|
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:safewp:362&r=age |
| By: | Lucas Goodman; Anita Mukherjee; Shanthi Ramnath |
| Abstract: | Retirement savings abandonment is a rising concern connected to defined contribution systems and default enrollment. We use tax data on Individual Retirement Accounts (IRAs) to establish that for a recent cohort, 0.4% of retirement-age individuals abandoned an aggregate of $66 million, proxied by a failure to claim over ten years after a legal requirement to do so. Analysis of state unclaimed property databases suggests that workplace defined contribution plans are abandoned at a higher rate than IRAs. Finally, regression discontinuity estimates show that certain accounts created by default enrollment are at higher risk of abandonment by passive savers. |
| Keywords: | escheatment; defaults; retirement savings |
| JEL: | D83 H24 H31 J32 J14 J63 |
| Date: | 2022–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:95081&r=age |
| By: | Owen Davis (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | The Covid-19 pandemic upended labor markets and prompted a sharp increase in the share of U.S. adults who are retired. This paper uses Current Population Survey data to explore the distribution and determinants of employment and retirement among older workers during the pandemic. Employment declines among older workers were greatest for low-earning, non-white, and non-college-educated workers. By contrast, increased transitions to retirement occurred more evenly across demographic groups and concentrated in both the lowest- and highest-earning quartiles. Job characteristics that best predicted increased pandemic retirement transitions were employment in high-contact occupations and part-time work schedules. I estimate that part-time workers made up roughly 70% of the increase in net year-to-year employment-to-retirement transitions during the first year of the pandemic. This finding has implications for recent Social Security claiming behavior and for the possible persistence of the pandemic retirement boom. |
| Keywords: | older workers, retirement, labor supply, Covid-19 |
| JEL: | E24 I14 J62 J38 E21 J83 J32 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2021-06&r=age |
| By: | Wang, Xize (National University of Singapore) |
| Abstract: | By 2030, one in every five Americans will be 65 or older. To better serve the mobility needs of a rapidly aging population, a better understanding of older adults' driving behavior is needed. This study explores the impact of health on driving reduction for America's older adults, using a nationwide, longitudinal dataset from the Health and Retirement Study (HRS). I propose two outcome variables: having driven in the past month, and having driven beyond nearby places; and measure health using overall self-rated health status and specific sensory, mobility and physical conditions. Controlling for socio-demographics, residential patterns, personal fixed effects, time fixed effects, and regional fixed effects, I find that older adults with lower self-rated health were less likely to drive or drive beyond nearby places. The magnitudes of such effects vary by race but not by gender. I also identify specific health conditions that could predict driving reduction. The findings imply that in the near future, there will be a large number of older adults suffering from unmet travel demands due to declining health conditions. Hence, planners and policy makers should be proactive in seeking for solutions, including using my findings to identify at-risk older drivers and provide various types of mobility assistance. |
| Date: | 2022–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:h5scf&r=age |
| By: | Irena Dushi; Leora Friedberg; Anthony Webb (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| 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. |
| Keywords: | older workers, social security, benefits, downward mobility, poverty, unemployment, wages, involuntary retirement, retirement, 401k, Medicare, Older Workers Bureau, disparities, inequality, income inequality |
| JEL: | E24 J30 J38 J60 J88 J58 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2021-04&r=age |
| By: | Goecke, Oskar |
| Abstract: | Using historical capital market data for Germany (1950-2022) we analyze and compare (individual) defined contribution (IDC-) and collective defined contribution (CDC) pension plans. To this end we define simple asset liability management rules that govern a CDC pension plan and compare these to IDC-plans with the same asset allovation. Our main result is, that the CDC pension plans allow for a significant improvement of the risk return profile compared to individual pension plans. Hereby we consider different risk measures. This empirical study affirms the theoretical results based on stochastic CDC-models. |
| JEL: | G G2 G20 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:thkivw:42022&r=age |
| By: | Costa-Font, Joan; Vilaplana-Prieto, Cristina |
| 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 J61 R31 |
| Date: | 2022–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117189&r=age |
| By: | Vlandas, Tim (University of Oxford) |
| Abstract: | Democracies have experienced profound population ageing in the last decades. Yet we still know little about the political consequences of ageing for economic performance. This article develops a novel theoretical framework linking ageing to lower economic growth through two mechanisms: first, grey power pushes elected governments to expand consumption policies thereby ‘crowding out’ investments; second, ageing populations weaken the electoral penalty for lower growth performance leading to ‘economic unaccountability’. Using microdata from four cross-national survey of preferences and vote choices, I show that elderly individuals care more about pensions, but less about education, and they are less likely to penalize governments for low growth. Using macrodata on 21 advanced economies since the 1960s, OLS and instrumental variable regressions provide evidence that ageing leads to more spending on consumption policies but less on social investment policies, and lower growth. Ageing countries may paradoxically become economically inefficient because they are politically efficient. |
| Date: | 2022–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:d3ybr&r=age |
| By: | Breidenbach, Philipp; Jäger, Philipp; Taruttis, Lisa |
| Abstract: | Exploiting regional heterogeneity in population dynamics across more than 10,000 municipalities in Germany, we provide robust empirical evidence that population aging depresses real estate prices and rents. Using millions of individual real estate offers and detailed demographic data on the municipality level, we estimate that average sales prices in 2020 would have been up to 12% higher, if the population age distribution had been the same as in 2008. We show that population aging does not only reduce prices but also increases the availability of real estate. Moreover, we document substantial heterogeneity in price responses by dwelling type, real estate characteristics and urban-rural status which suggest that a lower demand for living space and live-cycle dissaving are driving our results. We predict that population aging will continue to put downward pressure on real estate prices and exacerbate regional disparities in Germany. |
