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on Economics of Ageing |
| By: | Bellés Obrero, Cristina (University of Mannheim); Jimenez-Martin, Sergi (Universitat Pompeu Fabra); Ye, Han (University of Mannheim) |
| Abstract: | This paper sheds new light on the mortality effect of delaying retirement by investigating the impacts of the 1967 Spanish pension reform. This reform exogenously changed the early retirement age, depending on the date individuals started contributing to the Social Security system. Those contributing before 1 January 1967 maintained the right to voluntarily retire early (at age 60), while individuals who started contributing after that date could not voluntarily claim a pension until the age of 65. Using the Spanish administrative Social Security data, we find that the reform delayed the individuals' labour market exit by around half a year and increased the probability that individuals take up disability pensions, partial pensions, and no pensions. We show evidence that delaying exiting employment increases the hazard of dying between the ages of 60 and 69, for almost all individuals. Heterogeneous analysis indicates that the increase in mortality is stronger for those employed in low-skilled, physically and psychosocially demanding jobs. Moreover, we show that allowing for flexible retirement schemes, such as partial retirement, mitigates the detrimental effect of delaying retirement on mortality. |
| Keywords: | delaying retirement, mortality, heterogeneity, flexible retirement |
| JEL: | I10 I12 J14 J26 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15577&r= |
| By: | Camilla Skovbo Christensen (University of Copenhagen, Center for Economic Behavior and Inequality); Bastian Emil Ellegaard (University of Copenhagen, Department of Economics) |
| Abstract: | We exploit exogenous variation from a pension reform in Denmark to estimate the e ect of tax subsidies on total private saving. We present new evidence on individuals in the middle of the income distribution and show that a reduction in tax subsidies for retirement saving reduces total private saving. The reform changed the tax incentives for saving in the pension scheme that holds the highest tax advantage for middle-income workers in Denmark. We find that for each unit of reduced saving in this pension scheme, only 63 percent is substituted to other types of saving. |
| Keywords: | Crowd-out, Savings, Retirement, Tax incentives, Household Finance |
| JEL: | H24 H31 D14 G51 |
| Date: | 2022–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2217&r= |
| By: | S. Kirusheva; H. Huang; T. S. Salisbury |
| Abstract: | In this paper we consider the problem of optimizing lifetime consumption under a habit formation model. Our work differs from previous results, because we incorporate mortality and pension income. Lifetime utility of consumption makes the problem time inhomogeneous, because of the effect of ageing. Considering habit formation means increasing the dimension of the stochastic control problem, because one must track smoothed-consumption using an additional variable, habit $\bar c$. Including exogenous pension income $\pi$ means that we cannot rely on a kind of scaling transformation to reduce the dimension of the problem as in earlier work, therefore we solve it numerically, using a finite difference scheme. We also explore how consumption changes over time based on habit if the retiree follows the optimal strategy. Finally, we answer the question of whether it is reasonable to annuitize wealth at the time of retirement or not by varying parameters, such as asset allocation $\theta$ and the smoothing factor $\eta$. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.06255&r= |
| By: | Masaki KUSANO |
| Abstract: | In Japan, the current pension accounting standard requires firms to recognize pension items— prior service costs and actuarial gains and losses—in consolidated financial statements; however, firms are still allowed to disclose them in the notes when preparing unconsolidated financial statements. Employing this unique pension accounting rule, I explore whether and how disclosed versus recognized pension liabilities influence managerial discretion regarding pension assumptions. Recognition firms, those that recognize the previously disclosed pension items on the balance sheet, choose higher discount rates than disclosure firms, those that still disclose them in their notes. In particular, in case of more debt- contracting incentives, recognition firms are more likely to exercise their discretion over discount rates than disclosure firms. Overall, my results suggest that firms underestimate pension liabilities by using pension assumptions when pension recognition rules are mandated. |
