nep-age New Economics Papers
on Economics of Ageing
Issue of 2022‒01‒17
eleven papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. The effects of financial incentives and disincentives on teachers' retirement decisions: Evidence from the 2003 French pension reform By Denis Fougère; Pierre Gouëdard
  2. Household bargaining, pension contributions and retirement expectations: Evidence from the German Panel on Household Finances By Fernandes, Inês; Schmidt, Tobias
  3. The Effects of an Increase in the Retirement Age on Health – Evidence from Administrative Data By Barschkett, Mara; Geyer, Johannes; Haan, Peter; Hammerschmid, Anna
  4. Disparities in the population burden of joint cognitive and physical impairment in the US, 1998-2016 By Shubhankar Sharma; Jo M. Hale; Mikko Myrskylä; Hill Kulu
  5. Home Alone: Widows' Well-Being and Time By Adena, Maja; Hamermesh, Daniel S.; Myck, Michal; Oczkowska, Monika
  6. Older Immigrants – New Poverty Risk in Scandinavian Welfare States? By Gustafsson, Björn Anders; Jakobsen, Vibeke; Mac Innes, Hanna; Pedersen, Peder J.; Österberg, Torun
  7. Intergenerational wealth transmission and mobility in Great Britain: what components of wealth matter? By Paul Gregg; Ricky Kanabar
  8. Rising Geographic Disparities in US Mortality By Benjamin K. Couillard; Christopher L. Foote; Kavish Gandhi; Ellen Meara; Jonathan Skinner
  9. Financial Literacy and Retirement Planning – A Capital Market Based View By Gaar, Eduard
  10. Excess mortality versus COVID-19 death rates: a spatial analysis of socioeconomic disparities and political allegiance across US states By Aron, Janine; Muellbauer, John
  11. Taking the Pulse of Nations: A Biometric Measure of Well-being By David G. Blanchflower; Alex Bryson

  1. By: Denis Fougère (OSC - Observatoire sociologique du changement - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques [Sciences Po] - Sciences Po - Sciences Po, CEPR - Center for Economic Policy Research - CEPR, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Pierre Gouëdard (OECD - Organisation for Economic Co-operation and Development , LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques [Sciences Po] - Sciences Po - Sciences Po)
    Abstract: Using a sample of 12,463 high-school teachers, we evaluate the impact of the 2003 reform of the French national pension scheme. Considering the progressive implementation of the reform, we cannot use a reduced-form approach. Consequently, we estimate an option value modelà la Stock and Wise (Econometrica, 1990). Structural estimates suggest that teachers are slightly risk averse, that their quarterly discount factor is close to unity and that their preference for leisure is comparable to the one found by Stock and Wise (1990). Simulations imply that teachers respond significantly to monetary incentives offered to those who continue working after the legal retirement age. Our partial effectiveness analysis shows that the reform has progressively increased the average retirement age up to 61. This shift in the retirement age distribution should have resulted in year 2010 in a 6.37% decrease of public spendings associated with high-school teachers' pensions (except income taxes and other types of expenses, such as those relating to health, social security and widowhood).
    Keywords: option value model,pension reform,structural evaluation
    Date: 2021–10
  2. By: Fernandes, Inês; Schmidt, Tobias
    Abstract: In this paper, we study the relationship between intrahousehold bargaining styles, bar-gaining power and individual pension contributions and expected standard of living in retirement, using microdata from the German Panel on Household Finances (PHF) survey. The paper builds on a theoretical framework that predicts non-cooperative (cooperative) households to have lower (higher) expected standards of living in retirement, due to the uncertainty regarding intrahousehold resource sharing. The empirical results suggest that household bargaining is significantly correlated with individual retirement-related behaviour and expectations, with gender differences. Cooperative partners expect higher standards of living in retirement, relative to non-cooperative ones, because they may insure againstold-age poverty by pooling and redistributing personal and household resources amongst each other in retirement. Finally, our data indicate that intracouple information sharing and altruism may mediate the relationship between household decision-making and individual contributions to private pension plans, especially in non-cooperative households.
