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on Economics of Ageing |
| By: | Lausen, Jens; Horneff, Vanya; Maurer, Raimond; Mitchell, Olivia S. |
| Abstract: | Many nations incentivize retirement saving by letting workers defer taxes on pension contributions, imposing them when retirees withdraw their funds. Using a dynamic life cycle model, we show how 'Rothification' - that is, taxing 401(k) contributions rather than payouts - alters saving, investment, consumption, and Social Security claiming patterns. We find that taxing pension contributions instead of withdrawals leads to delayed retirement, somewhat lower lifetime tax payments, and relatively small reductions in consumption. Indeed, the two tax regimes generate quite similar relative inequality metrics: the relative consumption inequality ratio under TEE is only four percent higher than in the EET case. Moreover, results indicate that the Gini measures are also strikingly similar under the EET and the TEE regimes for lifetime consumption, cash on hand, and 401(k) assets, differing by only 1-4 percent. While tax payments are higher early in life under the TEE regime, they are slightly lower in the long run. Moreover, higher EET tax payments are also accompanied by higher volatility. We therefore find few reasons for policymakers to favor either tax approach on egalitarian or revenue-enhancing grounds. |
| Keywords: | pensions,taxes,401(k) plan,retirement,Social Security claiming,inequality |
| JEL: | C63 D14 G51 H31 H55 J26 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:368&r=age |
| By: | András Simonovits (Centre for Economic and Regional Studies, BME MI) |
| Abstract: | Studying the age-dimension of the probability distribution of pensions while assuming steadily rising real wages and time-invariant benefit-rules, two factors play important roles: (i) the weight of the wages in indexation of benefits in progress; (ii) the longevity gap. Factor (i) acts against relative depreciation of older benefits, while factor (ii) raises the share of higher benefits among older cohorts. Using an example and a model we show how the shape of the average benefit--age-curve depends on the relation between these two factors. |
| Keywords: | public pension system, longevity gap, indexation of pensions in progress, age-specific pensions |
| JEL: | H55 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2217&r=age |
| By: | Williams, Gemma A.; Cylus, Jonathan; Al Tayara, Lynn; Roubal, Tomáš; Tsilaajav, Tsolmongerel; Barber, Sarah L. |
| Abstract: | Background: Population ageing will accelerate rapidly in Mongolia in the coming decades. We explore whether this is likely to have deleterious effects on economic growth and health spending trends and whether any adverse consequences might be moderated by ensuring better health among the older population. Methods: Fixed-effects models are used to estimate the relationship between the size of the older working-age population (55–69 years) and economic growth from 2020 to 2100 and to simulate how growth is modified by better health among the older working-age population, as measured by a 5% improvement in years lived with disability. We next use 2017 data on per capita health spending by age from the National Health Insurance Fund to project how population ageing will influence public health spending from 2020 to 2060 and how this relationship may change if the older population (≥ 60 years) ages in better or worse health than currently. Results: The projected increase in the share of the population aged 55–69 years is associated with a 4.1% slowdown in per-person gross domestic product (GDP) growth between 2020 and 2050 and a 5.2% slowdown from 2020 to 2100. However, a 5% reduction in disability rates among the older population offsets these effects and adds around 0.2% to annual per-person GDP growth in 2020, rising to nearly 0.4% per year by 2080. Baseline projections indicate that population ageing will increase public health spending as a share of GDP by 1.35 percentage points from 2020 to 2060; this will occur slowly, adding approximately 0.03 percentage points to the share of GDP annually. Poorer health among the older population (aged ≥ 60 years) would see population ageing add an additional 0.17 percentage points above baseline estimates, but healthy ageing would lower baseline projections by 0.18 percentage points, corresponding to potential savings of just over US$ 46 million per year by 2060. Conclusions: Good health at older ages could moderate the potentially negative effects of population ageing on economic growth and health spending trends in Mongolia. Continued investment in the health of older people will improve quality of life, while also enhancing the sustainability of public budgets. |
| Keywords: | economic growth; healthcare expenditures; healthy ageing; Mongolia; population ageing |
| JEL: | J1 |
| Date: | 2022–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117580&r=age |
| By: | Daron Acemoglu; Nicolaj S{\o}ndergaard M\"uhlbach; Andrew J. Scott |