| Keywords: | Recognition versus Disclosure, Managerial Discretion, Pension Accounting, Discount Rate |
| JEL: | M41 M48 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-22-008&r= |
| By: | De Brouwer, Octave (Free University of Brussels); Tojerow, Ilan (Free University of Brussels) |
| Abstract: | Over the last two decades, most OECD countries have reformed their social security in order to make early departures from the labor market increasingly difficult. Despite the fiscal gains that are expected from these reforms, it is likely that these gains from longer careers will be partly offset by increasing expenses on other social security programs. This article sheds light on this issue by ex-ploring the consequences of postponing access to an old-age unemployment program from age 58 to 60. The program provides laid-off workers with a combination of unemployment benefits and a monthly supplement paid by the employer until the full retirement age. Exploiting a rich set of administrative data, we study the effect of this reform on workers' employment and various social security benefits (i.e. unemployment, disability, early retirement and compensated working time reductions), using a triple difference method as identification strategy. Our results show that, for men, the reform had a positive effect on employment, with a small positive effect on a program called Time-Credit, i.e., a social security program that facilitates working time reductions at the end of the career. For women, we find no significant effect on employment but instead a large spillover effect on unemployment. We find that gender differences in job characteristics can help to explain this difference, since women are more likely to work in part-time, low-wage and blue-collar occupations than men, and no significant employment effects are found for these groups of workers. |
| Keywords: | disability, old-age unemployment, early retirement, senior employment |
| JEL: | J26 J65 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15628&r= |
| By: | Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Maryna Tverdostup (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Europe will be challenged by demographic changes over the next few decades, even under favourable assumptions about fertility and migration, but the economic effects are not yet fully understood. This paper studies the effects of population ageing on economic growth, capital deepening and robotisation in 27 European Union (EU) labour markets. First, we econometrically assess the effects of ageing and potential labour market shortages on growth. Second, we test the hypothesis of whether ageing leads to faster adoption of new technologies. We distinguish between various capital asset types, including non-ICT and ICT capital, tangible and intangible capital and the adoption of robots. The analysis is based on Eurostat, the European Labour Force Survey (EU-LFS) and International Federation of Robotics (IFR) data. Results indicate that ageing and demographic changes might contribute to secular stagnation, which decelerates the adoption of new technologies. |
| Keywords: | aging, growth, capital accumulation, new technologies, secular stagnation |
| JEL: | J11 O33 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:222&r= |
| By: | Iris Kesternich (KU Leuven and University of Hamburg); Bettina Siflinger (Tilburg University); James P. Smith (Rose Li and Associates); Franziska Valder (University of Copenhagen, Center of Economic Behavior and Inequality) |
| Abstract: | Behavior in labor and marriage markets follows similar structures when it comes to commitment to long-term relationships. We argue that there is a joint social skill driving stability in both markets. Applying a grouped fixed-effect estimator on data from the Survey of Health, Ageing and Retirement in Europe, we identify types of individuals at risk of instability in both domains. We provide evidence on how economic preferences and personality are related to instability in both markets. We also show negative consequences of instability in terms of reduced life satisfaction and wealth late in life. |
| Keywords: | Relationship Stability, Marriage dissolution, Job turnover, Social Skills, Non-Cognitive Skills, Grouped Fixed-E ect Estimator, Survey of Health, Ageing and Retirement in Europe |
| JEL: | J12 J24 J63 I31 C33 |
| Date: | 2022–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2220&r= |
| By: | Demombynes,Gabriel; De Walque,Damien B. C. M.; Gubbins,Paul Michael; Urdinola,Beatriz Piedad; Veillard,Jeremy Henri Maurice |
