nep-age New Economics Papers
on Economics of Ageing
Issue of 2023‒02‒27
seven papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Age-Dependent Risk Aversion: Re-evaluating Fiscal Policy Impacts of Population Aging By Phitawat Poonpolkul
  2. Home alone: Widows' Well-Being and Time By Maja Adena; Daniel Hamermesh; Michal Myck; Monika Oczkowska
  3. Defined Benefit and Defined Contribution Plans and the Distribution of Family Wealth: Working Paper 2023-02 By Nadia Karamcheva; Victoria Perez-Zetune
  4. The Impacts of Matching Contributions on Retirement Savings: Evidence from a Quasi-Natural Experiment in Turkey By Sadettin Haluk Citci; Halit Yanikkaya
  5. BRECHAS DE GÉNERO EN EL SISTEMA DE PENSIONES By Ximena Quintanilla Dominguez; Paulina Granados Zambrano; Maria Fernanda Toledo Badia
  6. The worldwide costs of dementia in 2019 By Wimo, Anders; Seeher, Katrin; Cataldi, Rodrigo; Cyhlarova, Eva; Dielemann, Joseph L.; Frisell, Oskar; Guerchet, Maëlenn; Jönsson, Linus; Malaha, Angeladine Kenne; Nichols, Emma; Pedroza, Paola; Prince, Martin; Knapp, Martin; Dua, Tarun
  7. EVOLUCIÓN Y DESEMPEÑO INDIVIDUAL DE LOS CAMBIOS DE FONDOS EN EL SISTEMA DE PENSIONES By Olga Fuentes Contreras; Cristian Hernández Fuentes; Eugenio Salvo Cifuentes

  1. By: Phitawat Poonpolkul
    Abstract: The integration of age-dependent increasing risk aversion (IRA) into an overlapping generations model (OLG) with risk-sensitive preferences provides a more comprehensive understanding of risk aversion, life-cycle behavior, and welfare under uncertainties. A quantitative analysis shows that IRA individuals accumulate more precautionary savings and adjust working hours to mitigate income shocks. However, this mitigation of uncertainty entails a cost of reduced resources, which could have otherwise been used to increase overall consumption of goods and leisures. Three alternative policies to address the challenges posed by aging are evaluated: increasing a payroll tax rate, reducing pension benefits, and extending the retirement age. The results show that individuals who expect to become more risk averse in old age may prefer the payroll tax rate increase, as the other two options results in relatively higher income uncertainty, which contradicts the results of previous studies that assumed constant risk aversion (CRA).
    Keywords: Overlapping generations model; Fiscal sustainability; Demographic changes; Increasing risk aversion; Non-expected utility
    JEL: D15 D81 E62 J11
    Date: 2023–02
  2. By: Maja Adena (WZB Berlin); Daniel Hamermesh (University of Texas at Austin); Michal Myck (Centre for Economic Analysis); Monika Oczkowska (Centre for Economic Analysis)
    Abstract: Using data from the Survey of Health, Ageing and Retirement in Europe (SHARE, 2004-17) and time diaries from Poland (2013), the U.S. (2006-16), the U.K. (2014-15) and France (2009-10), we examine differences between widowed and partnered older women in well-being and its development in widowhood. Most importantly, our analysis accounts for time use, an aspect which has not been studied previously. We trace the evolution of well-being of women who become widowed by comparing them with their matched non-widowed ‘statistical twins’ and examine the role of an exceptionally broad set of potential moderators of widowhood’s impact on well-being. We confirm a dramatic decrease in mental health and life satisfaction after the loss of partner, followed by a slow partial recovery over a five-year period. An extensive set of controls recorded prior to widowhood, including detailed family ties and social networks, provides little help in explaining the deterioration in well-being. Unique data from time-diaries kept by older women in several European countries and the U.S. tell us why: the key factor behind widows’ reduced well-being is increased time spent alone.
    Keywords: widowhood; well-being; social networks; time use;
    JEL: I31 I19 J14
    Date: 2023–01–20
  3. By: Nadia Karamcheva; Victoria Perez-Zetune
    Abstract: Family wealth inequality in the United States has risen over the past several decades, as documented by researchers using a variety of methods and data. Much of family wealth is in tax- preferred, employer-sponsored retirement plans—typically either a traditional defined benefit (DB) plan or the now more prevalent defined contribution (DC) plan. Because retirement wealth is generally less concentrated than other types, changes in the distribution of retirement wealth and in the type of retirement assets could affect overall wealth inequality. Using
    JEL: J21 J26
    Date: 2023–02–10
  4. By: Sadettin Haluk Citci (Department of Economics, Gebze Technical University); Halit Yanikkaya (Department of Economics, Gebze Technical University)
    Abstract: Using a dataset containing information for more than 39 million contracts and a quasi-experimental design provided by national matching contribution policy reform in Turkey, we study the effects of matching contributions on saving outcomes and determine heterogeneities in responses to matching contribution. Differences-in-differences estimations show that the program leads to a substantial rise in contributions paid. The matching contribution policy raises contributions paid by 18 percent. Moreover, after 30 percent sharp rise in the match threshold, we examine the effect of the upsurge in threshold on the contributions paid. Overall, our results imply that the match threshold is binding and financial incentives significantly raise saving contributions.
