nep-age New Economics Papers
on Economics of Ageing
Issue of 2022‒12‒19
twelve papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. The Health-Consumption Effects of Increasing Retirement Age Late in the Game By Eve Caroli; Catherine Pollak; Muriel Roger
  2. Strengthening the social safety net in Korea By Hyunjeong Hwang; Axel Purwin; Jon Pareliussen
  3. Will China's three-child policy defuse the demographic time bomb? By Kuhn, Britta; Neusius, Thomas
  4. Improving the System of Financing Long-Term Services and Supports for Older Americans By Warshawsky, Mark; Marchand, Ross
  5. How Much Lifetime Social Security Benefits Are Americans Leaving On the Table? By David Altig; Laurence J. Kotlikoff; Victor Yifan Ye
  6. Reforming Retirement Income: Annuitization, Combination Strategies, and Required Minimum Distributions By Warshawsky, Mark
  7. Saving After Retirement By Rory McGee; Eric French; John Bailey Jones
  8. Analysis of modern organizational and information technologies in the management of professional health and professional longevity By Turzin Petr; Yashina Elena; Kovalev Sergey; Generalov Andrey; Evseev Alexandr; Lukichev Konstantin
  10. Cognitive Decline and Dynamic Selection By Michael E. Darden
  11. Why Aging Induces Deflation and Secular Stagnation By R. Anton Braun; Daisuke Ikeda
  12. Why do elderly people feel negative about the use of self-service technology and how do they cope with the negative emotions? By Nam, Jinyoung; Kim, Seongcheol

  1. By: Eve Caroli (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics); Catherine Pollak (DREES - Centre de Recherche du DREES - Ministère de l'Emploi et de la Solidarité, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Muriel Roger (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: Using the differentiated increase in retirement age across cohorts introduced by the 2010 French pension reform, we estimate the health-consumption effects of a 4-month increase in retirement age. We focus on individuals who were close to retirement age but not retired yet by the time the reform was passed. Using administrative data on individual sick-leave claims and nonhospital health-care expenses, we show that the probability of having at least one sickness absence increases for all treated groups, while the duration of sick leaves remains unchanged. Delaying retirement does not increase the probability of seeing a GP, except for men in the younger cohorts. In contrast, it raises the probability of having a visit with a specialist physician for all individuals, except men in the older cohorts. Delaying retirement also increases the probability of seeing a physiotherapist among women from the older cohorts. Overall, it increases health expense claims, in particular in the lower part of the expenditure distribution.
    Keywords: pension reform,retirement age,health,health-care consumption
    Date: 2022–10
  2. By: Hyunjeong Hwang; Axel Purwin; Jon Pareliussen
    Abstract: Social protection in Korea is designed around traditional forms of employment and excludes a substantial share of workers in non-standard employment. The resulting social protection gaps compound income inequality and undermine financial sustainability as uninsured persons rely on tax-financed benefits. Besides, Korea’s tax and benefit system discourages taking up or returning to low-paid work from social assistance or unemployment benefits. Expanding the reach of employment insurance while redesigning the tax and benefit system could boost work incentives and reduce inequality and poverty. The elderly poverty rate is persistently high, partly because public pensions and social insurance were introduced relatively recently. Better targeting the means-tested Basic Pension could reduce elderly poverty considerably. Lengthening careers is essential to ensure pension sustainability and adequate retirement income for future retirees. Shifting from a severance pay system to a corporate pension would help improve retirement income and lower employers’ incentives to push for early retirements. Reducing inequalities in access to health and long-term care will require expansion of primary care and affordable quality home-based care. This will also help address the overreliance on hospitals and cope with rising demand.
    Keywords: health and inequality, retirement policies, safety, Social security and public pensions
    JEL: H55 I13 J28 J08
    Date: 2022–11–30
  3. By: Kuhn, Britta; Neusius, Thomas
    Abstract: China is undergoing a particularly fast demographic transition. Accelerated through decades of political restrictions on family planning, the median age is rising and there is a growing share of retirees, while labour force potential is declining. Faced with dire consequences for both economic growth and wealth distribution, the government has gradually relaxed its one-child policy. Will this policy shift succeed? Our study simulates China's old-age dependency ratio and total dependency ratio until the end of the century, assuming total fertility rates between 1.0 and 2.0 with constant and increasing life expectancy. It shows that both ratios would substantially increase even in the best case. Therefore, China urgently needs reforms beyond family policy.