| Abstract: | Using official COVID-19 death counts for 64 countries and excess death estimates for 41countries, this paper finds a higher share of pandemic-related deaths in 2020 were at younger ages inmiddle-income countries compared to high-income countries. People under age 65 constituted on average (1) 11 percent ofboth official deaths and excess deaths in high-income countries, (2) 40 percent of official deaths and 37 percentof excess deaths in upper-middle-income countries, and (3) 54 percent of official deaths in lower-middle-incomecountries. These contrasting profiles are due only in part to differences in population age structure. Both COVID-19and excess death age-mortality curves are flatter in countries with lower incomes. This is a result of somecombination of variation in age patterns of infection rates and infection fatality rates. In countries with very lowdeath rates, excess mortality is substantially negative at older ages, suggesting that pandemic-related precautionshave lowered non-COVID-19 deaths. Additionally, the United States has a younger distribution of deaths than countrieswith similar levels of income. |
| Keywords: | Law and Justice Institutions,Health Care Services Industry,Communicable Diseases,Leprosy,Cholera,Public Health Promotion |
| Date: | 2021–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9807&r= |
| By: | Costa-Font, Joan (London School of Economics); Vilaplana-Prieto, Cristina (Universidad de Murcia) |
| Abstract: | Individual preferences for 'ageing in place' (AIP) in old age are not well understood. One way to test the strength of AIP preference is to investigate the effect of health shocks on residential mobility to smaller size or value dwellings, which we refer to as 'housing downsizing'. This paper exploits more than a decade worth of longitudinal data to study older people's housing decisions across a wide range of European countries. We estimate the effect of health shocks on the probability of different proxies for housing downsizing (residential mobility, differences in home value, home value to wealth ratio), considering the potential endogeneity of the health shock to examine the persistence of AIP preferences. Our findings suggest that consistently with the AIP hypothesis, every decade of life, the likelihood of downsizing decreases by two percentage points (pp). However, the experience of a health shock partially reverts such culturally embedded preference for AIP by a non- negligible magnitude on residential mobility (9pp increase after the onset of a degenerative illness, 9.3pp for other mental disorders and 6.5pp for ADL), home value to wealth ratio and the new dwelling's size (0.6 and 1.2 fewer rooms after the onset of a degenerative illness or a mental disorder). Such estimates are larger in northern and central European countries. |
| Keywords: | ageing in place, housing downsizing, health shocks at old age, Europe, residential mobility, mental degenerative mental illness, mental disorder |
| JEL: | I18 G51 J61 R31 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15636&r= |
| By: | Xavier Flawinne (Université de Liège); Mathieu Lefebvre (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Sergio Perelman (Université de Liège); Pierre Pestieau (Université de Liège, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Jérôme Schoenmaeckers (Université de Liège, CIRIEC-Belgium) |
| Abstract: | The current health crisis has particularly affected the elderly population. Nursing homes have unfortunately experienced a relatively large number of deaths. On the basis of this observation and working with European data (from SHARE), we want to check whether nursing homes were lending themselves to excess mortality even before the pandemic. Controlling for a number of important characteristics of the elderly population in and outside nursing homes, we conjecture that the difference in mortality between those two samples is to be attributed to the way nursing homes are designed and organized. Using matching methods, we observe excess mortality in Sweden, Belgium, Germany, Switzerland, Czech Republic and Estonia but not in the Netherlands, Denmark, Austria, France, Luxembourg, Italy and Spain. This raises the question of the organization and management of these nursing homes, but also of their design and financing. |
| Keywords: | mortality,nursing homes,propensity score matching,SHARE |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:pseptp:hal-03807685&r= |
| By: | Albert, Jose Ramon G.; Monje, Jennifer D.; Muñoz, Mika S. |