    Keywords: saving incentives, matching contributions, pension saving
    JEL: H2 H3 D14
    Date: 2023–01–24
  5. By: Ximena Quintanilla Dominguez; Paulina Granados Zambrano; Maria Fernanda Toledo Badia (Studies Division, Chilean Pension Supervisor)
    Abstract: El presente documento, elaborado por la Superintendencia de Pensiones, busca ahondar en el análisis de las brechas de género en el sistema. El análisis se enfoca en dos indicadores: probabilidad de cotizar y saldos acumulados, a través de una regresión logística y un modelo OLS, respectivamente, encontrando que cuando se consideran variables del mercado laboral, el efecto del sexo desaparece o disminuye de manera importante. Adicional a lo anterior, se realiza un análisis de la evolución de la brecha de género en los saldos acumulados, encontrándose que, aunque la brecha ha disminuido a través de las cohortes y del tiempo, ésta se mantiene a través de todas las edades, e inclusive existiría un patrón particular en el caso de los jóvenes, para quienes la brecha comienza relativamente alta.
    Keywords: Sistema de Pensiones, trabajo, género
    Date: 2022–12
  6. By: Wimo, Anders; Seeher, Katrin; Cataldi, Rodrigo; Cyhlarova, Eva; Dielemann, Joseph L.; Frisell, Oskar; Guerchet, Maëlenn; Jönsson, Linus; Malaha, Angeladine Kenne; Nichols, Emma; Pedroza, Paola; Prince, Martin; Knapp, Martin; Dua, Tarun
    Abstract: Introduction: Dementia is a leading cause of death and disability globally. Estimating total societal costs demonstrates the wide impact of dementia and its main direct and indirect economic components. Methods: We constructed a global cost model for dementia, presenting costs as cumulated global and regional costs. Results: In 2019, the annual global societal costs of dementia were estimated at US $1313.4 billion for 55.2 million people with dementia, corresponding to US $23, 796 per person with dementia. Of the total, US $213.2 billion (16%) were direct medical costs, US $448.7 billion (34%) direct social sector costs (including long-term care), and US $651.4 billion (50%) costs of informal care. Discussion: The huge costs of dementia worldwide place enormous strains on care systems and families alike. Although most people with dementia live in low- and middle-income countries, highest total and per-person costs are seen in high-income countries. Highlights: Global economic costs of dementia were estimated to reach US $1313.4 in 2019. Sixty-one percent of people with dementia live in low-and middle-income countries, whereas 74% of the costs occur in high-income countries. The impact of informal care accounts for about 50% of the global costs. The development of a long-term care infrastructure is a great challenge for low-and middle-income countries. There is a great need for more cost studies, particularly in low- and middle-income countries. Discussions of a framework for global cost comparisons are needed.
    Keywords: Alzheimer´s disease; cost; cost-of-illness study; dementia; economics; informal care
    JEL: J1
    Date: 2023–01–08
  7. By: Olga Fuentes Contreras; Cristian Hernández Fuentes; Eugenio Salvo Cifuentes (Studies Division, Chilean Pension Supervisor)
    Abstract: Los cambios de fondos han aumentado de manera significativa en los últimos años, con cifras récord durante el 2020, año que evidenció más de nueve millones de traspasos de cuentas obligatorias con volúmenes acumulados equivalentes a casi el 80% del valor de los activos totales administrados. La mayoría de los traspasos que se observan en el período, tanto en cantidad como en montos, son desde el fondo Tipo A al fondo tipo E y viceversa. Destaca como resultado que un elevado porcentaje de los afiliados que ha realizado cambios de fondos en el periodo 2014-2021 evidenció un peor desempeño versus los benchmarks considerados. En efecto, el 77, 5% y el 72, 3% de los afiliados que ha realizado traspasos ha tenido un peor desempeño en su estrategia que si se hubiera quedado en el fondo original o en la estrategia por defecto, respectivamente. Respecto al desempeño financiero de la estrategia de cambio de fondos elegida por el afiliado, se observa que en promedio, la rentabilidad acumulada de los afiliados que cambiaron sus fondos fue 6, 2% menor que la que hubiesen obtenido de haber seguido la estrategia por defecto y de 10, 1% inferior en relación a haberse mantenido en el fondo donde se encontraban inicialmente.
    Keywords: Sistema de Pensiones de contribución definida, Portafolio de Inversiones, Economic behavior
    Date: 2022–03

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