nep-age New Economics Papers
on Economics of Ageing
Issue of 2022‒04‒11
twelve papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Association between Time Use Behaviour and Health and Well Being among Elderly: Evidence from the Longitudinal Ageing Study of India By Suresh Sharma; Jyoti Chaudhary
  2. The economy-wide effects of mandating private retirement incomes By George Kudrna
  3. Introducing an Austrian Backpack in Spain By João Brogueira de Sousa; Julián Díaz-Saavedra; Ramon Marimon
  4. Will the Jobs of the Future Support an Older Workforce? By Robert L. Siliciano; Gal Wettstein
  5. A health economic theory of occupational choice, aging, and longevity By Strulik, Holger
  6. Why Do Couples and Singles Save During Retirement? By Mariacristina De Nardi; Eric French; John Bailey Jones; Rory McGee
  7. Happy at Work - Possible at Any Age? By Cheryl Carleton; Mary T. Kelly
  8. Insuring Longevity Risk and Long-Term Care: Bequest, Housing and Liquidity By Mengyi Xu; Jennifer Alonso Garcia; Michael Sherris; Adam Shao
  9. The Future of Taxation in changing labour markets By Michael Christl; Ilias Livanos; Andrea Papini; Alberto Tumino
  10. Is the Age Structure of the Population One of the Determinants of the Household Saving Rate in China? A Spatial Panel Analysis of Provincial Data By Yin, Jingwen; Yuji Horioka, Charles
  11. España 1970-2070: Tendencias y proyecciones demográficas con un ojo puesto en las finanzas del sistema de pensiones By Angel de la Fuente
  12. State of the Art of Audio- and Video-Based Solutions for AAL By Aleksic, Slavisa; Atanasov, Michael; Agius, Jean Calleja; Camilleri, Kenneth; Čartolovni, Anto; Climent-Pérez, Pau; Colantonio, Sara; Cristina, Stefania; Despotovic, Vladimir; Ekenel, Hazim Kemal; Erakin, Ekrem; Florez-Revuelta, Francisco; Germanese, Danila; Grech, Nicole; Sigurđardóttir, Steinunn Gróa; Emirzeoğlu, Murat; Iliev, Ivo; Jovanovic, Mladjan; Kampel, Martin; Kearns, William; Klimczuk, Andrzej; Lambrinos, Lambros; Lumetzberger, Jennifer; Mucha, Wiktor; Noiret, Sophie; Pajalic, Zada; Pérez, Rodrigo Rodriguez; Petrova, Galidiya; Petrovica, Sintija; Pocta, Peter; Poli, Angelica; Pudane, Mara; Spinsante, Susanna; Salah, Albert Ali; Santofimia, Maria Jose; Islind, Anna Sigríđur; Stoicu-Tivadar, Lacramioara; Tellioğlu, Hilda; Zgank, Andrej

  1. By: Suresh Sharma; Jyoti Chaudhary (Institute of Economic Growth, Delhi University, Delhi)
    Abstract: Ageing is an inevitable demographic process occurring globally. Coming decades are projected to see a substantial increase in the elderly population and with rise in their number, the social, economic and health policy landscape for the elderly would also need upgradation in response to their needs. Thus identifying the drivers of health and well-being in elderly is essential. One such potential driver of health could be the daily routine of the elderly which focuses on the nature of activities being performed by them. Utilizing time use data from the Longitudinal Ageing Study of India (LASI), we examine the time allocation of the elderly, looking into how much time the elderly spend on active participation and how this allocation varies according to their socio-economic and demographic context. We further explore the association between self-rated health, wellbeing and daily activity engagement decisions of the elderly. The results from the analysis provide insight into activity engagement choices of the elderly across varying socio-economic classes. Time spent in working/volunteering and in exercising was found to have significant positive association with health and well-being indicators. Our results also show that the gender difference in nature of time utilisation by elderly is pervasive. For ageing to be successful, an active daily schedule for elderly needs to become a key concept of the social policy. Building employment opportunities for elderly and considering increasing the retirement age in a phased manner would not only lead to financial independence but also contribute to better health and well-being among them. Setting up community elderly associations aimed at teaching and promoting health enhancing activities among elderly can be considered. Length: 18 pages