    Keywords: Intrahousehold bargaining,Intrahousehold information sharing,Gender,House-hold finance,Private pension plans,Retirement expectations,Altruism,Panel on HouseholdFinances
    JEL: D12 D14 G51
    Date: 2021
  3. By: Barschkett, Mara (DIW Berlin); Geyer, Johannes (DIW Berlin); Haan, Peter (DIW Berlin); Hammerschmid, Anna (DIW Berlin)
    Abstract: This study analyzes the causal effect of an increase in the retirement age on health. We exploit a sizable cohort-specific pension reform for women using two complementary empirical approaches – a Regression Discontinuity Design and a Difference-in-Differences approach. The analysis is based on official records covering all individuals insured by the public health system in Germany and including all certified diagnoses by practitioners. This enables us to gain a detailed understanding of the multi-dimensionality in these health effects. The empirical findings reflect the multi-dimensionality but allow for deriving two broader conclusions. We provide evidence that the increase in the retirement age negatively affects health outcomes as the prevalence of several diagnoses, e.g., mental health, musculoskeletal diseases, and obesity, increases. In contrast, we do not find support for an improvement in health related to a prolonged working life since there is no significant evidence for a reduction in the prevalence of any health outcome we consider. These findings hold for both identification strategies, are robust to sensitivity checks, and do not change when correcting for multiple hypothesis testing.
    Keywords: Germany, retirement, pension reform, health, ICD-10, Regression Discontinuity Design, Difference-in-Differences
    JEL: I10 I12 I18 J14 J18 J26
    Date: 2021–11
  4. By: Shubhankar Sharma (Max Planck Institute for Demographic Research, Rostock, Germany); Jo M. Hale (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany); Hill Kulu (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Although cognitive and physical impairments often co-occur in older individuals, they are typically studied as separate outcomes. Using the Health and Retirement Study (1998-2016) and multistate models, we quantify the population burden of their co-occurrence (joint impairment) using two key indicators- lifetime risk and expectancy, by gender, race/ethnicity/nativity, education and their interactions for Americans aged 50 and over. Furthermore, we analyze what fraction of the racial/ethnic inequalities in joint impairment is attributable to inequalities in educational attainment. Results reveal that 58% of women and 42% of men aged 50 are predicted to experience joint impairment in their remaining life expectancy. Women also live longer in joint impairment than men (3.4 vs 1.9 years). Foreign-born Latinas have 83% lifetime risk compared with Whites’ 52% and three times more jointly impaired years. Lower educated men experience 32 percentage points higher lifetime risk and three times more joint impairment years than higher educated men. The lowest educated Blacks and Latinx carry the greatest joint impairment burden. This study emphasizes the importance of considering cognitive and physical impairment simultaneously in assessing older-age disability. The finding that up to 74% of the racial/ethnic disparities are attributable to inequalities in educational attainment can inform policy.
    JEL: J1 Z0
    Date: 2022
  5. By: Adena, Maja (WZB - Social Science Research Center Berlin); Hamermesh, Daniel S. (Barnard College); Myck, Michal (Centre for Economic Analysis, CenEA); Oczkowska, Monika (Centre for Economic Analysis, CenEA)
    Abstract: Losing a partner is a life-changing experience. We draw on numerous datasets to examine differences between widowed and partnered older women and to provide a comprehensive picture of well-being in widowhood. Most importantly, our analysis accounts for time use in widowhood, an aspect which has not been studied previously. Based on data from several European countries we trace the evolution of well-being of women who become widowed by comparing them with their matched non-widowed 'statistical twins' and examine the role of an exceptionally broad set of potential moderators of widowhood's impact on well-being. We confirm a dramatic decrease in mental health and life satisfaction after the loss of partner, followed by a slow recovery. An extensive set of controls recorded prior to widowhood, including detailed family ties and social networks, provides little help in explaining the deterioration in well-being. Unique data from time-diaries kept by older women from several European countries and the U.S. tell us why: the key factor behind widows' reduced well-being is increased time spent alone.
