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on Economics of Ageing |
| By: | Kalwij, Adriaan; Kanabar, Ricky |
| Abstract: | We examine individuals’ retirement behaviour in response to changes in the State Pension eligibility age introduced in various Pension Acts in the UK. The findings show the probability of retirement increases sharply once individuals become eligible for State Pension, by 40 pp and 34 pp for men and women respectively. We find no empirical support for men or women adjusting their expected retirement age upwards in response to an increase in the SP eligibility age. Our findings suggest that whilst changes in the State Pension eligibility age are important for individual’s actual retirement, they do not induce individuals to revise their expected retirement age and this can result in suboptimal retirement planning. The latter can be problematic for those who rely disproportionately on State Pension as their main source of income and, arguably, targeted communication campaigns are needed to improve retirement planning. |
| Date: | 2022–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2022-05&r= |
| By: | Marika Khozrevanidze |
| Abstract: | Many countries around the world have had to carry out radical reforms periodically in their pension systems. Global experience shows that it is important to optimize the costs of pension and social security systems in order to ensure a decent old age in addition to reducing the pressure on budgetary resources. By Georgia is changing demographic situation, special attention is paid to proper functioning of the pension policy. The pension reform carried out in Georgia in 2019 caused a difference of opinion among experts. This issue in today is conditions does not lose relevance. The presented thesis discusses the impact of the mandatory funded pension system on the well-being of people. Thesis includes the following issues: peculiarities of the formation of pension systems in Georgia. It is presented a small historical excursion in terms of the development of pension systems. In addition, are discussed the international experience of pension systems and comparative analysis in relation to Georgia. This paper specifically focuses on the essence of the mandatory funded pension system and assesses the current situation in terms of investment potential of the resource accumulated in the pension fund. In conclusion, are presented the challenges of this system and the ways of perfection. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2202.12721&r= |
| By: | András Simonovits (ELKH KRTK KTI, BME MI, Budapest, Tóth Kálmán u 4, 1097, Hungary) |
| Abstract: | A basic function of public pension systems is to guarantee a satisfactory old-age income for short-sighted low earners. In proportional (i.e., earnings-related) systems, this requires a sufficiently high contribution rate. At the same time, there should be a cap on the pension contribution base to leave sufficient room for the efficient private savings of prudent high earners. Taking into account the dependence of life expectancy on the earnings (figuratively called longevity gap), a well-chosen cap has an additional advantage: it limits the unintended income redistribution from the short-lived to the long-lived. Our strongly stylized model is able to illustrate numerically the impact of the contribution rate and of the cap on the social welfare and the unintended income redistribution. |
| Keywords: | public pension system, cap, longevity gap, income redistribution |
| JEL: | D10 H55 I38 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2209&r= |
| By: | Tao Xu |
| Abstract: | As the ageing population and childlessness are increasing in rural China, social pensions will become the mainstream choice for farmers, and the level of social pensions must be supported by better social insurance. The paper compares the history of rural pension insurance system, outlines the current situation and problems, analyses China Family Panel Studies data and explores the key factors influencing farmers' participation through an empirical approach. The paper shows that residents' social pension insurance is facing problems in the rural areas such as low level of protection and weak management capacity, which have contributed to the under-insured rate, and finds that there is a significant impact on farmers' participation in insurance from personal characteristics factors such as gender, age, health and (family) financial factors such as savings, personal income, intergenerational mobility of funds. And use of the Internet can help farmers enroll in pension insurance. The paper argues for the need to continue to implement the rural revitalisation strategy, with the government as the lead and the market as the support, in a concerted effort to improve the protection and popularity of rural pension insurance. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2204.00785&r= |
| By: | Joan Costa-i-Font; Cristina Vilaplana-Prieto |