    Keywords: Elderly, Time-Use Data, Health & Wellbeing, Policy
    JEL: E52 G12
    Date: 2022–02–01
  2. By: George Kudrna
    Abstract: This paper investigates the economy-wide effects of mandating private (employment-related) pensions. It draws on the Australian experience with its Superannuation Guarantee legislation which mandates contributions to private retirement (superannuation) accounts. Our key objective is to quantify the long-run implications of alternative mandatory superannuation contribution rates for household economic decisions over the life cycle, household welfare, and macroeconomic and fiscal aggregates. To that end, we develop a stochastic, overlapping generations (OLG) model with labor choice and endogenous retirement, which distinguishes between (i) ordinary private (liquid) assets and (ii) superannuation (illiquid) assets. The benchmark model is calibrated to the Australian economy, fitted to Australian demographic, household survey and macroeconomic data, and accounting for a detailed representation of Australia’s government policy, including its mandatory superannuation system. The model is then applied to simulate the effects of alternative mandatory superannuation contribution rates, with a specific focus on the counterfactual of a legislated future rate of 12% of gross wages. Based on the model simulations, we show that in the long run, this increased mandate generates larger average household wealth, output and consumption per capita and (rational) household welfare across income distribution.
    Keywords: Private Pension, Social Security, Income Taxation, Labor Supply, Endogenous Retirement, Stochastic General Equilibrium
    JEL: J32 H55 H31 J22 J26 C68
    Date: 2022–03
  3. By: João Brogueira de Sousa; Julián Díaz-Saavedra; Ramon Marimon
    Abstract: In an overlapping generations economy with incomplete insurance markets, the introduction of an employment fund -akin to the one introduced in Austria in 2003, also known as 'Austrian backpack'- can enhance production efficiency and social welfare. It complements the two classical systems of public insurance: pay-as-you-go (PAYG) pensions and unemployment insurance (UI). We show this in a calibrated dynamic general equilibrium model with heterogeneous agents of the Spanish economy in 2018. A `backpack' (BP) employment fund is an individual (across jobs) transferable fund, which earns a market interest rate as a return and is financed with a payroll tax (a BP tax). The worker can use the fund while unemployed or retired. Upon retirement, backpack savings can be converted into an (actuarially fair) retirement pension. To complement the existing PAYG pension and UI systems with a welfare maximising 6% BP tax would raise welfare by 0.96% of average consumption at the new steady state, if we model Spain as an open economy. As a closed economy, there are important general equilibrium effects and, as a result, the social value of introducing the backpack is substantially greater: 16.14%, with a BP tax of 18%. In both economies, the annuity retirement option is an important component of the welfare gains.
    Keywords: computable general equilibrium, welfare state, social security reform, Retirement
    JEL: C68 H55 J26
    Date: 2022–03
  4. By: Robert L. Siliciano; Gal Wettstein
    Abstract: Retirement ages in the United States have been rising for decades but the continuation of this trend depends on employers in the future looking to fill jobs that older workers can do. This study considers whether the occupations that are projected by the Bureau of Labor Statistics to grow faster by 2030 are those that are suitable for older workers. Using a variety of different metrics for suitability, the analysis finds only weak evidence that the occupations most suitable for older workers are projected to grow particularly slowly.