| Abstract: | In 1990, one in five U.S. workers were aged over 50 years whereas today it is one in three. One possible explanation for this is that occupations have become more accommodating to the preferences of older workers. We explore this by constructing an "age-friendliness" index for occupations. We use Natural Language Processing to measure the degree of overlap between textual descriptions of occupations and characteristics which define age-friendliness. Our index provides an approximation to rankings produced by survey participants and has predictive power for the occupational share of older workers. We find that between 1990 and 2020 around three quarters of occupations have seen their age-friendliness increase and employment in above-average age-friendly occupations has risen by 49 million. However, older workers have not benefited disproportionately from this rise, with substantial gains going to younger females and college graduates and with male non-college educated workers losing out the most. These findings point to the need to frame the rise of age-friendly jobs in the context of other labour market trends and imperfections. Purely age-based policies are insufficient given both heterogeneity amongst older workers as well as similarities between groups of older and younger workers. The latter is especially apparent in the overlapping appeal of specific occupational characteristics. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2212.03355&r=age |
| By: | Siqi Wei (CEMFI, Centro de Estudios Monetarios y Financieros) |
| Abstract: | This paper begins with the observation that many olderworkers move to "bridge" jobs with lower wages and fewer working hours before exiting the labor force for good. To explain this gradual transition to full retirement, I propose a nonlinear agingrelated shock — mismatch shock, which mismatches workers with their existing job and triggers job leaves. I develop an empirical framework of employment and job transitions jointly with stochastic wage and hour processes to separate health risks, individual-specific productivity risks, firm-specific mismatch risks, quality of outside offers, and job destruction risks faced by older workers. The model is estimated with a sample of male individuals aged 51 to 70 in the US Health and Retirement Study applying a novel parameter-expanded stochastic EM algorithm. The paper finds that mismatch shocks play an important role in explaining the reduction in wages and hours for movers. Furthermore, I calculate the welfare cost of risks and quantify how much individuals value the possibility of a flexible transition to full retirement by constructing a utility-based structural model of consumption, employment and job movements where agents face the same risks as in the empirical model. The model is estimated using a novel simulation-based algorithm that exploits the connection to the empirical model and the estimates from the empirical model. The results show that the median cost of mismatch risks amounts to a reduction in consumption flow by 5?3%-7?1% depending on the education group. Banning job changes and re-entry causes a welfare loss equivalent to a consumption drop of 12% 4%. |
| Keywords: | Income risks, health risks, mismatch, bridge jobs, latent variables. |
| JEL: | J26 J24 J22 C51 I14 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2022_2205&r=age |
| By: | Shepard, Scott (Mercatus Center) |
| Abstract: | Abstract not available. |
| URL: | http://d.repec.org/n?u=RePEc:ajw:wpaper:08736&r=age |
| By: | Shepard, Scott (Mercatus Center) |
| Abstract: | This article will focus on the California Rule and its potential abolition. The Rule, conjured up by the California Supreme Court, and subsequently adopted in other jurisdictions, forbids the state to reduce pension benefits for state workers at any time |
| URL: | http://d.repec.org/n?u=RePEc:ajw:wpaper:09527&r=age |
| By: | Tavares, Aida Isabel |
| Abstract: | Este texto visa fazer uma comparação dos sistemas de cuidados continuados entre os países da União Europeia e descrever o perfil dos cuidadores informais. Desta forma, seguimos um percurso de análise que se inicia com uma perspetiva agregada dos sistemas de cuidados continuados e que procede com uma perspetiva assente na observação do individuo. Pretende-se, assim, fornecer o enquadramento providencial ou de bem-estar social onde os cuidadores informais estão inseridos nos países da EU. |
| Keywords: | cuidados continuados, cuidadores informais, Europa |
| JEL: | A1 I10 I30 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:115735&r=age |
| By: | Olegs Krasnopjorovs (LU - University of Latvia) |
| Abstract: | Economy-wide inflation rate does not necessarily correspond to the inflation rate actually faced by any given household. This paper is the first one to assess different inflation experiences of various household types in Latvia. It finds that low-income households and retirees have faced consistently higher inflation rate by about 0.5 percentage points per annum over the last 20 years. This result is consistent with higher inflation perceptions among these population groups as recorded in consumer surveys. Higher inflation for low-income households and retirees reflects the lion's share of food, utility bills and healthcare services in their consumption basket, which are among those goods and services with the fastest increase in consumer prices. Inflation inequality was particularly large before the Global Financial Crisis (GFC) of 2008 and grew again at the beginning of the Covid-19 pandemics. It is expected that inflation inequality in Latvia might increase further in 2022. The results of this study could be used in welfare policy debates, particularly regarding the use of retiree-specific (rather than economy-wide) inflation rate for indexation of old-age pensions, as well as analysing unequal economic costs of the Covid-19 pandemics on different population groups. |
| Keywords: | inflation inequality, inflation by population groups, inflation perceptions by population groups |
| Date: | 2022–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03861129&r=age |