| Abstract: | We study the dynamic drivers of expenditure on long-term care (LTC) programs, and more specifically, the effects of labour market participation of traditional unpaid caregivers (women aged 40 and older) on LTC spending. Next, we examine the spillover effects of a rise in LTC expenditure on health care expenditures (HCE) and the economy (GDP). Our estimates draw from a panel of more than a decade worth of expenditure data from a sample of OECD countries. We use a panel Vector Auto-regressive (panel-VAR) system that considers the dynamics between the dependent variables. We find that LTC expenditure increases with the rise of the labour market participation of the traditional unpaid caregiver (women over 40 years of age), and that such expenditures rise exerts large spillover effects on health spending components. We find that a 1% increase in female labour participation gives rise to a 1.48% increase in LTC expenditure and a 0.88% reduction in HCE. The effect of LTC spending over HCE is mainly driven by a reduction in inpatient and medicine expenditures, exhibiting large country heterogeneity. Finally, we document significant spillover effects of LTC expenditures on per capita GDP. |
| Keywords: | long-term care spending, panel-VAR, dynamic panel data, female labour market participation, health spending, care spillovers |
| JEL: | I18 J10 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9553&r= |
| By: | Daniel Dimitrov (University of Amsterdam) |
| Abstract: | This paper examines the optimal allocation of risk across generations whose savings mix is subject to illiquidity in the form of uncertain trading costs. We use a stylised two-period OLG framework, where each generation makes a portfolio allocation decision for retirement, and show that illiquidity reduces the range of transferable shocks between generations and thus lowers the benefits of risk-sharing. Higher illiquidity then may justify higher levels of risk sharing to compensate for the trading friction. We still find that a contingent transfers policy based on a reasonably parametrised savings portfolio with liquid and illiquid assets increased aggregate welfare. |
| Keywords: | intergenerational risk sharing, (il)liquidity, stochastic overlapping generations, funded pension plan |
| JEL: | G11 G23 E21 H55 |
| Date: | 2022–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20220028&r= |
| By: | Frédéric Gannon (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Gilles Le Garrec (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Vincent Touze (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | Afin d'analyser la situation française actuelle et les stratégies futures envisageables pour adapter le système des retraites au vieillissement, ce Policy brief revient sur le champ des possibles. De ce point de vue, l'Europe offre des pratiques diversifiées. Chaque système de retraite s'appuie sur deux logiques visant à combiner « solidarité » (garantir un niveau de vie minimum à la retraite indépendamment des cotisations versées) et « contributivité » (maintenir le niveau de vie à la retraite en fonction des cotisations versées). En Europe, la répartition est le mode de financement généralisé même si plusieurs pays du Nord ont opté pour une part significative de capitalisation. Au cours des prochaines décennies, tous les pays subiront une élévation du ratio de dépendance démographique, mettant sous pression l'équilibre financier des systèmes de retraite. Les mesures déjà adoptées devraient conduire à une baisse de la générosité (relative) de leur système de retraite ainsi qu'à un recul de l'âge des départs à la retraite. À long terme, l'effet global est très variable puisque certains pays voient le poids des dépenses dans le PIB diminuer, notamment la France, et d'autres augmenter, comme l'Allemagne. Le modèle français est l'héritier d'une longue histoire qui a abouti aux 42 régimes de retraite actuels. Trois grandes familles se distinguent selon le statut professionnel : les salariés du secteur privé, les salariés du secteur public (et assimilés) et les travailleurs non-salariés. Les réformes adoptées ont permis d'améliorer la situation financière sans restaurer totalement l'équilibre budgétaire. La crise financière de 2009 et la crise sanitaire de 2020 ont également mis le système à l'épreuve. Plusieurs pistes de réforme paramétrique ou systémique sont étudiées. Nous discutons des avantages et inconvénients des principales options : La marge d'augmentation du taux de cotisation est plutôt limitée car ce levier a déjà été très utilisé dans le passé et son niveau est devenu élevé au regard de la pratique européenne ; La dégradation régulière de la générosité relative des pensions est problématique. En effet, elle pourrait conduire, à terme, à un niveau de vie des retraités trop faible par rapport à celui des actifs. Une façon d'y remédier serait d'indexer les pensions sur le salaire moyen net ; L'âge moyen de liquidation des pensions est particulièrement bas en France par rapport aux autres pays européens. Son recul permettrait d'augmenter progressivement la masse de cotisations et de réduire les dépenses sans baisser la générosité. Par contre, il se heurte- rait à l'employabilité des