nep-age New Economics Papers
on Economics of Ageing
Issue of 2022‒07‒25
25 papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Underfunded Public Sector Pension Plans, Social Security Participation, and the Retirement Decisions of Public Employees By Leslie E. Papke
  2. The Aging Tax on Potential Growth in Asia By Tran Quang-Thanh
  3. Public Pension Reforms and Retirement Decisions: Narrative Evidence and Aggregate Implications By Huixin Bi; Sarah Zubairy
  4. What We Talk about When We Talk about Self-employment: Examining Self-employment and the Transition to Retirement among Older Adults in the United States By Joelle Abramowitz
  5. The Age-Affect Relationship and Potential Consequences for Decision Making By Mariam Mohsin; Saman Nazir
  6. On the Distribution and Dynamics of Medical Expenditure Among the Elderly By Karolos Arapakis; Eric French; John Bailey Jones; Jeremy McCauley
  7. Women and men are equally likely to be caregivers for dependent partners, but the nature of their help differs By Léa Toulemon
  8. Mapping loss of autonomy among the elderly By Amélie Carrère
  9. The Lifetime Risk of Spousal Nursing Home Use and its Economic Impact on the Community-Dwelling Spouse By Péter Hudomiet; Michael D. Hurd; Susann Rohwedder
  10. The Role of Physical Job Demands and the Physical Work Environment in Retirement Outcomes By Italo Lopez Garcia; Kathleen J. Mullen \par
  11. The Relationship Between Adverse Experiences Over the Life Course and Early Retirement Due to Disability By Amanda Sonnega; Brooke Helppie-McFall
  12. Ageing and the long-run fiscal sustainability of health care across levels of government By Pietrangelo de Biase; Sean Dougherty; Luca Lorenzoni
  13. Caring for Carers? The Effect of Public Subsidies on the Wellbeing of Unpaid Carers By Joan Costa-i-Font; Francesco D'Amico; Cristina Vilaplana-Prieto
  14. Auto-Enrollment Retirement Plans in OregonSaves By John Chalmers; Olivia S. Mitchell; Jonathan Reuter; Mingli Zhong
  15. Who are the (dis)savers? A look at household saving patters and wealth composition in Malta By Glenn Abela; William Gatt
  16. Contextual and Social Predictors of Scam Susceptibility and Fraud Victimization By Aparajita Sur; Marguerite DeLiema; Ethan Brown
  17. Mixed-methods Study to Understand Use of the my Social Security Online Platform By Lila Rabinovich; Francisco Perez-Arce
  18. Do Workers Injured on the Job and Covered by Workers Compensation End Up on SSDI? By Daniel Ladd; David Neumark
  19. Gender and age diversity. Does it matter for firms’ productivity By Laetitia Challe; Fabrice Gilles; Yannick L'Horty; Ferhat Mihoubi
  20. Is the Adjustment of Social Security Benefits Actuarially Fair, and If So, for Whom? By Irena Dushi; Leora Friedberg; Anthony Webb
  21. The Causes and Consequences of Opioid Use among Older Americans: A Panel Survey Approach By Philip Armour; Rosanna Smart; Elliott Brennan
  22. Incorporating Health Status into Human Capital Stocks: An Analysis for the UK By Mary O'Mahony; Lea Samek
  23. Entrepreneuring after 50: the liminal identity transitions of older emergent entrepreneurs By Garcia-Lorenzo, Lucia; Sell-Trujillo, Lucia; Donnelly, Paul
  24. Heterogeneity in Household Spending and Well-being around Retirement By Patrick Moran; Martin O\rquote Connell; Cormac O\rquote Dea; Francesca Parodi
  25. Forecasting actuarial time series: a practical study of the effect of statistical pre-adjustments By Alexandros E. Milionis; Nikolaos G. Galanopoulos; Peter Hatzopoulos; Aliki Sagianou

  1. By: Leslie E. Papke (Michigan State University)
    Abstract: I analyze the effects of public pension parameters, Social Security coverage, and state pension fund sustainability on the retirement of public employees. I use data from the Health and Retirement Study, including personal early and normal retirement eligibility and state of residence. I develop a state-level measure of effective public pension plan sustainability that reflects both the degree of public plan underfunding and a state\rquote s ability to fund the plan with its own resources. Using the Public Plans Database and the Treasury Department\rquote s estimate of Total Taxable Resources, I calculate the state tax rate that, applied to a state\rquote s total taxable resources, could fund the state\rquote s unfunded actuarial accrued liability. This effective tax rate varies by Social Security status of the plan. I model retirement probability as a function of public pension eligibility, Social Security coverage in the public sector job, and effective underfunding. I find that becoming eligible for early or normal retirement, or receiving an early-out offer, significantly increases the probability of retiring beginning at age 50. Having Social Security coverage approximately doubles this probability. Public sector workers without Social Security coverage are estimated to have a lower probability of retirement at key eligibility ages. I find that the probability of retirement falls with the degree of underfunding or effective plan risk, but this effect is small compared to the response to plan features. These findings suggest that state legislative action to affect retirement decisions would be most effective operating through plan eligibility rules.
