nep-age New Economics Papers
on Economics of Ageing
Issue of 2022‒05‒23
nine papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Caregiving subsidies and spousal early retirement intentions By Costa-Font, Joan; Vilaplana-Prieto, Cristina
  2. Patterns of Time Use among Older People By Ferranna, Maddalena; Sevilla, J.P.; Zucker, Leo; Bloom, David E.
  3. The future of long-term care in Quebec: what are the cost savings from a realistic shift towards more home care? By Nicholas-James Clavet; Pierre-Carl Michaud; Réjean Hébert; Julien Navaux
  4. AI, Ageing and Brain-Work Productivity: Technological Change in Professional Japanese Chess By Eiji Yamamura; Ryohei Hayashi
  5. Catastrophic health expenditure and mental health in the older Chinese population: the moderating role of social health insurance By Yang, Wei; Hu, Bo
  6. INTAXMOD - Inheritance and Gift Taxation in the Context of Ageing By KRENEK Alexander; SCHRATZENSTALLER Margit; GRUNBERGER Klaus; THIEMANN Andreas
  7. Italian economic growth and the North-South gap: Historical trends and future projections in light of the recent demographic scenarios By Marta De Philippis; Andrea Locatelli; Giulio Papini; Roberto Torrini
  8. Measuring “Long and Healthy Lives†: Healthier Lives Longer Lives? By Gordon Anderson; Tongtong Hao
  9. How do Private Equity Fees vary across Public Pensions? By Juliane Begenau; Emil Siriwardane

  1. By: Costa-Font, Joan; Vilaplana-Prieto, Cristina
    Abstract: Balancing caregiving duties and work can be both financially and emotionally burdensome, especially when care is provided to a spouse at home. This paper documents that financial respite for caregivers can influence individuals’ early retirement decisions. We examine the effect of a reform extending long-term care (LTC) benefits (in the form of subsidies and supports) in Spain after 2007 on caregiving spouse’s early retirement intention. We subsequently examine the effect of austerity spending cuts in 2012 reducing such publicly funded benefits, and we compare the estimates to the effects of an early retirement reform among private sector workers in 2013. We document evidence of a 10pp reduction in the early retirement intentions after the LTC reform even though the effect is heterogeneous by type of benefit. Consistently, austerity spending cuts in benefits are found to weaken retirement intentions. Our estimates suggest that cuts in caregiving subsidies exert a much stronger effect on early retirement intentions than actual early retirement reforms.
    Keywords: long-term care; employment; retirement; informal care; caregiving subsidies; home care
    JEL: I18 J14
    Date: 2022–04–20
  2. By: Ferranna, Maddalena (Harvard School of Public Health); Sevilla, J.P. (Harvard School of Public Health); Zucker, Leo (Harvard School of Public Health); Bloom, David E. (Harvard University)
    Abstract: We analyze time use studies to describe how people allocate their time as they age, especially among paid work, unpaid work, leisure, and personal care. We emphasize differences in time allocation between older (i.e., those aged 65+) and younger people; between developed and developing countries; and by other demographic characteristics such as gender, marital status, health status, and educational attainment. We summarize related economic literature and crystallize a framework for thinking about key conceptual issues involving time allocation over the life cycle. We conclude by assessing the adequacy of global data resources in this area and by discussing some promising opportunities to fill salient gaps in the literature.