    Keywords: widowhood, well-being, social networks, time use
    JEL: I31 I19 J14
    Date: 2021–11
  6. By: Gustafsson, Björn Anders (University of Gothenburg); Jakobsen, Vibeke (VIVE - The Danish Centre for Applied Social Science); Mac Innes, Hanna (University of Gothenburg); Pedersen, Peder J. (Aarhus University); Österberg, Torun (University of Gothenburg)
    Abstract: Many European high-income countries face a rapid increase in the number of immigrants from low- and middle-income countries reaching the normal pension age. Thus, it is increasingly relevant to ask: how are older migrants from such countries faring? Here we study poverty rates and determinants of poverty among natives and persons born in Bosnia, Iran, Iraq, Yugoslavia and Turkey living in Denmark or Sweden in 2010. Income data on all such persons aged 65 to 82 living in the two destination countries are analysed. In both Denmark and Sweden, we report much higher poverty rates among the immigrants studied than among natives. Estimated probability models show that being poor is related to a person's education, family status and age, as well as year of arrival in the destination country and the labour market and his or her residential status at the age of 55. However, the labour market in the destination country at the time of arrival also matter. Persons born in Yugoslavia or Turkey who had immigrated to Denmark during the '70s and '80s were more likely to be in poverty in 2010 that their counterparts with the same characteristics who had immigrated to Sweden.
    Keywords: Denmark, Sweden, poverty, older immigrants
    JEL: I32 J14 J15 J61
    Date: 2021–11
  7. By: Paul Gregg (University of Bath); Ricky Kanabar (University of Bath)
    Abstract: The rapid widening of intergenerational wealth inequalities has led to sharp differences in living standards in Great Britain. Understanding which components of wealth are driving such inequalities is important for improving wealth and social mobility. Using the Wealth and Assets Survey we show the change in the intergenerational persistence in wealth in Great Britain is driven by inequality in offspring housing wealth. We estimate between 2010/12-2016/18 the intergenerational wealth elasticity in housing increased by 18 percentage points for individuals born to the same parental wealth background but born six years apart, and that offspring homeownership has become increasingly stratified by parental wealth even after controlling for individual's own characteristics. We show by age 35 homeownership levels are three times higher among offspring whose parents are high educated homeowners compared to those whose parents are from a low educated renter background. In terms of housing wealth, by age 35 the former group holds approximately ten-times the level of housing wealth compared to the latter. We show such differences in housing wealth hold across the lifecycle and if maintained imply the intergenerational wealth elasticity in housing wealth is set to double in approximately one century. Taken together, our findings highlight the increasingly important role parental wealth has for determining whether offspring hold and the rate at which they accumulate particular types of wealth, and the implications for intergenerational wealth persistence, wealth mobility and inequality now and in the future.
    Keywords: Wealth, Housing, Inequality, intergenerational mobility, Great Britain.
    JEL: D31 D63 I24
    Date: 2022–01
  8. By: Benjamin K. Couillard; Christopher L. Foote; Kavish Gandhi; Ellen Meara; Jonathan Skinner
    Abstract: The 21st century has been a period of rising inequality in both income and health. In this study, we find that geographic inequality in mortality for midlife Americans increased by about 70 percent from 1992 to 2016. This was not simply because states such as New York or California benefited from having a high fraction of college-educated residents who enjoyed the largest health gains during the last several decades. Nor was higher dispersion in mortality caused entirely by the increasing importance of “deaths of despair,” or by rising spatial income inequality during the same period. Instead, over time, state-level mortality has become increasingly correlated with state-level income; in 1992 income explained only 3 percent of mortality inequality, but by 2016 state-level income explained 58 percent. These mortality patterns are consistent with the view that high-income states in 1992 were better able to enact public health strategies and adopt behaviors that, over the next quarter-century, resulted in pronounced relative declines in mortality. The substantial longevity gains in high-income states led to greater cross-state inequality in mortality.