    Date: 2021–06
  2. By: Tran Quang-Thanh
    Abstract: Population aging is becoming a prominent issue in Asia, especially for developing countries where demographic changes have asserted a downward pressure on the rate of growth. This paper refers to such potential unwanted effects as an "aging tax" and analytically examines them from a neoclassical perspective, using a Diamond-type overlapping generations model with endogenous retirement, survival rate, and old worker productivity. Based on this setup, negative impacts exist if too many old workers that are sufficiently unproductive choose to defer retirement under the aging pressure, which drains resources from future generations. Numerical simulations show that an aging tax can reduce the potential per capita growth rate (technologyadjusted) by up to 0.12 percentage points annually for some countries in Asia. Our results highlight that countries with sufficiently large labor shares (due to a high ratio of self-employment or a manual labor-centric production) and inadequate educational attainment are potentially the most sensitive and vulnerable to population aging.
    Date: 2022–03
  3. By: Huixin Bi; Sarah Zubairy
    Abstract: We construct a database of public pension policy changes with motivation and implementation information for ten OECD countries. Structural pension reforms, motivated by long-run sustainability concerns, often come with prolonged phase-in periods. In response to pension retrenchments implemented immediately, people close to retirement stay in the work force longer. News about future pension retrenchments with implementation lags, however, is likely to lead this group to exit the labor market. This decline in the labor force participation rate is particularly strong for reforms with long lags, ones that introduce fundamental policy changes, and where citizens have lower trust in the government.
    JEL: E62 H30 H55
    Date: 2022–06
  4. By: Joelle Abramowitz (University of Michigan)
    Abstract: The fraction of workers who are self-employed increases with age, but the types of self-employment that older workers do and the effects of this work on their well-being is not well understood. This project examines such heterogeneity by considering how differing investment and managerial responsibilities in self-employment contribute to disparities in characteristics and measures of economic, physical, and mental well-being. The paper first uses internal narrative descriptions of industry and occupation in the 1994 to 2018 Health and Retirement Study and machine learning methods to classify self-employment reports into a useful framework of self-employment roles. The project then uses these roles to examine self-employment heterogeneity and finds substantial differences in demographic characteristics, work characteristics, income, benefits, quality of life, and retirement expectations across self-employment roles. Further work finds distinctive patterns in role changes with the transition to retirement such that large shares of workers in all roles transition into independent self-employment at the time of retirement. Work linking to administrative records suggests substantial discrepancies, which vary across roles, between survey responses and administrative records and finds the most prominent discrepancies for post-retirement independent self-employment. The paper\rquote s findings motivate future research exploring the work trajectories leading to these roles and their consequences on financial, physical, and mental well-being into retirement.
    Date: 2021–09
  5. By: Mariam Mohsin (Pakistan Institute of Development Economics); Saman Nazir (Pakistan Institute of Development Economics)
    Abstract: This paper studies age and aging as potential variables of interest in applied psychology and management science. The paper is divided into two analytical parts. The first part discusses aging in relation to emotional control processes and potential implications and tries to explain how older adults deal with negativity and loss while regulating well-being. The second part discusses the literature that deals with outcome variables, such as performance and underlying determinants of performance like motivation and arousal and their potential relationship with aging.