    Date: 2022–03
  5. By: Strulik, Holger
    Abstract: In this paper, I propose a life cycle model of occupational choice with endogenous health behavior, aging, and longevity. Health-demanding work leads to a faster accumulation of health deficits and is remunerated with a hazard markup on wages. Health deficit accumulation is also influenced by unhealthy consumption and health care expenditure. I calibrate the model for a 20 year old average American in 2010 and show the following results, among others. Health-demanding work is ceteris paribus preferred by male, young, and healthy individuals with a relatively low level of education. Health demanding work has a negligible effect on health behavior because income and health investment effects largely offset each other, implying that health effects can be attributed almost fully to the direct health burden of work. Better medical technology induces low-skilled individuals to spend a greater part of their life in health-demanding work and thus increases the health gradient of education. High wealth endowments protect against unhealthy occupational choices. I show robustness of the results in an extension of the model with regard to endogenous retirement.
    Keywords: occupational choice,health behavior,health deficits,aging,longevity,retirement
    JEL: D15 I10 I12 J24 J26
    Date: 2022
  6. By: Mariacristina De Nardi (College of Liberal Arts, University of Minnesota); Eric French (University of Cambridge); John Bailey Jones (Federal Reserve Bank of Richmond); Rory McGee (University of Western Ontario)
    Abstract: While the savings of retired singles tend to fall with age, those of retired couples tend to rise. We estimate a rich model of retired singles and couples with bequest motives and uncertain longevity and medical expenses. Our estimates imply that while medical expenses are an important driver of the savings of middle-income singles, bequest motives matter for couples and high-income singles, and generate transfers to non-spousal heirs whenever a household member dies. The interaction of medical expenses and bequest motives is a crucial determinant of savings for all retirees. Hence, to understand savings, it is important to model household structure, medical expenses, and bequest motives.
    Date: 2021
  7. By: Cheryl Carleton (Department of Economics, Villanova School of Business, Villanova University); Mary T. Kelly (Department of Economics, Villanova School of Business, Villanova University)
    Abstract: With the growing attachment of older workers to the labor force and their engagement in alternative work arrangements, it is important to investigate the characteristics of older cohorts of individuals who are in the labor market and the factors that influence job satisfaction, as job satisfaction may be a predictor of which older individuals are likely to continue to work and in what type of work arrangement. This study uses several recent years of the General Social Survey to both explore the characteristics of older workers and investigate what contributes to job satisfaction, controlling for both gender and work arrangement. It splits the sample of workers into two cohorts to test for differences in job satisfaction between those who are nearing retirement age (55-64) and those who continue to work post the traditional retirement age (65-80). For the sample as a whole, and similar to other studies, we find that job satisfaction is higher for women and for those who work in alternative work arrangements as compared to those in regular jobs. We also find that there are differences in what contributes to job satisfaction between the two groups of older workers. These outcomes may inform firms about what they might do in order to keep these workers as well as informing the government on whether it is necessary to rethink how some benefits are both provided and paid for.
    Keywords: Job satisfaction; Alternative Work Arrangements; Older workers
    JEL: J28 J16 J48
    Date: 2022–01
  8. By: Mengyi Xu; Jennifer Alonso Garcia; Michael Sherris; Adam Shao
    Date: 2022
  9. By: Michael Christl (European Commission - JRC); Ilias Livanos (European Centre for the Development of Vocational Training (CEDEFOP)); Andrea Papini (European Commission - JRC); Alberto Tumino (European Commission - JRC)
    Abstract: This paper provides a first assessment of the fiscal and distributional consequences of the ongoing structural changes in the labour markets of EU Member States, mostly driven by technological progress and ageing. Cedefop 2020 Skill forecasts, EUROSTAT population projections and the forecast on pension expenditures from the 2021 Ageing Report depict a scenario of an ageing population, an inverted U-shaped unemployment trend and potentially polarising labour markets, the latter mostly driven by a surge in high-skill occupations. This analysis makes use of the microsimulation model EUROMOD and reweighting techniques to analyse the fiscal and distributional impacts of these trends, given the current tax-benefit policies. The results suggest that the macro trends will increase pressure on government budgets. The analysis also shows evidence of the capacity of the current tax-benefit systems to counterbalance the increases in income inequality and poverty risks triggered by the expected future labour markets developments.