    Keywords: time use, aging, demographics, paid work, unpaid work, leisure, personal care
    JEL: D13 D15 J14 J22
    Date: 2022–04
  3. By: Nicholas-James Clavet; Pierre-Carl Michaud; Réjean Hébert; Julien Navaux
    Abstract: This paper aims to estimate the future long-term care needs and expenditures in Quebec while proposing and evaluating a reform package that could deliver increased coverage as well as be more financially sustainable than current policy. This reform package consists of a shift towards more intensive use of home care while increasing public coverage of care needs. A key feature of the proposed reform is to improve the ability of users to choose their provider with the creation of a senior’s care account, an account that grants individuals in need to purchase services from several providers, including both home and institutional care. To improve the neutrality of public support across care arrangements, we also propose to increase residents’ contribution in nursing homes while favoring the continued use of existing tax credits to help seniors with lower needs in terms of care. Using detailed dynamic modelling of care needs, living arrangements, and expenditures, we estimate that long-term care needs will grow rapidly in the next two decades and the costs will quickly become prohibitive under current policy. We show that substantial cost savings may exist. To quote this document: Clavet N-J., Hébert R., Michaud P-C. et Navaux J. (2022). The future of long-term care in Quebec: what are the cost savings from a realistic shift towards more home care? (2022s-09, CIRANO). Cet article vise à estimer les besoins et les dépenses futurs en matière de soins de longue durée au Québec, tout en proposant et en évaluant un ensemble de réformes susceptibles d'offrir une couverture accrue et d'être plus viables financièrement que la politique actuelle. Cet ensemble de réformes consiste en un changement vers une utilisation plus intensive des soins à domicile tout en augmentant la couverture publique des besoins en soins. Un élément clé de la réforme proposée est d'améliorer la capacité des utilisateurs à choisir leur prestataire avec la création d'un compte de soins pour les personnes âgées, un compte qui permet aux personnes dans le besoin d'acheter des services auprès de plusieurs prestataires, y compris des soins à domicile et en institution. Pour améliorer la neutralité de l'aide publique entre les différents modes de prise en charge, nous proposons également d'augmenter la contribution des résidents dans les maisons de retraite tout en favorisant le maintien de l'utilisation des crédits d'impôt existants pour aider les personnes âgées ayant des besoins moindres en termes de soins. À l'aide d'une modélisation dynamique détaillée des besoins en soins, des modalités de vie et des dépenses, nous estimons que les besoins en soins de longue durée vont croître rapidement au cours des deux prochaines décennies et que les coûts deviendront rapidement prohibitifs dans le cadre de la politique actuelle. Nous montrons que des économies substantielles peuvent être réalisées. Pour citer ce document : Clavet N-J., Hébert R., Michaud P-C. et Navaux J. (2022). The future of long-term care in Quebec: what are the cost savings from a realistic shift towards more home care? (2022s-09, CIRANO).
    Keywords: long-term care,population aging,public finances, soins de longue durée,vieillissement démographique,finances publiques
    Date: 2022–04–25
  4. By: Eiji Yamamura; Ryohei Hayashi
    Abstract: Using Japanese professional chess (Shogi) players records in the novel setting, this paper examines how and the extent to which the emergence of technological changes influences the ageing and innate ability of players winning probability. We gathered games of professional Shogi players from 1968 to 2019. The major findings are: (1) diffusion of artificial intelligence (AI) reduces innate ability, which reduces the performance gap among same-age players; (2) players winning rates declined consistently from 20 years and as they get older; (3) AI accelerated the ageing declination of the probability of winning, which increased the performance gap among different aged players; (4) the effects of AI on the ageing declination and the probability of winning are observed for high innate skill players but not for low innate skill ones. This implies that the diffusion of AI hastens players retirement from active play, especially for those with high innate abilities. Thus, AI is a substitute for innate ability in brain-work productivity.
    Date: 2022–04
  5. By: Yang, Wei; Hu, Bo
    Abstract: OBJECTIVES: Catastrophic health expenditure (CHE) has considerable effects on household living standards, but little is known regarding the relationships between CHE and people's mental health. Using China as an example, this study examines the association between CHE and mental health and investigates whether the association differs between those with and without social health insurance (SHI). METHODS: The data came from 3 waves of the China Health and Retirement Longitudinal Study (2011, 2013, and 2015, N = 13,166). We focused on older people aged 60 and older. We built panel data regression and quantile regression models to analyze the data. RESULTS: Incurring CHE is significantly associated with poor mental health. The association is weakened among older people receiving SHI, which indicates that SHI has a protective effect. Moreover, the association between CHE and mental health and the protective effect of SHI are stronger among those with mild or moderate mental health problems. DISCUSSION: Our findings provide empirical evidence that encourages the integration of psychologically informed approaches in health services. We also urge governments in low- and middle-income countries to consider more generous health financing mechanisms for older people with greater health care needs.