    Keywords: health; health policy; mortality
    JEL: I11 I12 I14 I15 I18
    Date: 2021–09–01
  9. By: Gaar, Eduard
    Abstract: Die vorliegende Dissertation untersucht den Zusammenhang zwischen der Altersvorsorge individueller Privatpersonen und dem Kapitalmarkt in Deutschland und Europa. Im Fokus steht dabei die finanzielle Bildung von Privatpersonen, die nötig ist, um adäquat vorzusorgen, die Befähigung sich dieses Wissen anzueignen und die Fähigkeit des Kapitalmarkts, die Basis für eine kapitalmarktbasierte Altersvorsorge zu sein. Die ersten Kapitel bieten Literaturüberblicke zum Thema Finanzwissen und Finanzbildung, welche außerdem die Basis für die weiteren Arbeiten darstellen. Diese zeigen bereits ein mittelmäßiges bis schlechtes Kompetenzniveau der Finanzbildung in Deutschland und damit schlechte Voraussetzungen, um angemessen, also vermögenssteigernd und rentensichernd, für die Altersvorsorge vorzusorgen. Basierend auf dieser Erkenntnis werden Studierende mit Bezug zu den Wirtschaftswissenschaften in Russland und Deutschland in einer Umfrage zu grundlegendem Finanzmarktwissen befragt. Es wird unterstellt, dass die Studierenden durch ihre fachliche Nähe eine überdurchschnittliche Finanzbildung haben und damit als Multiplikatoren fungieren könnten. Es wurde zwar ein besseres Finanzwissen im Vergleich zur Allgemeinheit nachgewiesen, jedoch haben auch die Studierenden Probleme, alle Fragen richtig zu beantworten. Folglich sind Studierende nur bedingt in der Lage, als Multiplikatoren für Finanzwissen zu fungieren, wobei sich die Frage stellt, ob dieses Ergebnis zufällig aufgetreten ist oder eine systematische Verzerrung vorliegt. Literaturüberblicke zum home und self-serving bias zeigen, dass diese oft und weit verbreitet sowohl auf dem Kapitalmarkt als auch unter professionellen Anlegern vorkommen. Eine weitere Umfrage unter Studierenden in Russland und Deutschland zeigt, dass auch sie dem home bias unterliegen, während eine Gruppe von internationalen Studierenden keinen home bias zeigt. Dies lässt vermuten, dass internationale Erfahrung den home bias zu reduzieren scheint. Neben der Befähigung von Privatpersonen zu einer adäquaten Altersvorsorge stellt sich auch die Frage, ob der Kapitalmarkt in Deutschland eine gute Grundlage für eine Altersvorsorge bilden kann. Die Notierungszahlen im Regulierten Markt sind seit Jahren rückläufig, wobei dieser Rückgang nicht durch Insolvenzen, sondern hauptsächlich durch Fusionen und Rückzüge vom Kapitalmarkt zu erklären ist. Um diesen Vorgang aufzuhalten und umzukehren, bedarf es junger Unternehmen, die den Schritt an die Börse wagen. Ein Beispiel dafür, wie junge Unternehmen an die Börse gelockt werden können, liefert das Einstiegssegment NewConnect in Warschau. Sie verzeichnet seit mehreren Jahren starke Zuwächse und kann somit ein Beispiel für die deutsche Scale sein. Abschließend richtet sich der Blick auf den gesamten europäischen Markt. Die abschließende Untersuchung fokussiert sich auf europäische börsennotierte Unternehmen und den Zusammenhang zwischen der Aktienkursperformance und dem systematischen Risiko, in Abhängigkeit des Immobilienbesitzes der Unternehmen. Es zeigt sich, dass Unternehmen Investitionen in Immobilien in unsicheren Zeiten vermeiden, obwohl Immobilien das systematisch Risiko senken. Gleichzeitig erhöht der Immobilienbesitz die Performance in sicheren Zeiten, während in unsicheren Zeiten der Immobilienbesitz zu einer schlechteren Aktienkursperformance führt. Die kumulative Dissertation besteht aus neun eigenständigen Aufsätzen, wobei vier bereits veröffentlicht bzw. zur Veröffentlichung angenommen sind, zwei Kapitel bei einem wissenschaftlichen Journal unter Begutachtung sind und drei weitere als Arbeitsdokumente in dieser Dissertation vorzufinden sind.
