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on Economics of Ageing |
| By: | Sebastian Becker; Hermann Buslei; Johannes Geyer; Peter Haan |
| Abstract: | This study provides novel evidence about the pension wealth elasticity of employment. For the identification we exploit reform-induced variation of pension wealth that is related to the number of children but which does not affect the implicit tax rate of employment. We use a difference-in-differences estimator based on administrative data from the German pension insurance and find that, on average, the negative employment effect of pension wealth is significant and economically important. Heterogeneity analyses document a strong age pattern showing that the employment effects are driven by behavioral responses of women close to retirement. The age pattern is partly explained by the positive effect of pension wealth on disability pensions after the age of 60. |
| Keywords: | pension reform, pension wealth elasticity, female labour supply, retirement, differences in differences |
| JEL: | H55 J13 J21 J26 |
| Date: | 2023–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdp:dpaper:0009&r=age |
| By: | Giovanna Apicella (University of Udine); Enrico G. De Giorgi (University of St. Gallen - SEPS: Economics and Political Sciences; Swiss Finance Institute) |
| Abstract: | Financial risk and longevity risk are the main risks affecting pension income. This paper analyses gender differences related to how financial risk taking and survival expectations are correlated. We analyse data from the “Survey of Health, Ageing and Retirement in Europe” (SHARE) database and find a significant gender gap in self-assessed risk tolerance, consistently with previous literature. Moreover, we show that individuals with realistic survival expectations (i.e., survival expectations that are close to their actuarial counterparts) tend to take more financial risk. Because women show a significantly higher underestimation of their survival compared to men (-17% vs. -6% on average), the co-existence of no risk taking and longevity risk mis-perception is much stronger among women than men, what we call the leveraged gender gap, with important economic implications in relation to post-retirement income. |
| Keywords: | gender pension gap, financial risk tolerance, longevity risk, demographic literacy |
| JEL: | D15 H31 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2309&r=age |
| By: | Pablo Garcia Sanchez (Banque centrale du Luxembourg, Département Economie et Recherche); Luca Marchiori (Banque centrale du Luxembourg, Département Economie et Recherche); Olivier Pierrard (Banque centrale du Luxembourg, Département Economie et Recherche) |
| Abstract: | Long-term care (LTC) expenditures of the elderly are high in developed countries and will grow further with population aging. In addition, LTC costs are heterogeneous across individuals and unknown early in life. In this paper, we add uncertainty over the arrival and magnitude of future LTC costs into a life-cycle model with endogenous aging, and we analyze how this affects the optimal behavior of agents. We show that uncertainty boosts precautionary savings, lowers investment in preventive care, and weakens the effectiveness of subsidies to encourage prevention. Our results therefore suggest that uncertainty should not be ignored in models that study positive or normative aspects of health investment. |
| Keywords: | health; long-term care costs; uncertainty; stochastic model |
| JEL: | C60 D15 D81 I12 I18 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2023006&r=age |
| By: | Daniele Angelini (University of Konstanz) |
| Abstract: | Population aging affects the relative supply of inputs in the economy altering the in-centives to adopt different types of technology. Empirically, I document a hump-shaped relation between the age of the population and the adoption of new-technology proxied by the ICT capital share. To explain the non-monotonic relationship and identify the mech-anisms at play, I build a dynamic general equilibrium model with endogenous technology and R&D-driven technological progress. New-technology is defined as a labor-saving (capital-intensive) technology requiring skills to be used. An increase in the capital-to-labor ratio driven by population aging increases new-technology adoption while the increasing scarcity of young workers that have higher incentives to acquire the comple-mentary skills to new-technology reduces it. The model, calibrated to fit European data, shows that the demographic structure of the population is a major determinant of tech-nology adoption. Population aging explains almost half of the increase in new-technology adoption in the period 1995-2020 and it determines its reduction in the period 2020-2045. A decomposition exercise shows that population aging is a primary source of the increase in the skill premium explaining a larger share of its increase than technological progress. |
| Keywords: | Automation, Demographic change, Human capital, Inequality, R&D, OLG |
| JEL: | J11 J24 J26 J31 E25 H23 O31 O33 |
| Date: | 2023–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:2301&r=age |
| By: | Alexander Carlo; Nils Kok; Piet Eichholtz |
| Abstract: | Infrastructure has become an important part of institutional investors´ alternative asset portfolios all over the world. This paper documents that larger pension funds, public pension funds, and pension funds with a larger allocation to alternative assets are more likely to invest in infrastructure, and to manage it internally. Smaller pension funds make more use of intermediated external investment approaches, face higher investment costs and realize lower returns. We observe significant economies of scale for the investment performance of pension fund investments in infrastructure, while financial intermediation does not seem to lead to worse performance. Overall, as an institutional investment, infrastructure has proven to be the best-performing asset class over the 2007-2018 time period. The increase in infrastructure allocations by pension funds seem to be justified from a risk/return point of view. |