    Keywords: Age, Aging, Emotional Regulation Gerontology
    Date: 2022
  6. By: Karolos Arapakis (University College London); Eric French (University of Cambridge, University College London and Institute for Fiscal Studies); John Bailey Jones (Federal Reserve Bank of Richmond); Jeremy McCauley (University of Bristol)
    Abstract: Using data from the Health and Retirement Study linked to administrative Medicare and Medicaid records along with the Medical Expenditure Panel Survey, we estimate the stochastic process for total and out-of-pocket medical spending. By focusing on dynamics, we consider not only the risk of catastrophic expenses in a single year, but also the risk of moderate but persistent expenses that accumulate into a catastrophic lifetime cost. We assess the reduction in out-of-pocket medical spending risk provided by public insurance schemes such as Medicare or Medicaid. We find that although Medicare and Medicaid pay the majority of medical expenses, households at age 65 will incur, on average, $59,000 in out-of-pocket costs with 10% of households incurring more than $121,000 in out-of-pocket expenses over their remaining lives.
    Date: 2021–11
  7. By: Léa Toulemon (IPP - Institut des politiques publiques)
    Abstract: Respecting their wishes as to where they should be cared for, elderly people who are losing their autonomy are encouraged to remain at home, but in doing so a large part of the burden of care is implicitly placed upon their family and friends. When the elderly lose their independence, the people who live with them, especially their partners, are the first to be called upon to provide day-to-day assistance. Using detailed data on the difficulties faced by older people in their daily lives and the tasks performed by their caregivers in their homes, we examine the influence of gender on the likelihood of helping a dependent partner, as well as the type of tasks performed.
    Date: 2021–10
  8. By: Amélie Carrère (IPP - Institut des politiques publiques, INED - Institut national d'études démographiques)
    Abstract: Understanding the differences in loss of autonomy between French departments is essential since they are the leading providers of social services to the elderly. For the first time, thanks to the combination of several data sources, it is possible to obtain a snapshot of the care needs of the elderly in each French department. This study sheds light on the differences in care that can be observed between departments from the perspective of the needs of their citizens, and can help to orient local policies to meet these needs. Unlike previous studies on the subject, it is not restricted to the population receiving benefits related to loss of autonomy (Abassi et al., 2020), it includes both the at-home and institutionalized populations (Brunel and Carrère, 2017), and it compares several measures of disability (Larbi and Roy, 2019). Moreover, it allows us to question the implications of departmental policy via two channels: (1) the way departments mobilize the criteria for assessing loss of autonomy; and (2) the supply of institutional places and the residential mobilities that may induce.
    Date: 2022–01
  9. By: Péter Hudomiet (RAND); Michael D. Hurd (RAND, NBER, NETSPAR); Susann Rohwedder (RAND, NETSPAR)
    Abstract: A single person in a nursing home is relatively well-protected financially from nursing home expenses because Medicaid covers these once assets are depleted. Couples, however, are less well protected, because the high cost of nursing homes rapidly depletes household assets, possibly impoverishing the spouse living in the community, despite Medicaid provisions that shield spousal assets up to some threshold. In this paper, we estimate the lifetime risk that one spouse will reside in the community while the other resides in a nursing home, and the distribution of the accumulated number of days spent in a nursing home and costs. We use data from the longitudinal Health and Retirement Study and follow individuals and their spouses from age 70 to death. We also examine how spousal nursing home use affects families\rquote financial outcomes and to what extent Social Security income protects the community-residing spouse from the adverse effects of spousal nursing home use. We find that a 70- to 74-year-old married person who lives in the community faces a 34.3% chance that his or her spouse would move to a nursing home before death. When they do, spouses spend about nine months, on average, in nursing homes, and the average out-of-pocket cost is about $19,800 (2019 dollars). We find that spousal nursing home use significantly decreases households\rquote assets and increases the risk of further impoverishment. While Social Security income has an overall positive impact on families\rquote financial outcomes, it does not mitigate the financial effects of spousal nursing home use.
    Date: 2021–10
  10. By: Italo Lopez Garcia (RAND Corporation); Kathleen J. Mullen \par (RAND CorporationAuthor-Name:Jeffrey Wenger; RAND Corporation)
    Abstract: We provide new evidence on the role of physical job demands and the physical work environment on retirement outcomes by linking occupation-level data on job requirements from the Occupational Requirements Survey (ORS) to individual-level data from the Health and Retirement Study (HRS). Using alternative strategies to address missing data, and after examining the concurrent validity of ORS job requirements with analogous measures from the Occupational Information Network (O*NET), we create a composite index of physical job demands comprising strenuous physical activities (e.g., lifting and strength) and a composite index of physical work environment comprising hazardous or taxing environmental conditions (e.g. noise, heat). We use these validated indices to estimate associations between job demands and retirement outcomes controlling for observed individual and household characteristics. We find that a one standard deviation increase in our index of physical jobs demands is associated with a 10 percentage point increase in the probability of being retired at any age and a 1.8 percentage point increase in the probability of transitioning into full retirement from full-time work. The same size increase in our physical work environment index is associated with a 7 percentage point increase in the probability of being retired, but it does not provide additional explanatory variation for transitions into retirement. These effects are almost entirely concentrated in men, who hold jobs that are significantly more physically demanding than women\rquote s, and they are also larger among older and less-educated workers.