    Keywords: Three-child policy,total fertility rate,demographic dividend,old-age dependency ratio,total dependency ratio,pension reform
    Date: 2022
  4. By: Warshawsky, Mark; Marchand, Ross (Mercury Publication)
    Abstract: Medicaid currently pays for most of the long-term services and supports (LTSS) given to older Americans. With the aging of the population, these costs to state and federal governments will increase rapidly. We summarize the current Medicaid eligibility ru
  5. By: David Altig; Laurence J. Kotlikoff; Victor Yifan Ye
    Abstract: Americans are notoriously bad savers. Large numbers are reaching old age too poor to finance retirements that could last longer than they worked. This study uses the 2018 American Community Survey to impute retirement ages for 2019 Survey of Consumer Finance (SCF) respondents. Next, we run the SCF respondents through the Fiscal Analyzer (TFA) to measure the size and distribution of forgone lifetime Social Security benefits. TFA is a life-cycle, consumption-smoothing research tool that incorporates Social Security and all other major federal and state tax and benefit policies. The program can optimize lifetime Social Security choices. We find that virtually all American workers age 45 to 62 should wait beyond age 65 to collect. More than 90 percent should wait till age 70. Only 10.2 percent appear to do so. The median loss for this age group in the present value of household lifetime discretionary spending is $182,370. Optimizing would produce a 10.4 percent increase in typical workers’ lifetime spending. For one in four, the lifetime spending gain exceeds 17 percent. For one in ten, the gain exceeds 26 percent. Among the poorest fifth of 45 to 62 year-olds, the median lifetime spending increase is 15.9 percent, with one in four gaining more than 27.4 percent.
    JEL: H2 H5 H6
    Date: 2022–11
  6. By: Warshawsky, Mark (Mercury Publication)
    Abstract: Laddered immediate life annuity purchase and asset withdrawal combination strategies represent an excellent way for retirees to manage their retirement assets in order to get lifetime income in a flexible manner while still maintaining growth, liquidity,
  7. By: Rory McGee (University of Western Ontario); Eric French (University of Cambridge, CEPR, and IFS); John Bailey Jones (Federal Reserve Bank of Richmond)
    Abstract: Retired households, especially those with high lifetime income, decumulate their wealth very slowly, and many die leaving large estates. The three leading explanations for the ‘retirement savings puzzle†are the desire to insure against uncertain lifespans and medical expenses, the desire to leave bequests to one’s heirs, and the desire to remain in one’s own home. We discuss the empirical strategies used to differentiate these motivations, most of which go beyond wealth to exploit additional features of the data. The literature suggests that all the motivations are present, but has yet to reach a consensus about their relative importance.
    Keywords: Retirement, Savings, Wealth.
    JEL: D1 D12 D14 D15 E21 G5
    Date: 2022
  8. By: Turzin Petr (Russian Presidential Academy of National Economy and Public Administration); Yashina Elena (Russian Presidential Academy of National Economy and Public Administration); Kovalev Sergey (Russian Presidential Academy of National Economy and Public Administration); Generalov Andrey (Russian Presidential Academy of National Economy and Public Administration); Evseev Alexandr (Russian Presidential Academy of National Economy and Public Administration); Lukichev Konstantin (Russian Presidential Academy of National Economy and Public Administration)
    Abstract: At present, great importance is attached to the problem of maintaining the professional health of the working-age population and prolonging professional longevity in the world and in the Russian Federation. This problem has become especially urgent in recent years, in connection with the change in the country's retirement age.
