nep-age New Economics Papers
on Economics of Ageing
Issue of 2023‒02‒20
five papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Retirement Decision of Belgian Couples and the Impact of the Social Security System By Cetin, Sefane; Jousten, Alain
  2. Boomerang Children and Parental Retirement Outcomes By Grant M. Seiter; Mary J. Lopez; Sita Slavov
  3. Macroeconomics of aging By Betti, Thierry; Lefebvre, Mathieu; Pestieau, Pierre
  4. Two Decades of Social Security Claiming By Sita Slavov
  5. Demographic Change and Economic Development in India By Neha Jain; Srinivas Goli

  1. By: Cetin, Sefane (Université catholique de Louvain, LIDAM/CORE, Belgium); Jousten, Alain (Université de Liège)
    Abstract: This paper investigates the retirement patterns of married couples in Belgium. To forecast retirement behavior, we use administrative Social Security data from 2003 to 2017 and a discrete choice random utility model. In particular, we concentrate on the spousal bonus of pension payments to comprehend how financial incentives resulting from the social security system’s structural design affect both partners’ retirement decisions. We simulate the effect of the elimination of the spousal bonus and find that a small portion of women delay their retirement whereas the rest substitute into alternative social security benefits. Our results not only highlight the significance of cross-program spillovers between various Social Security benefits, but also the heterogeneity in preferences for retirement and asymmetry of retirement behavior between husbands and wives.
    Keywords: Old-Age Labor Supply ; Retirement Incentives ; Spousal Bonus ; Pension Reforms
    JEL: D10 H55 J26
    Date: 2022–11–16
  2. By: Grant M. Seiter; Mary J. Lopez; Sita Slavov
    Abstract: As the share of U.S. adult children living with their parents increases, it is important to understand how children who “boomerang” back home impact their parents in their pre-retirement and post-retirement years. We use data from the Health and Retirement Study (HRS) to examine the effects of boomerang children on their parents’ labor market expectations and choices, as well as on their wealth, health, and life satisfaction. Event study analysis suggests that boomerang children return home due to short-term instabilities, such as negative shocks to marriage, income, and employment. We find that boomerang children are associated with a small increase in their parents’ subjective probability of working after age 65. However, there is no clear statistically significant evidence that they impact parents’ current or future labor market choices; nor is there any evidence that they affect parents’ wealth, health, or life satisfaction.
    JEL: J12 J14 J26
    Date: 2023–01
  3. By: Betti, Thierry; Lefebvre, Mathieu; Pestieau, Pierre (Université catholique de Louvain, LIDAM/CORE, Belgium)
    Abstract: The purpose of this chapter is to analyze the effects that population aging, and specifically the increase in longevity, may have on capital accumulation and the welfare of society. Throughout our analysis, we use as back bone a two-period overlapping generation model with variable longevity, distinguishing between the case when longevity increase is exogenous and the case when it is endogenous, namely partially the responsibility of individuals or governments. In each section, we first provide the result arising from our central model and then review the relevant literature. Keywords: Longevity, OLG models, Capital accumulation.
    Keywords: Longevity ; OLG models ; Capital accumulation
    JEL: H55 I12 I13 J10 J11
    Date: 2023–01–01
  4. By: Sita Slavov
    Abstract: Twenty years ago, the adjustment to monthly Social Security benefits for early or delayed claiming was, on average, roughly actuarially fair, although some subsets of individuals could gain from delay. Since then, delaying claiming has become much more attractive thanks to three factors: a more generous delayed retirement credit, improvements in mortality, and historically low real interest rates. In this article, I examine how these three factors influence optimal claiming behavior. I also discuss empirical patterns of claiming across individuals and over time, as well as explanations for these patterns. I argue that although many people appear to claim suboptimally early, this behavior may be changing as information spreads about the importance of the claiming decision. Finally, I discuss policy towards claiming and the impact that an increase in strategic claiming could have on Social Security’s finances.
    JEL: G59 H55 J26
    Date: 2023–01
  5. By: Neha Jain (Indian Institute of Foreign Trade (IIFT), New Delhi); Srinivas Goli (International Institute for Population Sciences (IIPS), Mumbai, India.)
    Abstract: In this paper, we assess the economic benefits of demographic changes in India by employing econometric models and robustness checks based on panel data gathered over a period of more than three decades. Our analysis highlights four key points. First, India’s demographic window of opportunity began during 2001-05 and significantly improved after 2011. Second, the demographic dividend is estimated to be about 1.9 percentage points per annum for the period 1981–2015 based on the panel of 25 states of India. Third, our empirical analysis supports the argument that the realisation of the demographic dividend is conditional on a conducive policy environment with enabling aspects such as quality education, good healthcare, decent employment opportunities, good infrastructure, and gender empowerment. Fourth, the working-age population in India contributes around one-fourth of the inequality in per capita income across states. Thus, to reap the maximum dividends from the available demographic window of opportunity, India needs to work towards enhancing the quality of education and healthcare in addition to providing good infrastructure, gender empowerment, and decent employment opportunities for the growing working-age population.
    Keywords: Demographic Dividend, Economic Development, Population Growth, Working-Age Population, Health, Education, Employment
    JEL: J10 J11
    Date: 2022

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