careers.
    Abstract: L'adoption d'un système universel de retraite par points modifie le lien entre les revenus du travail et la pension de retraite. Dans cet article, nous proposons de mesurer l'impact possible d'un tel changement dans différents contextes de trajectoire salariale. Nous identifions sept cas-types suffisamment stylisés pour caractériser les principales propriétés du système actuel pour des salariés du secteur privé ayant eu des carrières complètes sous le plafond de sécurité sociale. Pour aborder la transition, nous étudions deux méthodes de valorisation des droits acquis dans l'ancien système. La première est la conversion immédiate des droits en points. La seconde consiste à faire cohabiter les règles de calcul (imbrication) et à attribuer une pension acquise avant réforme au prorata de la durée de cotisation dans l'ancien système. Nous identifions un scénario central de générosité constante à long terme pour une carrière donnée. Nous montrons qu'un impact différencié (et donc une redistribution) s'observe, indépendamment du niveau de revenu, au profit de la carrière peu dynamique et au détriment de la carrière plus dynamique. Pour des carrières comportant de mauvaises années cotisées, des baisses sensibles sont à craindre. Toutefois, pour les carrières avec de faibles salaires, une hausse de la pension minimum est en mesure de limiter l'impact de ces baisses voire au contraire conduire à une pension effectivement perçue plus élevée. La méthode de valorisation des droits acquis n'est pas neutre. La conversion est plutôt avantageuse pour des carrières peu dynamiques tandis que l'imbrication des règles est plus généreuse pour les carrières les plus dynamiques.
    Keywords: Pension reform,Income distribution,Welfare program
    Date: 2020–04–01
  4. By: XU Peng
    Abstract: Japan has been experiencing substantial growth in the proportion of their elderly population due to historically low fertility. Aging has strong adverse impacts on economic growth, productivity, entrepreneurship, and technology adoption. In this study, we investigate the effect of population aging as well as the effect of macro factors on corporate exits of small businesses. Economically inefficient small firms are more likely to exit the market via business closures or bankruptcies, larger insolvent firms attempt to survive by filing for rehabilitation, and larger underperforming firms seek acquisitions as a flight from loss strategy to avoid a worst-case scenario such as bankruptcy or rehabilitation. All other things being equal, population aging increases acquisitions but decreases forced exits such as rehabilitation and bankruptcies. Though it is well-documented that recent voluntary exits are driven by CEO aging in small business, population aging has no significant effect on business closures of firms operated by aged CEOs. Yen appreciations trigger rehabilitation and this effect is robust. A decline in long-term interest rates especially increases bankruptcies of non-aged CEOs. As for exit routes, population aging significantly decreases the probability of force exits relative to business closures or acquisitions.
    Date: 2021–11
  5. By: Fahle, Sean; Barczyk, Daniel; Kredler, Matthias
    JEL: D1
    Date: 2021
  6. By: Zheng, Xiaodong; Shangguan, Shuangyue; Shen, Zheng; Fang, Xiangming
    Keywords: Political Economy, Food Security and Poverty
    Date: 2021–08
  7. By: Volker Grossmann
    Abstract: This paper discusses the relationship between medical innovations and ageing from a health economics perspective and surveys empirical evidence on medical R&D incentives, R&D costs of pharmaceuticals, and the cost-effectiveness of health innovations. Particular focus is on the endogeneity of medical technological progress to expected market size and on the conceptualization of ageing as an accumulation of health deficits. The paper also discusses the role of medical progress for longevity and health inequality and presents a framework to assess the effect of increased longevity on the value of life.
    Keywords: healthcare, health deficits, health innovations, medical technological progress, longevity
    JEL: I10 O30
    Date: 2021
  8. By: André Masson; Vincent Touze (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po)
    Abstract: Le 5 mars 2020, l'Assemblée nationale a adopté les projets de loi ordinaire et organique, déposés par le gouvernement Philippe, instaurant un système universel de retraite (SUR). Le calendrier législatif prévoyait que ces projets de loi soient ensuite débattus au Sénat en avril 2020. Le nouveau système prévu est universel, ce qui signifie qu'il a pour vocation de remplacer les 42 régimes actuels de retraite. Le principe de la répartition est préservé : les cotisations prélevées sur les revenus des travailleurs financent les pensions des retraités. Le système prévoit un socle contributif de pension par point (chaque euro cotisé ouvre les mêmes droits) et un socle solidaire avec une garantie d'une pension minimum fixée à 85 % du SMIC net pour une carrière complète. L'année 2020 aurait dß voir naître cette nouvelle organisation avec une mise en place progressive dès 2025. Il n'en sera rien. Le 16 mars 2020, en raison de la crise économique et sanitaire consécutive de la pandémie de la COVID-19, le président Macron a annoncé que la réforme était désormais suspendue. Pour comprendre l'avenir de cette réforme en suspens, il est nécessaire de revenir sur ses « heurs » et « malheurs ». Dans un premier temps, la réforme a reçu un accueil plutôt favorable en raison d'attentes sociales fortes pour une plus grande égalité et simplicité dans le mode d'attribution de droits à la retraite. En 2017, la formule de campagne présidentielle d'Emmanuel Macron « un euro cotisé offre les mêmes droits quel que soit le statut » a contribué à la popularité du projet. La consultation citoyenne lancée en 2018, en parallèle à celle des partenaires sociaux, devait consolider le soutien des Français. Dans un second temps, l'élaboration pratique de la réforme s'est heurtée à une difficulté majeure : celle de dégager une large adhésion sur un projet aussi ambitieux. Plusieurs facteurs expliquent cette difficulté : ◆ L'instauration d'un système « super-universel » a été confrontée, simultanément, au problème posé par les problèmes de financement du système actuel en cas de croissance faible ; ◆ Le problème des transitions a été sous-estimé et s'est heurté à la question inéluctable des gagnants et perdants ; ◆ Les propositions de réforme bénéficient rarement, par nature, d'un large consensus initial dans la mesure où elles engendrent des oppositions idéologiques ; de plus, il subsiste des désaccords profonds au sein même de ses partisans.
    Keywords: système universel de retraite,projets de loi,crise économique,crise sanitaire,réforme
    Date: 2021–01–19
  9. By: Xi He (Center for Agricultural and Rural Development (CARD) at Iowa State University); Wendong Zhang (Center for Agricultural and Rural Development (CARD) at Iowa State University)
    Abstract: On May 11, 2021, China released the findings from its seventh national population census, which shows that its population totaled 1.41 billion in 2020 with an average annual growth rate of 0.053% since 2010, the lowest ten-year growth rate since its first population census in 1953. China's population structure is also changing-a growing share of residents are older than 65 and the birth rate is declining. Specifically, China's total new births sharply declined by around 18%, from 14.65 million in 2019 to 12 million in 2020, despite some skepticism that the birth rates might be overreported and the death rates may be underreported. On May 31, 2021, China announced that it will allow couples to have up to three children and will provide supportive measures to improve its population structure and to actively cope with an aging population after scrapping its decades-old one-child policy and adopting a two-child policy in 2016.
    Date: 2021–06
  10. By: Hellwagner, Timon; Weber, Enzo
    JEL: J11
    Date: 2021

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