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on Economics of Ageing |
| By: | Hirokuni Iiboshi; Daisuke Ozaki |
| Abstract: | We quantitatively explore the impact of social security reforms in Japan, facing rapid aging and the highest government debt among developed countries, using an overlapping generations model with four types of agents distinguished by gender and employment type. We find that social security reforms without extending the retirement age raise the welfare of future generations, while the reforms with raising copayment rates for medical and long-term care expenditures, in particular, significantly lower the welfare of low-income groups (females and part-timers) of the current retired and working generations. In contrast, the reform reducing the pension replacement rate lead to a greater decline in the welfare of full-timers. The combination of these reforms and the extension of the retirement age is expected to improve the welfare of the current working generations by 2--9\% over the level without reforms. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2205.08042&r= |
| By: | Gal Wettstein; Robert L. Siliciano |
| Abstract: | Research has found that past generations drew down their wealth slowly in retirement, leaving much of their savings untouched throughout old age. This pattern, however, may not hold for new retirees, who are more likely to rely on a defined contribution (DC) plan than a defined benefit (DB) plan. Retirees with a DB plan had less need to draw down financial assets to cover their spending and could reserve these assets for late-life medical expenses or bequests. This project, based on a recent study, uses data from the restricted Health and Retirement Study (HRS) to examine the extent to which the slow drawdown of past generations was associated with substantial access to a DB pension. The discussion proceeds as follows. The first section describes how the pace of drawdown could be related to access to a DB plan. The second section describes the HRS data used in this project and the methodology for testing the relationship between DB coverage and drawdown speed. The third section presents the results, showing that households with a DB plan retain more of their wealth, meaning that they draw it down more slowly than those without. Specifically, retirees with $200,000 of starting wealth (roughly the sample median) and covered by a DB plan reduce their financial assets by $28,000 less by age 70 than their peers without a pension. The final section concludes that forecasts based on past patterns are likely to underestimate the drawdown speed for Baby Boomers. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2022-8&r= |
| By: | Jean-Pierre Aubry; Alicia H. Munnell; Laura D. Quinby; Glenn Springstead |
| Abstract: | Social Security is designed to serve as the base of retirement support, to be supplemented by employersponsored plans. However, some state and local government employees – approximately one-quarter, or 5 million workers annually – are not covered by Social Security on their current job. Federal law allows these noncovered workers to remain outside of Social Security if their state or local plan provides comparable benefits. This brief addresses the extent to which lifetime benefits received by noncovered workers are equal to what they would have received from Social Security alone, had they been covered. Hence, the brief compares the pensions of noncovered workers to a very low bar, leaving to later discussion the broader question of how their total retirement income compares to workers with a lifetime of Social Security and employer-provided benefits. This brief follows up on a CRR study that found that while all state and local plans currently satisfy the letter of the law, 43 percent do not provide Social Security-equivalent resources for some hypothetical new hires. Specifically, these plans shortchange workers who spend 6 to 20 years in noncovered employment before finishing their careers in a covered job. The first question addressed here is: how often do noncovered workers leave with 6 to 20 years of tenure? The second question is: do most of these medium-tenure workers start, or end, their careers in government? The discussion proceeds as follows. The first section sets the stage for the analysis by explaining why lifetime benefits for noncovered workers who stay 6-20 years fall short. The second section introduces the data and methodology used to analyze state and local tenure patterns. The third section presents the results, showing that around one-third of state and local workers – regardless of Social Security coverage or occupation – leave the government with 6 to 20 years of tenure. And around half of these medium-tenure workers finish their careers in a private (or federal) job. The final section concludes that a situation where hundreds of thousands of noncovered workers, in any given year, may not receive the basic level of Social Security protection from their pension raises concerns about their overall retirement security. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:crr:slpbrf:slp82&r= |
| By: | Geoffery T. Sazenbacher; Gal Wettstein |