| Keywords: | Real estate prices,population aging,Germany |
| JEL: | J11 R21 R31 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:953&r=age |
| By: | Federico Comes (Department of Economics, University of Verona); Martina Menon (Department of Economics, University of Verona); Federico Perali (Department of Economics, University of Verona) |
| Abstract: | In times of pandemic, according to the survey on the living conditions of the elderly and the quality of their relationships recently conducted by the research group of the REDESIGN project, the economic aspects have been significantly influenced especially for the elderly who live alone, objectively more exposed to the risks of the health emergency. From this point of view, the Italian welfare, which prefers the protection of the elderly, seems to have effectively mitigated the economic impact regardless of income and region of residence, but has shown limits in preventing and treating the intangible aspects related to the non-cognitive, affective and relational sphere of the great elderly, especially for the most fragile and lonely. In general, the willingness to pay is associated both with the need for relationships and with the ability to give, for example, on the part of those who are more sociable or place more trust in others, regardless of financial possibilities. The decision on how much to donate seems instead dominated by purely economic variables. The study estimated that the average level of willingness to pay of the elderly for social networks is 94 euros. This could generate potential funding of around €365 million that Italian communities can mobilise. As a lesson for the future, it will be important to understand how communities and philanthropic institutions of financial intermediation, such as community foundations, can foster the development of autonomous networks to improve the quality of life of the elderly and, at the same time, create the conditions to improve the prevention of situations at high risk to health. |
| Keywords: | Willingness to pay, elderly people, loneliness, social network |
| JEL: | I31 I14 D1 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:awm:wpaper:12&r=age |
| By: | THIVILLON, Thomas |
| Abstract: | Women carry a disproportionate share of the burden of informal caregiving to functionally dependent relatives such as old age individuals. In developing economies, this burden tends to fall on the shoulders of female adolescents in particular for cultural and economic reasons. This paper uses original panel data from Senegal to evaluate the effect of co-residence with elderly individuals on the educational attainment of female children. To identify this effect, I exploit the deaths of elderly co-residents which occur during the study period in an empirical strategy which relies on triple-differences with child fixed-effects. I show that an event of elderly death is associated with 23% additional education completed over a period of 4 years by affected girls. I present evidence that changes in demand for informal caregiving within the household are one of the mechanisms at play. These results call for increased attention to specific forms of domestic child labor in public policies in order to reduce gender inequalities in education. |
| Date: | 2022–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:m8k6b&r=age |
| By: | Lin, Zhuoer; Ba, Fang; Allore, Heather; Liu, Gordon G.; Chen, Xi |
| Abstract: | Dementia leads public health issue worldwide. China has the largest population of adults living with dementia in the world, imposing increasing burdens on the public health and healthcare systems. Despite improved access to health services, inadequate and uneven dementia management remains common. We document the provincial-level geographic patterns in healthcare utilization, outcomes, and costs for patients hospitalized for dementia in China. Regional patterns demonstrate gaps in equity and efficiency of dementia care and management for dementia patients. Health policy and practices should consider geographic disparities in disease burden and healthcare provision to promote equitable allocation of resources for dementia care throughout China. |
| Keywords: | Dementia,Health Care,Hospitalization,Inpatient Costs,In-hospital Mortality,Geographic Variation |
| JEL: | J14 I11 I14 I18 H75 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1193&r=age |
| By: | Bergeron-Boucher, Marie-Pier; Kjærgaard, Søren |
| Abstract: | Mortality forecasts by age and cause of death are important for more efficient spending on, for example, health care and medical technology. However, there is a reluctance in including the cause of death dimension to the forecast, as forecasts by cause are confronted with many methodological problems. While some of these problems have been addressed in the last two decades, an important remaining issue with forecasts by cause is their inconsistence with all- causes forecasts. This problem relates to how changes in mortality by age and cause interact. So how can we forecast this relation in a coherent manner? To address this problem, we use a model framework based on a Compositional Data Analysis (CoDA) approach which models 1) age and cause simultaneously; 2) cause-of-death distribution within each age group and 3) age-at-death distribution within each cause. We specify multiple models within each of the three frameworks to obtain a better understanding of the age and cause interactions. The results show that forecasting cause-of-death distribution within each age group generally provides the most accurate forecasts and allows for the forecast by cause and for all-cause to be consistent with one another. |
| Date: | 2022–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:d7hbp&r=age |
| By: | Goldstein, Joshua R.; Osborne, Maria; Atherwood, Serge; Breen, Casey |
| Abstract: | New advances in data linkage provide mortality researchers with access to administrative datasets with millions of mortality records and rich demographic covariates. Although these new datasets allow for high-resolution mortality research, administrative mortality records often have technical limitations, such as limited mortality coverage windows and incomplete observation of survivors. We describe a method for fitting truncated distributions that can be used for estimating mortality differentials in administrative data. We apply this method to the CenSoc datasets, which link U.S. 1940 Census records to Social Security administrative mortality records. Our approach may be useful in other contexts where administrative data on deaths are available. As a companion to the paper, we release the R package gompertztrunc, which implements the methods introduced in this paper. |
| Date: | 2022–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:efdzh&r=age |