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on Economics of Ageing |
| By: | Bucher-Koenen, Tabea; Hackethal, Andreas; Kasinger, Johannes; Laudenbach, Christine |
| Abstract: | Financial literacy affects wealth accumulation, and pension planning plays a key role in this relationship. In a large field experiment, we employ a digital pension aggregation tool to confront a treatment group with a simplified overview of their current pension claims across all pillars of the pension system. We combine survey and administrative bank data to measure the effects on actual saving behavior. Access to the tool decreases pension uncertainty for treated individuals. Average savings increase|especially for the financially less literate. We conclude that simplification of pension information can potentially reduce disparities in pension planning and savings behavior. |
| Keywords: | saving behavior,retirement planning,digital planning tool |
| JEL: | D14 G11 G51 G53 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:22037&r=age |
| 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 Touzé (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:spmain:hal-03699935&r=age |
| By: | Joan Costa-i-Font; Cristina Vilaplana-Prieto |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10022&r=age |
| By: | Simplice A. Asongu (Yaounde, Cameroon); Beatrice D. Simo-Kengne (Johannesburg, South Africa) |
| Abstract: | This study explores the effect of various demographic features on wealth share using yearly data for 43 countries. Empirical results from quantile regressions indicate that besides macroeconomic and institutional factors, population ageing and the high size of working population exhibit some mitigating effects on wealth inequality at lower quantiles and the opposite effect at high quantiles. Whereas at the quantile above 75, rising share of working age population, population growth and high fertility rate may help contribute to wealth share equalisation. These finding implies that efficient redistribution strategies depend not only on the level of development but also on the stage of the demographic transition. Accordingly, improving access to education and decent jobs can help fight inequality in relatively young population context while labour market adjustment through government effectiveness could lead to wealth inequality reduction in relatively old population context. |
| Keywords: | Population; Demographic Change; Wealth Inequality |
| JEL: | C32 J14 I32 O15 O40 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:22/085&r=age |
| By: | Devine, Kenneth (Central Bank of Ireland) |
| Abstract: | Demographic dynamics and the shift of population pyramids towards an inverted pyramid shape in advanced economies are leading to relative scarcity of labour and excess savings. What are the effects of these dynamics on the relative wealth accumulation journeys of different cohorts? Within a fixed-effect cross country panel framework, I find that savings by an increasing share of households aged between 45 and 65, a rise in retired over-65s, and a decrease in working-age and low-wealth agents in their twenties and thirties can explain most of the decline in rates of return across countries in the last few decades, and similarly a large part of the increase in wages. In this context and looking to the future, wealth accumulation out of income and capital returns by cohorts living in advanced economies and retiring in future decades is set to become increasingly difficult, as higher wages are not sufficient to compensate for lower returns over long periods of time. Current young and future generations are therefore set to face progressively lower standards of living at retirement and/or increasingly high saving ratios in working age. |
| Keywords: | Demographics, Rates of return, Inter-generational inequality, Wealth. |
| JEL: | E21 E25 J11 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:wpaper:6/rt/22&r=age |
| By: | Coen van de Kraats (Erasmus University, Tinbergen Institute); Titus Galama (University of Southern California); Maarten Lindeboom (Vrije Universiteit, Centre for Health Economics, Monash University, Tinbergen University, IZA) |
| Abstract: | We provide evidence that the social norm (expectation) of work has a detrimental causal effect on the mental well-being of individuals not able to abide by it. Using SHARE data on men aged 50+ from 10 European countries, we identify the social norm of work effect in a difference-in-differences (DiD) model that compares mental well-being scores of unemployed/disabled individuals (the treatment group) with those of employed / retired individuals (the control group) at varying levels of the fraction of retirees of comparable age. The initial mental well-being gap at age 50 is large, with unemployed / disabled men experiencing lower levels of mental well-being. Beyond age 50, the mental well-being of unemployed and disabled men improves as peers of comparable age retire, and full convergence occurs generally at an age that is slightly above the normal retirement age, when everyone has retired. We estimate the social norm of work effect to be comparable to the benefit of tertiary education, the detriment of being widowed, and the benefit of having a household income of 2,000,000 Euros. We explore income-security and leisure-coordination channels as alternative interpretations of the effect to show that these cannot explain our findings. |
| Keywords: | mental well-being, social norm of work, retirement institutions |
| JEL: | I10 I31 J60 D63 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2022-040&r=age |
| By: | Zsófia L. Bárány (CEU - Central European University [Budapest, Hongrie], CEPR - Center for Economic Policy Research - CEPR); Nicolas Coeurdacier (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Stéphane Guibaud (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We investigate the importance of worldwide demographic evolutions in shaping capital flows across countries. Our lifecycle model incorporates crosscountry differences in fertility and longevity as well as differences in countries' ability to borrow inter-temporally and across generations through social security. In this environment, global aging triggers uphill capital flows from emerging to advanced economies, while country-specific demographic evolutions reallocate capital towards countries aging more slowly. Our quantitative multi-country overlapping generations model explains a large fraction of long-term capital flows across advanced and emerging countries. |
| Keywords: | Aging,Household Saving,International Capital Flows |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03803869&r=age |
| By: | Andrew Caplin; Eungik Lee; Søren Leth-Petersen; Johan Sæverud |
| Abstract: | Despite its centrality in monetary policy, communication is not a focus in social security reform. We investigate the potential for active communication to dissipate apparently widespread public confusion about the future of social security. We implement a simple information treatment in which we randomly provide survey respondents access to the longevity-based eligibility age implemented by reform that Denmark launched in 2006. Absent treatment, younger workers not only have biased beliefs, expecting to become eligible for social security earlier than policy makers intend, but also are highly uncertain about eligibility age. The information treatment eliminates the bias, suggesting it results from misunderstanding. Yet it has no influence on uncertainty, suggesting this is driven by unavoidable demographic and political uncertainties. Our results highlight the value of communication strategies and belief measurement as policy instruments outside the monetary policy arena. |