    Keywords: income distribution, budget, deficit, job polarisation, population ageing
    JEL: J11 J21 H68
    Date: 2022–03
  10. By: Yin, Jingwen; Yuji Horioka, Charles
    Abstract: In this paper, we use provincial panel data on China for the 2002-19 period to conduct a spatial autocorrelation analysis of household saving rates as well as a dynamic panel analysis of the determinants of household saving rates using a spatial Durbin model. To summarize our main findings, we find that, in China, the household saving rate shows significant positive spatial autocorrelation with an overall “high-high” and “low-low”clustering pattern, that, as predicted by the life-cycle hypothesis, the youth dependency ratio and the old-age dependency ratio have a negative and significant impact on the household saving rate, and that the logarithm of per capita household disposable income, the regional economic growth rate, the share of the urban population, the industrialization rate, and the income disparity between urban and rural areas also have a significant impact on the household saving rate.
    Keywords: age structure of the population, China, dependency ratio, household saving rate, life-cycle hypothesis or model, old-age dependency ratio, spatial autocorrelation, spatial Durbin model, youth dependency ratio, D14, D15, E21, G51, J11, O16, R20
    Date: 2022–03
  11. By: Angel de la Fuente
    Abstract: En esta nota se repasa la evolución observada y prevista de la natalidad, la mortalidad y las migraciones en España, así como su impacto sobre la población del país y su estructura por edades durante el último medio siglo y el medio siglo que viene. En la primera parte se analizan las causas inmediatas del proceso de envejecimiento que registra nuestro país y se describe su evolución desde 1970 hasta el presente. La segunda se centra en las perspectivas demográficas para las próximas décadas de acuerdo con las proyecciones de población elaboradas por el INE, Eurostat y la AIReF. La discusión se centrará en las similitudes y diferencias entre las distintas proyecciones y entre las hipótesis básicas y modelos que las sustentan, así como en las implicaciones del análisis para la política migratoria y la sostenibilidad de nuestras cuentas públicas.
    Date: 2022–03
  12. By: Aleksic, Slavisa; Atanasov, Michael; Agius, Jean Calleja; Camilleri, Kenneth; Čartolovni, Anto; Climent-Pérez, Pau; Colantonio, Sara; Cristina, Stefania; Despotovic, Vladimir; Ekenel, Hazim Kemal; Erakin, Ekrem; Florez-Revuelta, Francisco; Germanese, Danila; Grech, Nicole; Sigurđardóttir, Steinunn Gróa; Emirzeoğlu, Murat; Iliev, Ivo; Jovanovic, Mladjan; Kampel, Martin; Kearns, William; Klimczuk, Andrzej; Lambrinos, Lambros; Lumetzberger, Jennifer; Mucha, Wiktor; Noiret, Sophie; Pajalic, Zada; Pérez, Rodrigo Rodriguez; Petrova, Galidiya; Petrovica, Sintija; Pocta, Peter; Poli, Angelica; Pudane, Mara; Spinsante, Susanna; Salah, Albert Ali; Santofimia, Maria Jose; Islind, Anna Sigríđur; Stoicu-Tivadar, Lacramioara; Tellioğlu, Hilda; Zgank, Andrej
    Abstract: It is a matter of fact that Europe is facing more and more crucial challenges regarding health and social care due to the demographic change and the current economic context. The recent COVID-19 pandemic has stressed this situation even further, thus highlighting the need for taking action. Active and Assisted Living (AAL) technologies come as a viable approach to help facing these challenges, thanks to the high potential they have in enabling remote care and support. Broadly speaking, AAL can be referred to as the use of innovative and advanced Information and Communication Technologies to create supportive, inclusive and empowering applications and environments that enable older, impaired or frail people to live independently and stay active longer in society. AAL capitalizes on the growing pervasiveness and effectiveness of sensing and computing facilities to supply the persons in need with smart assistance, by responding to their necessities of autonomy, independence, comfort, security and safety. The application scenarios addressed by AAL are complex, due to the inherent heterogeneity of the end-user population, their living arrangements, and their physical conditions or impairment. Despite aiming at diverse goals, AAL systems should share some common characteristics. They are designed to provide support in daily life in an invisible, unobtrusive and user-friendly manner. Moreover, they are conceived to be intelligent, to be able to learn and adapt to the requirements and requests of the assisted people, and to synchronise with their specific needs. Nevertheless, to ensure the uptake of AAL in society, potential