    Date: 2021–11
  11. By: Amanda Sonnega (University of Michigan); Brooke Helppie-McFall (University of Michigan)
    Abstract: A growing body of research implicates life span adversity in later-life outcomes. We use data from the Life History Mail Survey (LHMS) with data from the Health and Retirement Study (HRS) core surveys to examine the relationship between adverse experiences over the life course and retirement due to disability. We employ 31 measures of childhood and adulthood adversities in both the financial and social domains. We create three measures of retirement due to disability based on survey responses to questions about health as a reason for retiring and the extent to which health limits work ability. For each measure of early retirement due to disability, we perform competing risk survival analysis modeling these outcomes relative to continued work or retirement for any other reason. We conduct these analyses in four samples depending on the component of the survey the data from which the data derived, with the sample including LHMS information being the most restricted but including the greatest number of adversities. Cumulative life adversity was associated with all outcomes examined, including the most conservative specification of disability retirement (i.e., retirement in the context of a health problem that completely limits work) and across all samples. We also found that childhood financial adversity and adult social adversity were most consistently associated with an increased hazard of retirement due to disability in our analysis, which balances the greatest number of adversities with a reasonably large sample (Sample 3).
    Date: 2021–10
  12. By: Pietrangelo de Biase; Sean Dougherty; Luca Lorenzoni
    Abstract: OECD economies are undergoing a seemingly inevitable process of population ageing that has been changing income and consumption patterns. Notably, the demand for health services is expected to increase, while labour forces are projected to shrink. Both factors are projected to negatively impact the sustainability of health systems – the former through an increase in government expenditures on health and the latter through a decrease in government revenues. As health systems and their funding streams tend to be at least partially decentralised in most OECD countries, this fiscal pressure is expected to be asymmetric across levels of government. The objective of this paper is to provide order-of-magnitude estimates of the possible effects of population ageing on government finances across OECD countries, and to discuss reforms to fiscal federalism and intergovernmental relations with the purpose of funding expenditures at all levels of government.
    Keywords: demographics, fiscal federalism, intergovernmental relations, revenue bouyancy, tax policy
    JEL: H51 H71 J11
    Date: 2022–06–30
  13. By: Joan Costa-i-Font; Francesco D'Amico; Cristina Vilaplana-Prieto
    Abstract: We study the effect of long-term care (LTC) subsidies and supports on the wellbeing of unpaid caregivers. We draw on evidence from a policy intervention, that universalized previously means-tested caregiving supports in Scotland, known as free personal care (FPC). We document causal evidence of an increase in the well-being (happiness) of unpaid carers after the introduction of FPC. Our estimates suggest economically relevant improvements in the happiness (12pp increase in subjective wellbeing) among caregivers exposed to FPC and that provide at least 35 hours of care per week. Consistently, these results are larger among women and non-actively employed caregivers (17pp increase in happiness). Estimates are not driven by selection into caregiving (we find similar wellbeing effects among caregivers at baseline and caregivers throughout the sample), and are driven by income effects of FPC among caregivers.
    Keywords: caregiving, long-term care subsidies, subjective wellbeing, caregiver’s wellbeing, Scotland
    JEL: I18 J22
    Date: 2022
  14. By: John Chalmers (University of Oregon); Olivia S. Mitchell (University of Pennsylvania); Jonathan Reuter (Boston College); Mingli Zhong (Urban Institute)
    Abstract: Oregon recently launched an automatic-enrollment retirement savings program for private sector workers lacking access to other workplace retirement plans. We analyze participation choices, account balances, and inflow/outflow data using administrative records between August 2018 and April 2020. Within the small- to mid-sized firms served by OregonSaves, estimated average after-tax earnings are low ($2,365 per month) and turnover rates are high (38.2% per year). Younger employees and employees in larger firms have been less likely to opt out of the OregonSaves program, but participation rates fall over time. The most common reason given for opting out is \ldblquote I can\rquote t afford to save at this time,\rdblquote but the second most common is \ldblquote I have my own retirement plan.\rdblquote As of April 2020, 67,731 accounts had positive account balances, holding $51.1 million in total assets. The average balance was $754, but with considerable dispersion; younger workers accumulated the fewest assets due to higher job turnover. Overall, we conclude that OregonSaves has meaningfully increased employee savings by reducing search costs. The 34.3% of workers with positive account balances in April 2020 is comparable to the marginal increase in participation at larger firms in the private sector. Employees opting out of OregonSaves are often doing so for rational reasons.