    Keywords: catastrophic health expenditure; mental health; social health insurance; older people; China; OUP deal
    JEL: N0
    Date: 2022–01–01
  6. By: KRENEK Alexander; SCHRATZENSTALLER Margit; GRUNBERGER Klaus (European Commission - JRC); THIEMANN Andreas (European Commission - JRC)
    Abstract: Based on the most recent data from the ECB’s Household Finance and Consumption Survey, the project models the future household-level wealth distribution in five selected EU member countries (Finland, France, Germany, Ireland, and Italy) to derive inheritances based on different demographic and wealth projection scenarios. On this basis, various inheritance tax scenarios are simulated to estimate potential inheritance tax revenues for a projection period of 30 years. Our results indicate that multiple factors coincide in favouring a growing revenue potential for inheritance taxation in the medium-term. Wealth accumulation and appreciation lead to higher average wealth levels. The shift of the baby boomer generation out of the labour force results in an increase of the older population both in absolute and relative terms. Eventually, this will lead to a rise in the number of deaths and the number of inheritances. Additionally, low fertility rates lead to a reduction of the average number of successors and thereby decrease the importance of exemption thresholds, as individual inheritances become larger. Overall, our simulations show that the future revenue potential of inheritance taxes may be substantial. In practice, it can be expected that the theoretical revenue potential demonstrated by our simulations will be reduced by tax avoidance, real responses, and general equilibrium effects on other taxes. A review of the empirical evidence shows that behavioural responses to inheritance taxes are less pronounced compared to a net wealth tax.
    Keywords: inheritance taxation, wealth taxation, ageing, HFCS, behavioural effects
    Date: 2022–04
  7. By: Marta De Philippis (Bank of Italy); Andrea Locatelli (Bank of Italy); Giulio Papini (Bank of Italy); Roberto Torrini (Bank of Italy)
    Abstract: This paper presents a historical account of economic trends in Italy and its two macro-regions, the Centre and North and the South, since the 1950s, and outlines several growth scenarios based on recent demographic projections and alternative hypotheses on future labour market and productivity paths. We document a progressive slowdown in GDP, particularly in the South, driven by productivity and, more recently, also by employment and capital accumulation dynamics. Going forward, given the reduction in the working age population, without improvements in productivity and labour force participation, the Italian economy – the southern one in particular – is projected to shrink from the second half of the current decade. Despite the unfavourable demographic trends, robust growth rates could still be achieved if productivity grew at the same rate as in other European countries and assuming a catching-up process of between the South and the Centre and North of the country.
    Keywords: regional disparities, demographic trends, economic growth, labour market, total factor productivity
    JEL: J11 R1 O40 O52 N10 E01
    Date: 2022–04
  8. By: Gordon Anderson; Tongtong Hao
    Abstract: On the presumption that a healthier life means a longer life, the “Long and Healthy Life†component of the Human Development Index relies solely upon a nations’ estimated life expectancy as its measure of the healthiness and life length of its populace. However, the well-established health-longevity gender paradox, that compared to Males, Females experience inferior health outcomes but superior longevity, suggests that the life expectancy-based index is insufficient for the task and potentially misleading from a health policy perspective. Here new, fit-for-purpose policy focused Health Indices and Inequality measures are introduced and explored in the light of the paradox in 21st century China. China’s longevity and health experiences are consistent with the paradox and, furthermore, they are trending in different directions. The analysis reveals that much is lost by not including a health component along with longevity in the Human Development Index.
    Keywords: Health Inequality, Inequality Measurement, Healthy-Longevity Paradox
    JEL: D63 I31 I32
    Date: 2022–05–18
  9. By: Juliane Begenau; Emil Siriwardane
    Abstract: We study how investment fees vary within private-capital funds. Net-of-fee return clustering suggests that most funds have two tiers of fees, and we decompose differences across tiers into both management and performance-based fees. Managers of venture capital funds and those in high demand are less likely to use multiple fee schedules. Some investors consistently pay lower fees relative to others within their funds. Investor size, experience, and past performance explain some but not all of this effect, suggesting that unobserved traits like negotiation skill or bargaining power materially impact the fees that investors pay to access private markets.
    JEL: G11 G23 G24 H55
    Date: 2022–03

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