| Abstract: | Since 2011, the government, through the Department of Social Welfare and Development (DSWD), has been implementing the Social Pension (SocPen) Program for Indigent Senior Citizens. SocPen gives a noncontributory monthly pension of PHP 500 to qualified seniors (i.e., indigent Filipinos aged 60 and above). Budget allocation for the SocPen has increased exponentially over the years with a budget of PHP 23.4 billion in 2021 (from an initial budget of PHP 8.71 billion at program inception). With this 2,540-percent jump in budget within 10 years, the 2021 physical target has also expanded to help 3,835,066 senior citizens identified by the Listahanan. The 2020 physical target for SocPen is nearly two-fifths (37.8%) of the country’s senior citizens. This study describes SocPen’s design and current implementation processes in the wake of the coronavirus disease 2019 pandemic and attempts to increase beneficiaries' financial assistance and coverage. It also investigates the recent experience of DSWD with the Social Amelioration Program. While the program is well-intentioned and welcomed by seniors, and despite the improvements taken in response to criticisms of several external evaluations, implementation deficits persist. These issues need to be addressed, especially as the SocPen is one of the government’s largest social protection programs and can potentially impact the lives of elderly indigent beneficiaries significantly. |
| Keywords: | process evaluation;senior citizens;indigent;SocPen;vulnerable population;social protection |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:phd:rpseri:rps_2022-05&r= |
| By: | Pronkina, Elizaveta (Université Paris-Dauphine); Rees, Daniel I. (Universidad Carlos III de Madrid) |
| Abstract: | Although COVID-19 vaccines are safe and effective, many adults are hesitant or unwilling to use them. Drawing on data from the Survey of Health, Ageing and Retirement in Europe (SHARE) Corona survey, we examine the correlates of vaccine uptake among Europeans ages 50 and older. We find that self-reported trust and risk aversion are good predictors of COVID-19 vaccine uptake. By contrast, there is little evidence that either excess mortality during the pandemic or official case counts influenced whether SHARE Corona respondents were vaccinated against COVID-19. |
| Keywords: | vaccination, COVID-19, flu, SHARE |
| JEL: | I12 I18 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15625&r= |
| By: | Salvanes, Kjell G. (Norwegian School of Economics); Willage, Barton (University of Colorado Denver); Willén, Alexander (Norwegian School of Economics) |
| Abstract: | Adverse economic shocks occur frequently and may cause individuals to reevaluate key life decisions in ways that have lasting consequences for themselves and the economy. These life decisions are fundamentally tied to specific periods of an individual's career, and economic shocks may therefore have substantially different impacts on individuals - and the broader economy - depending on when they occur. We exploit mass layoffs and establishment closures to examine the impact of adverse shocks across the life cycle on labor market outcomes and major life decisions: human capital investment, mobility, family structure, and retirement. Our results reveal substantial heterogeneity on labor market effects and life decisions in response to economic shocks across the life cycle. Individuals at the beginning of their careers invest in human capital and relocate to new labor markets, individuals in the middle of their careers reduce fertility and adjust family formation decisions, and individuals at the end of their careers permanently exit the workforce and retire. As a consequence of the differential interactions between economic shocks and life decisions, the very long-term career implications of labor shocks vary considerably depending on when the shock occurs. We conclude that effects of adverse labor shocks are both more varied and more extensive than has previously been recognized, and that focusing on average effects among workers across the life cycle misses a great deal. |
| Keywords: | labor supply, human capital, education, fertility, family formation, mobility, retirement, disability, economic shocks, job displacement |
| JEL: | I20 J63 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15634&r= |
| By: | Hainaut, Donatien (Université catholique de Louvain, LIDAM/ISBA, Belgium) |
| Abstract: | This article proposes a continuous time mortality model based on calendar years. Mortality rates belong to a mean reverting random field indexed by time and age. In order to explain the improvement of life expectancies, the reversion level of mortality rates is the product of a deterministic function of age and of a decreasing jump-diffusion process driving the evolution of longevity. We provide a general closed-form expression for survival probabilities and develop it when the mean reversion level of mortality rates is proportional to a Gompertz-Makeham law. We develop an econometric estimation method and validate the model on the Belgian population. |
| Keywords: | Mortality rates ; longevity ; survival probabilities |
| Date: | 2022–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:aiz:louvad:2022019&r= |