    Date: 2021–09
  15. By: Glenn Abela; William Gatt
    Abstract: In this note we build on recent findings on household saving patterns in Malta by utilising two large-scale surveys: the Household Budgetary Survey (HBS) and the Household Finance and Consumption Survey (HFCS). We show that saving rates correlate strongly with income and age, and that a significant share of households which dissave tend to report positive saving in a self-assessment question of one of the surveys. Under-reporting of income, financial illiteracy and cognitive errors and biases may be behind this finding. A significant share of dissavers tend to be old-age and low-income households, which may have difficulty meeting unanticipated expenses unless they can draw from a buffer of wealth. Households are heterogeneous in their wealth holdings, and while several dissavers can fall back on a buffer of wealth, a lot of this wealth is tied up in illiquid assets. Furthermore, we show that some of the old dissavers do not have a sufficiently large pot of liquid savings to finance their current dissaving patterns over the rest of their life. These findings are of policy relevance especially when assessing the ability of retired households to meet an unanticipated expense. Home equity release schemes can free up wealth held in property, while emphasis on pension plans for younger households can prevent this situation for future retirees.
    JEL: C21 D14 D31 G11
  16. By: Aparajita Sur (University of Minnesota); Marguerite DeLiema (University of Minnesota); Ethan Brown (University of Minnesota)
    Abstract: Financial fraud targeting older adults is on the rise, with annual losses totaling in the billions of dollars. Prior cross-sectional and qualitative studies have reported that negative life events and social factors, such as poor psychological well-being and loneliness, are significant correlates of fraud, yet there is little research using longitudinal data to show that these social factors and life events precede (versus follow) victimization experiences, and no studies that examine the impact of modifying social variables on the risk of fraud and reducing scam susceptibility. In this study, we use repeated measures from the Rush Memory and Aging Project (MAP) decision making substudy to assess how negative life events and trajectories in social support, well-being, and loneliness affect susceptibility to scams and fraud victimization over the course of the study. Experiencing negative life events was not associated with the risk of self-reported fraud victimization, although negative life events were statistically significantly associated with greater scam susceptibility in unadjusted models. Using a causal inference analysis that simulates the impact of a social support intervention on the risk of fraud over time revealed that higher consistent social support increases the average probability of reporting fraud victimization over the study, contrary to study hypotheses. Although the magnitude of effects are small, consistent interventions that maximize psychological well-being and minimize loneliness significantly reduce average scam susceptibility. Effects are stronger for older adults who are divorced, widowed, or never married relative to those who are married or partnered.
    Date: 2021–09
  17. By: Lila Rabinovich (University of Southern California); Francisco Perez-Arce (University of Southern California)
    Abstract: We conducted a mixed-methods study to examine barriers to use of my Social Security (MySSA), and users\rquote experience of using MySSA. The quantitative phase of the study leveraged existing survey data to analyze the determinants of self-reported MySSA account use. For the qualitative phase, we interviewed 24 individuals about their views and experiences with online transactions generally and with Social Security specifically, and their perceptions of the MySSA platform as they navigated it during the interview. The quantitative analysis suggests that internet literacy and, more generally, educational levels are barriers to MySSA use. Current SSA beneficiaries and older respondents were significantly more likely to be aware of, have an account, and use MySSA. From the qualitative results, we learn that there are four key reasons for not creating a MySSA account: (1) lack of awareness of MySSA; (2) no perceived relevance/need; (3) security and privacy concerns; and (4) low internet/computer literacy. We also observe that, overall, users perceive the MySSA platform to be clear, navigable, and relevant. Nonretired, nonbeneficiary participants found the information on the platform to be particularly instructive and useful. Our findings suggest that for younger people especially, MySSA could be a potentially useful financial and retirement preparedness tool. We find that a key challenge to MySSA use is getting people to create an account in the first place and not their retention once they create an account. Further research may be warranted to address the barriers to using MySSA, increasing engagement with the platform, and realizing its potential as a key resource for retirement readiness.