    Date: 2021
  10. By: Aron, Janine; Muellbauer, John
    Abstract: Excess mortality is a more robust measure than the counts of COVID􏰀19 deaths typically used in epidemiological and spatial studies. Measurement issues around excess mortality, considering data quality and comparability both internationally and within the U.S., are surveyed. This paper is the first state􏰀level spatial analysis of cumulative excess mortality for the U.S. in the first full year of the pandemic. There is strong evidence that, given appropriate controls, states with higher Democrat vote shares experienced lower excess mortality (consistent with county􏰀 level studies of COVID􏰀19 deaths). Important demographic and socio􏰀economic controls from a broad set tested were racial composition, age structure, population density, poverty, income, temperature, and timing of arrival of the pandemic. Interaction effects suggest the Democrat vote share effect of reducing mortality was even greater in states where the pandemic arrived early. Omitting political allegiance leads to a significant underestimation of the mortality disparities for minority populations.
    Keywords: Excess Mortality, COVID-19, Spatial Analysis, US States, Political Polarization
    JEL: I14 I18 J11
    Date: 2021–12
  11. By: David G. Blanchflower (Bruce V. Rauner ’78 Professor of Economics, Dartmouth College, Hanover, NH 03755-3514. Adam Smith School of Business, University of Glasgow and NBER); Alex Bryson (Professor of Quantitative Social Science, UCL Social Research Institute, University College London, 20 Bedford Way, London WC1H 0AL)
    Abstract: A growing literature identifies associations between subjective and biometric indicators of wellbeing. These associations, together with the ability of subjective wellbeing (SWB) metrics to predict health and behavioral outcomes, have spawned increasing interest in SWB as an important concept in its own right. However, some social scientists continue to question the usefulness of SWB metrics. We contribute to this literature in three ways. First, we introduce a biometric measure of wellbeing – pulse – which has been largely overlooked. Using nationally representative data on 165,000 individuals from the Health Survey for England (HSE) and Scottish Health Surveys (SHeS) we show that its correlates are similar in a number of ways to those for SWB, and that it is highly correlated with SWB metrics, as well as self-assessed health. Second, we examine the determinants of pulse rates in mid-life (age 42) among the 9,000 members of the National Child Development Study (NCDS), a birth cohort born in a single week in 1958 in Britain. Third, we track the impact of pulse measured in mid-life (age 42) on health and labor market outcomes at age 50 in 2008 and age 55 in 2013. The probability of working at age 55 is negatively impacted by pulse rate a decade earlier. The pulse rate has an impact over and above chronic pain measured at age 42. General health at 55 is lower the higher the pulse rate at age 42, while those with higher pulse rates at 42 also express lower life satisfaction and more pessimism about the future at age 50. Taken together, these results suggest social scientists can learn a great deal by adding pulse rates to the metrics they use when evaluating people’s wellbeing.
    Keywords: pulse; wellbeing; mental health; general health; life satisfaction; paid work; life-course; birth cohort; NCDS.
    JEL: I10 J1
    Date: 2021–12–01

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