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on Economics of Ageing |
| By: | Richard Jaimes; Ed Westerhout; Ed Westerhout |
| Abstract: | We analyze optimal social security in a two-period overlapping generations model with endogenous retirement and demographic change. In this model, households choose to spend the second period of their lives in full retirement if the tax rate on labor income exceeds a certain threshold. We find that this threshold is increasing in life expectancy and decreasing in the fertility rate, which implies that both types of demographic change increase the relevance of the partial retirement case in which households participate on the labor market. Related, both an increase in life expectancy and a drop in fertility imply that retirement is delayed in the partial retirement case. We also show that when the government decides about the retirement age, the command optimum can be replicated through social security policies as long as the laissez-faire equilibrium features an overaccumulation of capital. When households decide about their retirement age themselves, however, replication of the command optimum is not possible, even if overaccumulation of capital applies. In both cases, it is optimal to expand social security when longevity increases and to reduce it when fertility drops. |
| Keywords: | Aging, Retirement, Optimal taxation. |
| JEL: | J11 J26 H21 |
| Date: | 2022–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:col:000416:020316&r= |
| By: | Liu, Yinan; Zai, Xianhua |
| Abstract: | The Medicaid Home and Community-Based Services (HCBS) subsidizes long-term care to satisfy the increasing desire to age at home among older adults. The HCBS program may improve health outcomes of this population by allowing them to age-in- place, but less quality and quantity of home-based care comparing to nursing home care could offset some of the potential benefits. We use plausibly exogenous policy expenditure across states over time linked with detailed health information from the restricted Health and Retirement Study (HRS) to identify the causal effects of HCBS on general health, physical health, and mental health of older adults. Overall, our findings suggest that HCBS is beneficial to health: a $1,000 increase in HCBS per older person improves health status by 6 percent, mitigates functional mobility limitations by 5 percent, and reduces negative psychological feelings by 10 percent. The positive effect on physical health is concentrated among people with limited financial resources, while the reducing impact on mental health is significant among the richer group. The HCBS program improves health outcomes mainly through three mechanisms: decreasing risk behavior on drinking, increasing healthcare use, and spending more time accompanying with family. |
| Keywords: | Medicaid HCBS,Long-Term Care,Health,Aging |
| JEL: | I12 I18 I30 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1079r&r= |
| By: | Jose Enrique Devesa Carpio (Universitat de València); Maria del Mar Devesa Carpio (Universitat de València); Inmaculada Domínguez Fabián (Universidad de Extremadura); Francisco Borja Encinas Goenechea (Universidad de Extremadura); Robert Meneu Gaya (Universitat de València) |
| Abstract: | The possible extension of the number of years for calculating the Regulatory Base of retirement pensions in Spain is one of the measures that can have the greatest impact on the contributory and sustainability of the system.The analysis carried out is based on analyzing the effect of extending the number of years from the current 25 years to 35. This extension would imply an improvement of system contributory, by increasing the relation between contribution and pension; but, also, of the financial sustainability of the system, since in global terms it would mean a decrease in the initial amount of pensions of almost 9%.However, if this extension to 35 years is accompanied by the choice of the best 25 years, then the opposite effect would occur with respect to the current situation, worsening contributivity (lower ratio between contribution and pension) and also the sustainability of the system, since the amount of the initial pension would increase by 5.6%. In this case, the most benefited would be those with the lowest contribution bases, those with short contribution careers, men, and those in the Self-Employed Regime.It has also been estimated that, in the case of choosing the best 25 years, the effect on the aggregate expenditure of the pension system in 2050 would increase by 0.57% of GDP for that year, while in terms of the Actuarial Present Value, the higher spending would take place in 2037, with 0.82% of GDP for that year. La posible ampliación del número de años para el cálculo la Base Reguladora de las pensiones de jubilación en España es una de las medidas que mayor impacto pueden tener sobre la contributividad y sostenibilidad del sistema. El análisis realizado se basa en analizar el efecto de ampliar el número de años desde los actuales 25 años hasta los 35. Esta ampliación supondría una mejora de la contributividad, al aumentar la relación entre cotización y pensión; pero, también, de la sostenibilidad financiera del sistema, puesto que en términos globales supondría una disminución de la cuantía inicial de las pensiones de casi un 9%.Sin embargo, si esta ampliación a 35 años se acompaña de la elección de los mejores 25 años, entonces se produciría el efecto contrario respecto de la situación actual, empeorando la contributividad (menor relación entre cotización y pensión) y también la sostenibilidad del sistema, ya que la cuantía de la pensión inicial aumentaría un 5,6%. En este caso los más beneficiados serían los de bases de cotización más bajas, los de carreras de cotización cortas, los hombres y los del Régimen de Autónomos.También se ha estimado que, en caso de elegir los mejores 25 años, el efecto sobre el gasto agregado del sistema de pensiones en 2050 aumentaría en un 0,57% del PIB de ese año, mientras que en términos de Valor Actual Actuarial, el mayor gasto tendría lugar en 2037, con un 0,82% del PIB de ese año. |
| Keywords: | Pensión de jubilación, Contributividad, Sostenibili-dad financiera, Base reguladora, Cálculo de la pen-sión inicial. Retirement pension, Contributivity, Financial sustain-ability, Regulatory base, Calculation of the initial pension. |
| JEL: | H55 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpivie:2022-06&r= |
| By: | Costa-Font, Joan; Vilaplana-Prieto, Cristina |