users must be willing to use AAL applications and to integrate them in their daily environments and lives. In this respect, video- and audio-based AAL applications have several advantages, in terms of unobtrusiveness and information richness. Indeed, cameras and microphones are far less obtrusive with respect to the hindrance other wearable sensors may cause to one's activities. In addition, a single camera placed in a room can record most of the activities performed in the room, thus replacing many other non-visual sensors. Currently, video-based applications are effective in recognising and monitoring the activities, the movements, and the overall conditions of the assisted individuals as well as to assess their vital parameters (e.g., heart rate, respiratory rate). Similarly, audio sensors have the potential to become one of the most important modalities for interaction with AAL systems, as they can have a large range of sensing, do not require physical presence at a particular location and are physically intangible. Moreover, relevant information about individuals' activities and health status can derive from processing audio signals (e.g., speech recordings). Nevertheless, as the other side of the coin, cameras and microphones are often perceived as the most intrusive technologies from the viewpoint of the privacy of the monitored individuals. This is due to the richness of the information these technologies convey and the intimate setting where they may be deployed. Solutions able to ensure privacy preservation by context and by design, as well as to ensure high legal and ethical standards are in high demand. After the review of the current state of play and the discussion in GoodBrother, we may claim that the first solutions in this direction are starting to appear in the literature. A multidisciplinary debate among experts and stakeholders is paving the way towards AAL ensuring ergonomics, usability, acceptance and privacy preservation. The DIANA, PAAL, and VisuAAL projects are examples of this fresh approach. This report provides the reader with a review of the most recent advances in audio- and video-based monitoring technologies for AAL. It has been drafted as a collective effort of WG3 to supply an introduction to AAL, its evolution over time and its main functional and technological underpinnings. In this respect, the report contributes to the field with the outline of a new generation of ethical-aware AAL technologies and a proposal for a novel comprehensive taxonomy of AAL systems and applications. Moreover, the report allows non-technical readers to gather an overview of the main components of an AAL system and how these function and interact with the end-users. The report illustrates the state of the art of the most successful AAL applications and functions based on audio and video data, namely (i) lifelogging and self-monitoring, (ii) remote monitoring of vital signs, (iii) emotional state recognition, (iv) food intake monitoring, activity and behaviour recognition, (v) activity and personal assistance, (vi) gesture recognition, (vii) fall detection and prevention, (viii) mobility assessment and frailty recognition, and (ix) cognitive and motor rehabilitation. For these application scenarios, the report illustrates the state of play in terms of scientific advances, available products and research project. The open challenges are also highlighted. The report ends with an overview of the challenges, the hindrances and the opportunities posed by the uptake in real world settings of AAL technologies. In this respect, the report illustrates the current procedural and technological approaches to cope with acceptability, usability and trust in the AAL technology, by surveying strategies and approaches to co-design, to privacy preservation in video and audio data, to transparency and explainability in data processing, and to data transmission and communication. User acceptance and ethical considerations are also debated. Finally, the potentials coming from the silver economy are overviewed.
    Keywords: Active and Assisted Living,AAL applications,Data sensing and processing,Computer Vision,Audio-signal processing,Social Robotics,Human-Computer Interaction,Artificial Intelligence,Lifelogging and self- monitoring,Vital signs remote monitoring,Emotional and affective state recognition,Food intake monitoring,Activity and behaviour recognition,Activity and personal assistance,Gesture recognition,Fall detection and prevention,Mobility assessment,Frailty recognition,Cognitive and motor rehabilitation,Co-design,Silver economy
    JEL: J14 L86 O18
    Date: 2022

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