| Abstract: | In recent decades, older workers have generally been working longer, which boosts prospects for a secure retirement. However, continued progress could run into headwinds in the coming years. On the supply side, some individuals may be reaching the physical limits of longer worklives. And even if workers can work longer, they must find employers willing to hire or retain them. This brief, based on a recent paper, looks ahead to 2030 and assesses how amenable the future labor market will be to older workers.1 By linking projections of future jobs to the types of jobs that are a good fit for older worker’s abilities, the analysis goes beyond simply looking at what jobs older workers do today to explore what they could do going forward. The discussion proceeds as follows. The first section provides background on trends in working longer and potential obstacles. The second section summarizes the data and methodology for the analysis. The third section reports the results. The initial analysis indicates that jobs currently employing older workers are projected to grow relatively slowly. However, for the jobs that older workers could do, the analysis finds a lack of statistically significant results, suggesting that these jobs are likely to grow at the same pace as jobs overall. The final section concludes that the jobs of the future should be able to support an aging workforce. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2022-6&r= |
| By: | Anqi Zhang; Katsushi S. Imai |
| Abstract: | This paper studies the impact of the universal pension programme on elderly poverty in both rural and urban China. Using the three rounds of panel data based on the Health and Retirement Longitudinal Study (CHARLS) in 2011-2015, we examine whether the universal pension programme reduced elderly poverty, comprehensively defined to cover both unidimensional and multidimensional poverty indices of the households and individuals. To utilise the longitudinal nature of the data, we apply the robust Fixed-Effects (FE) Model with Propensity Score Matching (PSM) and the FE Quantile Model with PSM taking into account the unobservable individual characteristics, such as entrepreneurship or risk preference. Our results show that the universal pension programme reduced poverty in monetary and non-monetary terms in both rural and urban areas. While rural people tend to continue to work in the labour market after the receipt of the pension, urban people work less due to the negative income effect of the programme. The panel quantile regression results suggest that the programme decreased the inequality in both monetary and non-monetary dimensions. Our results provide strong evidence to underscore the success of the Chinese universal pension programme in reducing poverty and inequality in both rural and urban areas. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:2203&r= |
| By: | Amin, Vikesh; Behrman, Jere R.; Fletcher, Jason M.; Flores, Carlos A.; Flores-Lagunes, Alfonso; Kohler, Hans-Peter |
| Abstract: | We revisit the much-investigated relationship between schooling and health, focusing on cognitive abilities at older ages using the Harmonized Cognition Assessment Protocol in the Health & Retirement Study. To address endogeneity concerns, we employ a nonparametric partial identification approach that provides bounds on the population average treatment effect using a monotone instrumental variable together with relatively weak monotonicity assumptions on treatment selection and response. The bounds indicate potentially large effects of increasing schooling from primary to secondary but are also consistent with small and null effects. We find evidence for a causal effect of increasing schooling from secondary to tertiary on cognition. We also replicate findings from the Health & Retirement Study using another sample of older adults from the Midlife in United States Development Study Cognition Project. |
| Keywords: | Schooling,Cognition,Bounds,Aging,Partial Identification |
| JEL: | I10 I26 J14 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1114&r= |
| By: | Jean-Pierre Aubry; Siyan Liu; Alicia H. Munnell; Laura D. Quinby; Glenn Springstead |
| Abstract: | Social Security is designed to serve as the base of retirement support, to be supplemented by employer-sponsored plans. However, approximately one-quarter of state and local government employees – currently, around 5 million workers annually – are not covered by Social Security on their current job. Federal law allows these noncovered workers to remain outside of Social Security if their state or local plan provides comparable benefits. Since many public pensions have grown less generous in recent years, determining whether state and local plans currently provide comparable benefits is important. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2022-04&r= |
| By: | Georgeta Stoica-Marcu (Universitatea Ovidius from Constanța, Romania) |
| Abstract: | The communication skills in compliance with the ethics of caring for the elderly people are a form of communication interaction based on principles, rules and basic regulations labeled by specialists. They are characterized by a focus on the relationship with the elderly people or with a group of elderly people to achieve good results. The people who take care of them participate in the communication interaction, respect the communication style and aim to obtain a result by solving the assigned tasks and reaching the established objects. The ability to lead a conversation with the elderly people competently means a correct understanding of the particularities of the personal characteristics of the elderly, their goals, objectives and interests. These can be considered determining factors for improving and increasing the quality of their life. |
| Keywords: | communication, communication skills, elderly people, ethics |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:smo:lpaper:0154&r= |
| By: | Jean-Pierre Aubry |