    Keywords: professional health, professional longevity
    Date: 2021–01
  9. By: Naburi Ayub; Ametefe Frank
    Abstract: One of the primary objectives of investment policies for retirement benefits funds especially DC schemes is to maximize the returns on investments within the risk constraints and levels acceptable to the board of trustees. Investments into the real estate sector by DC schemes has been growing over the last couple of years. This study addresses three critical questions. What is the growth rate of Real Estate Portfolios owned by DC Pension Schemes? What are the returns from Real Estate Porolios owned by DC Pension Schemes? Is the growth of Real Estate Portfolios based on return on investment? Descriptive statistics will be performed on the data to summarize the variable data, therefore, facilitang its understanding. The descriptive statistics selected for this study include the mean, standard deviation, frequencies, maxima and minima. The analysis of trends in the composition of real estate portfolios in annual valuations of pension funds and annualized total returns of property portfolios will be conducted. The total annual returns consist of rental yield and capital appreciation (obtained from fair market value gain). An annualized total return is the geometric average of the amount of money earned by a portfolio each year over a given time period. The Weighted Average Annualized Property Porolio Returns from 2012 to 2021 will then be computed in order to answer the three research questions. The results will redefine the future trends in property investments by DC pension schemes and consequently the larger real estate industry given the significant role of pension schemes in the economy. This study will provide information to trustees and fund managers to guide the real estate portfolio selection and allocation in order to optimize the returns on investments in DC pension funds.
    Keywords: Allocation & Selecon; DC Pension Schemes; Real Estate Portfolio; Return on Investment
    JEL: R3
    Date: 2022–01–01
  10. By: Michael E. Darden
    Abstract: Understanding cognitive health, its decline, and the investments that shape its age profile in later life are important in an aging society, and yet, estimating the cognitive health production function is complicated by non-random mortality and sample attrition. I study this dynamic selection problem in the context of education, race, and cigarette smoking, characteristics thought to affect the level, but not slope, of cognitive decline. I develop a general framework that involves estimation of a system of dynamic equations consistent with the Grossman (1972) model. Exploiting exciting longitudinal data from the National Health and Aging Trends Study (NHATS), I find substantially wider gaps in cognitive health by these characteristics relative to cross-sectional comparisons, in some cases by 100%. Furthermore, these gaps grow in age, which suggests that the bias generated by dynamic selection is not constant. The implication of these results is that theories of cognitive decline need to accommodate differential rates of change -- rather than just differences in levels -- in cognitive health by education and race. Connecting theory and empirical work offers an important tool for economists studying health investment and health in older populations.
    JEL: I10 I12 J24
    Date: 2022–11
  11. By: R. Anton Braun; Daisuke Ikeda
    Abstract: We provide a quantitative theory of deflation and secular stagnation. In our lifecycle framework, an aging population puts persistent downward pressure on the price level, real interest rates, and output. A novel feature of our theory is that it also recognizes the reactions of government policy. The central bank responds to falling prices by reducing its policy nominal interest rate, and the fiscal authority responds by allowing the public debt–gross domestic product ratio to rise.
    Keywords: monetary policy; lifecycle; portfolio choice; secular stagnation; nominal government debt; aging; Tobin effect; fiscal policy; deflation
    JEL: E52 E62 G51 D15
    Date: 2022–09–29
  12. By: Nam, Jinyoung; Kim, Seongcheol
    Abstract: While Covid-19 has accelerated the digital transformation, increasing labour costs and 52-hour workweek rules are replacing human labor with self-service technologies (SSTs). Self-service technology is increasingly implemented and is expected to become a usual phenomenon in restaurant settings. However, the elderly who have relatively lower levels of digital literacy are being excluded from the services which can alleviate the economic and social difficulties of their daily lives. This study thus aims to explain how elderly users feel about and react to the self-service technology in fast-food restaurants. We conducted an off-site survey with individuals who have experience in using self-service technology, and we analyzed the model using the PLS-SEM method by SmartPLS 3.0. The results showed that reduction, perceived ease of use of SST, and perceived time pressure were crucial predictors of viewers' emotions toward the self-service technology. Perceived physical condition and perceived crowding, however, did not have significant effects on users' emotional responses. This study empirically investigates individuals' negative feelings toward and coping strategies for the difficulties of the SST. It highlights the necessity of collaboration among government, industry, and academia for the development of a nationwide digital inclusion policy that can address the digital divide.
    Keywords: Self-service technology,Restaurants,Elderly users,Negative emotions,Coping behavior
    Date: 2022

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