seniors, à la pénibilité et aux inégalités d'espérance de vie. Une solution intéressante pourrait consister à encourager le recours à des dispositifs de retraite progressive et à tenir compte des écarts catégoriels d'espérance de vie ; La création d'un régime universel de base permettrait d'adopter des principes contributifs et solidaires communément partagés. D'un point de vue contributif, se pose la question centrale du choix du mode de calcul : prestations ou cotisations définies. D'un point de vue redistributif, l'universalité présenterait l'avantage de concentrer plus de ressources sur la pension de base, ce qui pourrait soutenir une dégressivité du taux de remplacement avec le revenu. Par ailleurs, elle faciliterait l'attribution d'une garantie de pension minimum. |
| Date: | 2021–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03555287&r= |
| By: | Samuel Guillemot (LEGO - Laboratoire d'Economie et de Gestion de l'Ouest - IMT - Institut Mines-Télécom [Paris] - IMT Atlantique - IMT Atlantique Bretagne-Pays de la Loire - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO - Université de Brest - UBS - Université de Bretagne Sud - UBL - Université Bretagne Loire - UBO - Université de Brest); Margot Dyen (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Annick Tamaro (LEGO - Laboratoire d'Economie et de Gestion de l'Ouest - IMT - Institut Mines-Télécom [Paris] - IMT Atlantique - IMT Atlantique Bretagne-Pays de la Loire - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO - Université de Brest - UBS - Université de Bretagne Sud - UBL - Université Bretagne Loire - UBO - Université de Brest) |
| Abstract: | Nursing homes are the quintessential example of vital service captivity. Consumers need vital services when they can no longer fulfil their basic needs on their own and their only choice is to delegate them to the market (e.g. care services for long-term and chronic illnesses, eating assistance at mealtimes). The service is referred to as ‘captive' because older people are generally unwilling to use it, and when they have to, their options are limited. For elderly consumers, there is ‘no exit possible', and as such they must integrate the service into their sense of self. The paper aims to (1) identify strategies for coping with vital service captivity and (2) present the identity negotiation mechanisms that lead people to choose one strategy over another. The study was conducted over a 6-month period in three nursing homes. Data collection includes semi-structured interviews, focus groups, participant observations, and micro-interviews with consumers – elderly residents and their families – and nursing home staff. Its main contribution is to highlight that coping with vital service captivity is a differential process. Consumers implement multiple coping strategies simultaneously, and these strategies are linked to three areas: routinization, socialization, and assimilation of a new social status. Moreover, implementing coping strategies means striking a balance between ‘disengagement' and ‘engagement' that not only takes into account former life trajectory, future prospects, and social comparisons, but also any changes in physical or cognitive skills and family support. Understanding these coping strategies and identity negotiation mechanisms highlights some unintended consequences on residents' well-being, such as the importance of standardizing how the service is organized because it provides a stable framework, or the importance given to the well-being of all stakeholders (other consumers, staff) as a result of the community living situation. |
| Keywords: | Vital service,Service captivity,Coping strategies,Elderly,Nursing home,Food,Well-being |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03567883&r= |
| By: | Lisa J. Dettling; Sarena F. Goodman; Sarah Reber |
| Abstract: | Borrowing for education has increased rapidly in the past several decades, such that the majority of non-housing debt on US households' balance sheets is now student loan debt. This chapter analyzes the implications of student loan borrowing for later-life economic well-being, with a focus on retirement preparation. We demonstrate that families holding student loan debt later in life have less savings than their similarly educated peers without such debt. However, these comparisons are misleading if the goal is to characterize the experience of the typical student borrower, as they fail to account for student borrowers who already paid off their debt. We develop strategies to locate families that ever financed their education with student loans in two large datasets which enables us to draw more meaningful comparisons. We find that student loan borrowers roughly follow the earnings, saving, and wealth trajectories of other college-educated families into late-career ages and are much better off financially than those that did not attend college. |
| Keywords: | College; Retirement; Saving; Student loan debt; Survey of consumer finances; Wealth |
| JEL: | G51 J26 J24 E21 I22 |
| Date: | 2022–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2022-19&r= |