    Date: 2021–09
  18. By: Daniel Ladd (University of California-Irvine); David Neumark (University of California-Irvine)
    Abstract: We use data from the Health and Retirement Study (HRS) and matched Social Security Administration (SSA) data to study two questions. First, we examine evidence on whether workers who suffer permanently disabling injuries covered by workers\rquote compensation (WC) subsequently end up on Social Security Disability Insurance (SSDI). Second, under some conditions, SSDI benefits are supposed to be reduced for workers receiving WC benefits (\ldblquote offsets\rdblquote ). Offsets are most relevant for workers with WC-compensable, permanently disabling injuries. Our analysis captures data on WC benefit receipt from the HRS and links it to SSA data on WC and SSDI recipients. We find that SSA appears to be missing data on WC benefits for a sizable share of WC-benefit recipients, and that the frequency of SSDI benefit reduction because of the WC offset seems surprisingly low.
    Date: 2021–09
  19. By: Laetitia Challe; Fabrice Gilles; Yannick L'Horty; Ferhat Mihoubi
    Date: 2022
  20. By: Irena Dushi (U.S. Social Security Administration); Leora Friedberg (University of Virginia); Anthony Webb (New School for Social Research)
    Abstract: Disparities in Social Security claim ages have risen since the early 1990s. With high earners increasingly likely to delay claiming, and also living longer on average than lower earners, late claimants may differ in critical ways from early claimants. Using Social Security Administration data and focusing on men, we find that late claimants have lower mortality than those who claim at age 62, so late claimants are adversely selected. As a result of selective claiming combined with improvements in actuarial adjustments, the return to delaying claiming has become systematically positive for those who actually delay, but not for those who claim early. We further find that selective claiming increases benefits by more for those with higher lifetime earnings because their return to delay exceeds actuarially fair amounts by larger margins. Lastly, we find that selective claiming has a modest effect on total payouts, but a more consequential effect on inequality in lifetime benefit payouts. In the aggregate, the increase in Trust Fund payouts as a result of adverse selection in claiming was 0.5% for the most recent retiring cohorts. Yet, lifetime benefit payouts are 1.9% higher for those in the highest quartile of lifetime earnings as a result of claim-age differences, compared to what payouts would be if they had the same claim ages as those in the lowest quartile, and this contributes 2.8% to the difference in expected lifetime benefits between the highest and lowest quartiles.
    Date: 2021–09
  21. By: Philip Armour (RAND Corporation); Rosanna Smart (RAND Corporation); Elliott Brennan (RAND Corporation)
    Abstract: This study examines the effects of prescription opioid analgesic use for older Americans, specifically with regard to work disability and disability program participation. We draw on the long-panel structure of the Health and Retirement Study and a newly available 2009 survey module measuring prescription drug use and initiation. We pursue regression-adjustment and nearest neighbor matching approaches, using rich 2008 HRS measures on health, disability, sociodemographic characteristics, and economic status, to account for selection into prescription opioid use, since supply-side instruments used in the opioid literature have little relevance to opioid use for this population in 2009. Pre-2008 comparisons between individuals with 2009 opioid prescriptions and controls demonstrate face validity of the analytic approach; we then estimate opioid use effects on mortality, self-reported health, labor force participation, work-limiting health conditions, and disability program participation, spanning from 2010 to 2018. We find substantial and significant mortality effects starting in 2010; in estimating effects on other outcomes, we account for differential attrition through mortality via inverse probability reweighting. Our findings are significant, both statistically and economically: up through 2018, individuals with 2009 opioid prescriptions were nearly 40% more likely to develop a health condition that limited their ability to work than those without a prescription. This difference in work disability led to substantial differences in disability program participation: those using opioids were nearly 300% more likely to apply for or receive Social Security disability benefits by 2018.