| Abstract: | We study biased survival expectations across two domains and examine whether such biased expectations influence health and financial behaviors. Combining individual-level longitudinal data, retrospective, and end of life data from several European countries for more than a decade, we estimate time-varying individual level bias in ‘survival expectations' (BSE) at the individual level and compare it biased ‘meteorological expectations' (BME). We exploit variation in an individual's family history (parental age at death) to estimate the effect of BSE on health and financial behaviors and compare it to BME, and other tests to discuss whether the effect of BSE results from the effect of private information. We find that BSE increases the probability of adopting less risky behaviors and financial behaviors. We estimate that a one standard deviation increase in BSE reduces the average probability of smoking by 48% and holding retirement accounts by 69%. In contrast, BME barely affects healthy behaviors, and is only associated with a change in some financial behaviors. |
| Keywords: | biased expectations; survival expectations; meteorological expectations; longevity optimism; private information; health behaviour; financial behaviour; Springer deal |
| JEL: | I18 D14 G22 |
| Date: | 2022–07–25 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:112709&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 les systèmes des retraite au vieillissement, cet article 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 heurterait 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. |
| Keywords: | systèmes de retraite,vieillissement,salariés,réformes,équilibre budgétaire |
| Date: | 2022–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03699935&r= |
| By: | Costa-Font, Joan (London School of Economics); D’Amico, Francesco (CEP, London School of Economics); Vilaplana-Prieto, Cristina (Universidad de Murcia) |
| 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: | caregiver's wellbeing, subjective wellbeing, long-term care subsidies, caregiving, Scotland |
| JEL: | J22 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15369&r= |
| By: | Jackie Grant; Mark Hindmarsh; Sergey E. Koposov |
| Abstract: | We present the first global analysis of the impact of the April 2022 cuts to the future pensions of members of the Universities Superannuation Scheme. For the 196,000 active members, if Consumer Price Inflation (CPI) remains at its historic average of 2.5%, the distribution of the range of cuts peaks between 30%-35%. This peak increases to 40%-45% cuts if CPI averages 3.0%. The global loss across current USS scheme members, in today's money, is calculated to be 16-18 billion GBP, with most of the 71,000 staff under the age of 40 losing between 100k-200k GBP each, for CPI averaging 2.5%-3.0%. A repeated claim made during the formal consultation by the body representing university management (Universities UK) that those earning under 40k GBP would receive a "headline" cut of 12% to their future pension is shown to be a serious underestimate for realistic CPI projections. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2206.06201&r= |
| By: | Tsendsuren Batsuuri |
| Abstract: | The success of the 2015 Paris Agreement in achieving its main temperature goal depends on its ability to increase the ambitions of individual countries to reduce their carbon emissions through effort comparison and peer pressure. Despite the empirical relevance of demographic changes in affecting factor prices, economic growth, and capital flows across countries, most comparisons of countries’carbon emissions reduction efforts are based on models that cannot capture demographic effects. Overlooking future demographic changes is problematic given the profound yet asymmetric demographic changes that countries are undergoing. This paper uses a two-country life-cycle model to show that comparing carbon emissions mitigation efforts can be misleading if countries’baseline emissions trajectories do not account for demographic dividends and spillovers from one country to another from unsynchronized demographic changes and asymmetric institutions. Through capital flows, differences in the timing, speed, and magnitude of demographic changes can reduce the emissions baseline in one country while increasing it in another country relative to the baseline with no spillovers — an effect which is amplified by differences in institutions such as pension and social security systems. Models that do not consider the effect of demographic changes and the institutions on the economy and emissions may underestimate one country’s carbon emissions reduction effort while overestimating that of another. Consequently, neglecting demographic changes when comparing countries’carbon emissions mitigation efforts can undermine the successful implementation of the Paris Agreement. |
| Keywords: | Global imbalances, Demographic transition, Carbon emissions, Lifecycle model, Energy dependent production function. |
| JEL: | E2 F32 F41 J11 J13 J14 O13 Q43 C6 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2022-42&r= |
| By: | Irene Torrini; Claudio Lucifora (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Antonio Russo |
| Abstract: | We investigate the short- and long-term e ects of hospitalization on different types of health care expenditures (HCE). A dynamic DID model with variation in treatment timing is specified and estimated using register data of individuals aged 50-70 residing in Milan, Italy, and observed over the period 2008-2017. We analyze on the entire population and carry out heterogeneous analysis by leading cause of hospitalization and presence of chronicity or disability. We find evidence of a large and persistent effect of hospitalization on total HCE, with future medical expenses mostly accounted for by inpatient care. Considering all health treatments, the overall effect is sizable, accounting for approximately twice the cost for any single hospital admission. We show that chronic and disabled individuals require greater post-discharge medical assistance especially for inpatient care and that cardiovascular and oncological diseases account together for more than half of expenditures on future hospitalizations. Alternative out-of-hospital management practices are discussed as a post-admission cost-containment measure. |
| Keywords: | Health Care Expenditures, Hospitalization E ect, Health Shocks, Chronic Disease, Cardiovascular Disease, Cancer. |
| JEL: | H51 I11 I18 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie1:def117&r= |