| Abstract: | This brief – the second of two – takes a historical view of public pension underfunding to motivate a more transparent funding policy going forward. It builds on a key finding from the first brief – that some pension funds are still burdened by unfunded liabilities accumulated before modern actuarial funding.1 This so-called “legacy debt†poses a different policy challenge than other sources of unfunded liability because it reflects the cost from an older way of managing promised retirement benefits. And, because it stems from a much earlier era, it does not fit well within the modern framework that is designed to allocate costs to the period when benefits were earned Given the challenges that legacy debt poses, this brief presents a new approach that separates the funding of legacy liabilities from other pension liabilities, while valuing liabilities in a manner more consistent with modern accounting and finance. Hopefully, the new approach provides a clearer way forward for government employers, employees, and taxpayers. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:crr:slpbrf:slp84&r= |
| By: | Jean-Pierre Aubry |
| Abstract: | State and local policymakers face increasing pressure to manage pension costs, as unfunded liabilities continue to grow relative to budgets. However, policymakers often lack a historical perspective on the root causes of pension underfunding, which is an obstacle to developing effective solutions. In 2015, the Center for Retirement Research(CRR) performed its first forensic analysis of pension funding for the Connecticut State Employees Retirement System (CT SERS) and Teachers Retirement System (CT TRS). This analysis uncovered two major contributors to underfunding. The first was a legacy debt from the period before SERS and TRS were actuarially funded – retirement benefits had been promised since the 1930s, but were not actuarially pre-funded until the 1980s. The second was inadequate contributions made by the State once it decided to pre-fund, perhaps partly motivated by the sheer size of the legacy burden and its associated amortization payments. After the CRR released its forensic study, Connecticut adopted a new method that increased the cash flow to its plans. And the State began debating options for managing the system’s legacy debt. In short, the CRR study provided actionable insights to Connecticut policymakers. The analysis for Connecticut highlighted factors that likely play a role elsewhere as well. Therefore, to support the policy debate in more locations with poorly funded plans, the CRR performed forensic analyses for retirement systems in five other states: Illinois, Massachusetts, Ohio, Pennsylvania, and Rhode Island. This brief – the first of two – summarizes the results of these forensic analyses. The discussion proceeds as follows. The first section untangles the roots of unfunded pension liabilities and explains why the legacy debt from many decades ago continues to impact the finances of plans today. The second section quantifies the size of the legacy burden. The third section discusses how this burden may have encouraged questionable policies for managing later liabilities. The final section concludes that the lack of understanding of legacy debt is hindering progress on pension funding and that moving forward requires a new framework for managing these unfunded liabilities, which will be the topic of a second brief. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:crr:slpbrf:slp83&r= |
| By: | Maddalena Ferranna; JP Sevilla; Leo Zucker; David E. Bloom |
| 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. |
| JEL: | D13 D15 J14 J22 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30030&r= |
| By: | Enriqueta Camps |
| Abstract: | This paper wants to enlarge evidence presented in the exploratory article by Camps and Engerman, "World Population Growth: The Force of Recent Historical Trends", Journal of Interdisciplinary History, 44:4, 2014. Before the worldwide epidemic impact on mortality caused by Covid 19, world population was growing at a fast track. By 2005-2010 United Nations authorities and the World Bank were regarding population growth vis-a-vis resource availability as an important economic problem in the mid run. The origin of this sort of ideas dates back at least to Malthus on population pressure, diminishing marginal returns of land, scarcity of calories and therefore increase of prices. Before the first industrial revolution only epidemics could threat population growth as to loosen pressure on economic resources. The situation in the period we want to study is very different. By the second half of the 20th century the main reason behind population growth was the great improvement of life expectancies. In OECD countries life expectancies nearly doubled during the 20th century. The overall world situation was one of convergence. All continents with the exception of Africa were improving their mortality conditions. But Camps and Engerman (2014) prove that these facts were counterbalanced in years 1960-2010 by a similar in intensity but opposite in direction trend of fertility. In all continents with the exception of Africa fertility was diminishing, converging to low levels, though with some delay with respect to mortality, causing the population explosion (demographic transition). A very significant variable when explaining fertility evolution is female's education. One year more of education of mothers led to 0,33 less children per couple. Pandemics, different marriage patterns (polygamy), poverty and a different role of children for the family economy draw a different picture in African countries. In this paper we present further quantitative evidence on the impact of population growth, using population growth as an approximate proxy of the aggregated demand evolution at the world level, on prices and output as well as the population growth projections of the twenty first century |
| Keywords: | World population growth, sustainability |
| JEL: | A11 A12 I15 J11 N3 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1842&r= |