    Date: 2021–03
  22. By: Mary O'Mahony; Lea Samek
    Abstract: This study examines the impact of morbidity on human capital stocks (HCS) with an application to the UK from 1996 to 2018. It incorporates health status into the standard Jorgenson-Fraumeni lifetime earnings measure of HCS through its effect on absenteeism and presenteeism (lost productivity) by taking account of inactivity due to illness and modelling the impact of health on earnings and retirement behaviour. It employs the approach of estimating individual health indices, which reduce concerns for reporting and errors-in-variable bias, and takes account of individuals' and spouses' health as well as caring responsibilities due to adverse health of third parties. The results show that overall poor health leads to a reduction in HCS by about 12 per cent in 2018, but shows a slight tendency to decrease over time, mostly driven by trends in inactivity due to long-term illness, and retirements for those aged over 50. There are significant impacts of poor health on earnings, especially for males, but the results show only a small impact on HCS from earnings as most people in poor health are not economically active. The results vary by qualification level, gender and age, with productive HCS reduced by about 45 per cent for individuals aged 50 years or older with low qualifications.
    Keywords: health status, human capital, lifetime earnings
    JEL: I10 I26 O15
    Date: 2021–03
  23. By: Garcia-Lorenzo, Lucia; Sell-Trujillo, Lucia; Donnelly, Paul
    Abstract: Entrepreneurship has been proposed as a solution to extending working lives. However, little is known about how older (50+) entrepreneurs manage their personal transitions into entrepreneurship. In this paper, we propose to use a liminal identity work perspective to explore the identity paradoxes that older entrepreneurs experience during their transition into entrepreneurship and how they manage it. We use a qualitative study conducted over 14 months in the United Kingdom. Our analysis shows how older entrepreneurs confront identity paradoxes, interruptions and identity polarization in their attempts to shift from older identities and activity patterns into new ones. The entrepreneurs who manage to overcome the identity interruptions and polarization that the transition brings move away from an initial sense of isolation and bring creative understandings to older entrepreneuring processes. Our results expand current understanding of entrepreneurial identity work in liminal conditions, especially among older entrepreneurs, by looking at the tensions emerging between potentially new and customary identities and behaviours as an important aspect of entrepreneuring transitions rather than as negative frictions to be avoided.
    Keywords: employment transitions; identity work; liminality; narratives; older entrepreneurs
    JEL: R14 J01
    Date: 2020–11–24
  24. By: Patrick Moran (University of Copenhagen, Center for Economic Behavior and Inequality and IFS); Martin O\rquote Connell (University of Wisconsin-Madison and IFS); Cormac O\rquote Dea (Yale University, IFS and NBER); Francesca Parodi (Collegio Carlo Alberto, University of Turin, IFS, and CEPR)
    Abstract: We study heterogeneity in spending patterns around the time of retirement. Using rich consumption data from the Panel Study of Income Dynamics, and exploiting within-household spending variation, we systematically classify households into groups characterized by differences in consumption transitions at retirement. We decompose the overall spending changes into the contribution made by different subcomponents of consumption. We find that the households that increase their spending shift budget away from food and toward transportation, recreation, and trips. In contrast, those households for which spending falls reduce the budget share spent on transportation and food away from home, while increasing the share allocated to food at home and housing expenditures. Using a life-cycle model, we characterize the mechanisms capable of driving these observed patterns.
    Date: 2021–09
  25. By: Alexandros E. Milionis (Bank of Greece and University of the Aegean); Nikolaos G. Galanopoulos (University of the Aegean); Peter Hatzopoulos (University of the Aegean); Aliki Sagianou (University of the Aegean)
    Abstract: One of the most important risks in the actuarial industry is the longevity risk. The accurate prediction of mortality rates plays a crucial role in the management of the aforementioned risk. Such predictions are performed by modelling the mortality rates using mortality models. Aiming at possible improvements in such forecasts, in this work we examine the effect of data transformation and “linearization†on the quality of time series forecasts of mortality rate data. By the term time series “linearization†is meant the treatment of causes that disrupt the underlying stochastic process measured by a time series. The dataset consists of the time series of the period indices uncovering the mortality trend for England-Wales according to published mortality models. Results indicate a clear improvement in interval forecasts. However, the result on point forecasts is not as clear as is the case of interval forecasts. The documented improvement in interval forecasts can significantly affect the Solvency Capital Requirement, and subsequently the Solvency Ratio for a pension fund. Such an improvement might put some pension providers at a competitive advantage as they have less capital locked in their liabilities. In addition, it was confirmed that the transformed-linearized time series of mortality rates satisfy to a higher extent the need for normality as compared to the original series.
    Keywords: Time series transformation and ‘’linearization’’; Outliers; Actuarial time series forecasts; Mortality rates; Covid-19
    JEL: C22 C51 C53 C87 G22
    Date: 2022–05

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