| JEL: | H55 |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30645&r=age |
| By: | Bergeron-Boucher, Marie-Pier; Vázquez-Castillo, Paola; Missov, Trifon |
| Abstract: | Recent studies have shown that there are some advantages in forecasting mortality with other indicators than death rates. In particular, the age-at-death distribution provides readily available information on central longevity measures: mean, median and mode, as well as information on lifespan variation. The modal age at death has been increasing linearly since the second half of the 20th century, providing a strong basis to extrapolate past trends. We develop a model to forecast the age-at-death distribution that directly forecasts the modal age at death and lifespan variation while accounting for dependence between ages. We forecast mortality at age 40 and above in six Western European countries. The introduced model increases forecast accuracy compared with other forecasting models and provides consistent trends in life expectancy and lifespan variation at age 40 over time. |
| Date: | 2022–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:5zr2k&r=age |
| By: | Virat Agrawal; Neeraj Sood; Christopher M. Whaley |
| Abstract: | A long-standing economic question is how protection against harm from insurance or other harm reducing interventions leads to potentially offsetting behavior changes (ex-ante moral hazard). Immunization is a type of insurance, as individuals incur an upfront cost when they get vaccinated, but it protects individuals if they are exposed to a vaccine preventable disease. In this study, we empirically evaluate the ex-ante moral hazard effects of COVID-19 vaccines. First, exploiting the discontinuity in vaccination rates at age 65 due to early eligibility of older population, we compared vaccination rates and risk mitigation behavior between those just above and just below 65 years of age. We find no evidence of decrease in risk mitigating behavior among the 65 years old and older population. Second, leveraging state-level variation in the timing of when people in different age groups became eligible for vaccination, we estimate that COVID-19 vaccination has no effect on risk mitigating behaviors in adult population. Our findings imply minimal moral hazard effects of COVID-19 vaccines in the short-term. |
| JEL: | I1 I12 I13 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30602&r=age |
| 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 Touzé (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 le système des retraites au vieillissement, ce Policy brief revient sur le champ des possibles. De ce point de vue, l'Europe offre des pratiques diversifiées... |
| Keywords: | systèmes de retraite,vieillissement,régime universel |
| Date: | 2021–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03555287&r=age |
| By: | Giovanni Gallipoli; Hamish Low; Aruni Mitra |
| Abstract: | We characterize the joint evolution of cross-sectional inequality in earnings, other sources of income and consumption across generations in the U.S. To account for cross-sectional dispersion, we estimate a model of intergenerational persistence and separately identify the influences of parental factors and of idiosyncratic life-cycle components. We find evidence of family persistence in earnings, consumption and saving behaviours, and marital sorting patterns. However, the quantitative contribution of idiosyncratic heterogeneity to cross-sectional inequality is significantly larger than parental effects. Our estimates imply that intergenerational persistence is not high enough to induce further large increases in inequality over time and across generations. |
| Date: | 2022–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:985&r=age |
| By: | James, Amity; Crowe, Adam; Tually, Selina; Sharam, Andrea; Faulkner, Debbie; Cebulla, Andreas; Hodgson, Helen; Webb, Eileen; Coram, Veronica; Singh, Ranjodh |
| Abstract: | This research investigates lower income older households’ preferences for a range of alternative housing models and examines which of these would best meet their needs, as well as identifying ways to support households deciding their housing options. The findings of this project provide key evidence for consideration in developing a market for alternative housing options. Seven alternative housing models were presented to a nationally representative sample of older people. These composite models—each with a unique combination of tenure, construction, location, social composition, shared space and technology characteristics—included a mixed use apartment building option; a cooperative housing option; a communal housing option; a transportable home option; a shared equity home ownership option; a dual key property option; and a village-style housing option. The shared equity home ownership model; cooperative housing model; and transportable home model were substantially preferred by lower income housed older Australians. All three alternative housing models met the short and long-term housing needs of the respondents and would also deliver benefits in terms of people’s non-shelter aspirations for home including independence, privacy, security of tenure, ability to have companion animals, and room for friends, family or a carer to stay. Survey respondents expressed a strong liking for rights of ownership (84%)—through the dual key housing option and the shared equity housing option—and a long lease option (83%). Housing options that included other tenure arrangements, such as shared governance and management (59%) and land owned and retained by government (68%), were considered less desirable. |
| Date: | 2022–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:2t6xs&r=age |
| By: | Jason Fletcher; Hans G. Schwarz; Michal Engelman; Norman Johnson; Jahn Hakes; Alberto Palloni |
| Abstract: | A rich literature shows that early life conditions shape later life outcomes, including health and migration events. However, analyses of geographic disparities in mortality outcomes focus almost exclusively on contemporaneously measured geographic place (e.g., state of residence at death), thereby potentially conflating the role of early life conditions, migration patterns, and effects of destinations. We use the newly available Mortality Disparities in American Communities (MDAC) dataset, which links respondents in the 2008 ACS to official death records and estimate consequential differences by method of aggregation; the mean absolute deviation of the difference in life expectancy at age 50 measured by state of birth versus state of residence is 0.58 (0.50) years for men and 0.40 (0.29) years for women. These differences are also spatially clustered, and we show that regional inequality in life expectancy is higher based on life expectancies by state of birth, implying that interstate migration mitigates baseline geographical inequality in mortality outcomes. Finally, we assess how state-specific features of in-migration, out-migration, and non-migration together shape measures of mortality disparities by state (of residence), further demonstrating the difficulty of clearly interpreting these widely used measures. |
| JEL: | I14 J0 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30572&r=age |