| By: | Hamid Noghanibehambari; Jason Fletcher |
| Abstract: | Intensive agriculture and deep plowing resulted in top-soil erosion and dust storms during the 1930s. These effects have been shown to affect agricultural income and land values that persisted for years. Given the growing literature on the relevance of in-utero and early-life exposures, it is surprising that studies focusing on links between the Dust Bowl and later-life health find inconclusive and mixed results. This paper re-evaluates this literature and studies the long-term effects of in-utero and early-life exposure to top-soil erosion caused by the Dust Bowl of the 1930s on old-age longevity. Specifically, we employ Social Security Administration death records linked with the full-count 1940 census and implement event studies and difference-in-difference designs to compare the longevity of individuals in high/medium versus low top-soil erosion counties post-1930 versus pre-1930. We find intent-to-treat reductions in longevity of about 0.9 months for those born in high erosion counties post-1930. We show that these effects are not an artifact of preexisting trends in longevity. Additional analyses suggest the effects are more pronounced among children raised in farm households, females, and those with lower maternal education. We also provide suggestive evidence that reductions in adulthood income are a likely mechanism channel. |
| JEL: | I12 I15 J0 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30531&r= |
| By: | Mavromaras, Kostas (University of Adelaide); Isherwood, Linda (University of Adelaide); Mahuteau, Stephane (University of Adelaide); Ratcliffe, Julie (Flinders University); Xiao, Lily (Flinders University); Harrington, Ann (Flinders University); Wei, Zhang (University of Adelaide) |
| Abstract: | Using a Discrete Choice Experiment we estimate the relative value attached by workers on core job attributes identified by previous qualitative research on the Aged Care workforce in Australia: salary (hourly); work hours; training/skill development; staffing numbers; processes for managing work-related stress; and freedom in the job. In this mostly part- time employed workforce, the opportunity for more workhours is welcome, but relatively less important. Nurses (enrolled and more so registered, being typically better-paid and higher-qualified) value pay rises less and training opportunities more than their (typically lower-paid and lower-qualified) care worker counterparts. Casual/temporary workers prefer workplaces that are adequately staffed relatively more than their permanently employed counterparts. In the context of increasing demand for more and for better-quality Aged Care services, the paper's overall findings can inform the current multi-faceted debate about a sustainable way for the Aged Care sector to attract, retain and utilize its workforce. |
| Keywords: | aged care workforce, discrete choice experiments, job attributes, job preferences |
| JEL: | J14 J21 J39 C25 I19 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15623&r= |
| By: | Sébastien Dambrine (CEPN - Centre d'Economie de l'Université Paris Nord - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord) |
| Abstract: | Cette étude a pour but de comprendre les facteurs pouvant expliquer les variations de recours à l'aide humaine chez les personnes âgées de 75 ans et plus. Afin d'avoir un regard éclairé sur la question de la dépendance liée à l'âge, nous considérons importante l'étude statistique des différents déterminants du recours à l'aide humaine. Cette étude se situe dans un esprit de compréhension des mécanismes qui pourraient entrainer une prédisposition à la dépendance. Nous pourrons, ainsi apporter un regard éclairé sur les éventuelles lacunes du système de financement de la dépendance et ainsi proposer des pistes d'amélioration. Nous situerons notre recherche à l'échelle départementale selon une double contrainte de disponibilité des données, mais également d'un nombre d'observations suffisantes pour la robustesse des conclusions. Notre recherche se concentre sur une partie de la population susceptible d'être en situation de dépendance liée à l'âge. Pour faire cette distinction nous utiliserons les résultats de l'enquête Vie Quotidienne et Santé et nous intéresserons à la population qui déclare recevoir de l'aide dans les actes de la vie quotidienne. Tout d'abord nous allons nous intéresser à la notion de dépendance et en particulier les critères permettant de définir une personne comme dépendante. Nous rechercherons ensuite les différentes modalités de prise en charge qu'elles soient collectives ou individuelles ainsi que leurs modes de financement. |
| Date: | 2022–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cepnwp:hal-03798818&r= |