| Keywords: | Infrastructure; investment performance; Pension fund; Real Assets |
| JEL: | R3 |
| Date: | 2022–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:2022_146&r=age |
| By: | Claudia Senik (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, SU - Sorbonne Université); Guglielmo Zappalà (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Carine Milcent (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Chloé Gerves-Pinquié (IRSRPL - Institut Recherche en Santé Respiratoire des Pays de la Loire); Patricia Dargent-Molina (INSERM - Institut National de la Santé et de la Recherche Médicale) |
| Abstract: | Happier Elderly Residents The positive impact of physical activity on objective and subjective health condition of elderly people in nursing homes. Evidence from a multi-site randomized controlled trial. We explore the effects of adapted physical exercise programs in nursing homes, in which some residents suffer from dementia and/or physical limitations and other do not. We use data from 452 participants followed over 12 months in 32 retirement homes in four European countries. Using a difference-in-difference with individual random effects model, we show that the program has exerted a significant impact on the number of falls and the self-declared health and health-related quality of life of residents (EQ-5D). The wide scope of this study, in terms of sites, countries, and measured outcomes, brings generality to previously existing evidence. A simple computation, in the case of France, suggests that such programs are highly cost-efficient. |
| Keywords: | Physical activity, Retirement homes, Impact study, Falls, Subjective health |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03966677&r=age |
| By: | Lin, Zhuoer; Fu, Mingqi; Chen, Xi |
| Abstract: | Cognitive misperception contributed to poor decision-making; yet their impact on health-related decisions is less known. We examined how self-perceived memory was associated with chronic disease awareness among older Chinese adults. Data were obtained from the China Health and Retirement Longitudinal Study. Nationally representative blood biomarkers identify participants' dyslipidemia and diabetes status. Among participants with biomarker identified dyslipidemia or diabetes, disease awareness was defined as self-reported diagnosis of the conditions. The proportions of disease awareness were lower for individuals with better self-perceived memory and those with more impaired cognitive ability, showing opposite patterns. Controlling for cognitive ability and covariates, self-perceived memory was negatively associated with the dyslipidemia and diabetes awareness. In particular, older adults with the highest level of self-perceived memory had significantly lower disease awareness as compared to those with the lowest level of self-perceived memory. Our findings were robust to alternative cognitive measures and were stronger for less educated rural residents or those living without children. Cognitive misperception poses great challenges to chronic disease management. Targeted interventions and supports are needed, particularly for the disadvantaged. |
| Keywords: | Cognitive impairment, Self-perceived memory, Chronic disease awareness, Dyslipidemia, Diabetes |
| JEL: | I12 J14 D91 I18 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1239&r=age |
| By: | Louis Johner; Martin Hoesli; Jon Lekander |
| Abstract: | Pension funds aim to hold assets that match their future liabilities. We expand extant research by considering a long period encompassing various economic regimes. Using return data for four asset classes in Sweden over a 145-year period, we investigate the out-of-sample performance of portfolios optimized using several approaches and compare them with that of a naïve allocation. We then turn to analyzing the drivers of asset allocations, in particular multi-family properties, over time. The usefulness of holding residential real estate to hedge pension liabilities is assessed. Our analyses make it possible to gauge the benefits of holding residential properties in various economic environments. |
| Keywords: | Long-term; Multi-Family Properties; Pension fund; Portfolio Allocation |
| JEL: | R3 |
| Date: | 2022–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:2022_232&r=age |
| By: | Beatrice Baaba Tawiah (Paderborn University); Valentin Schiele (University of Paderborn) |
| Abstract: | This paper replicates the analysis of Schneeweis et al. (2014) using their sample as well as an extended sample. Schneeweis et al. (2014) use the Survey of Health, Ageing and Retirement in Europe (SHARE) dataset and exploit compulsory schooling reforms implemented in six European countries to analyse the impact of education on cognitive functioning decades after leaving school. They find a positive effect of education on memory scores and some evidence of a protective effect of education on the decline in verbal fluency. Our results support their findings when we use the same waves as they do, but also when we extend the sample by including more countries and interview waves and use different variables for years of education. |
| Keywords: | Replication; Education; Cognitive abilities;Compulsory schooling |
| JEL: | I21 D91 J14 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:dispap:102&r=age |
| By: | Giovanna Apicella (University of Udine; University of St. Gallen); Enrico G. De Giorgi (University of St. Gallen - SEPS: Economics and Political Sciences; Swiss Finance Institute); Emilia Di Lorenzo (CSEF - University of Naples Federico II - Faculty of Economics); Marilena Sibillo (Università degli Studi di Salerno) |
| Abstract: | Longevity crucially affects demand for pensions, insurance products and annuities. Consistent empirical evidence shows that women have historically experienced lower mortality rates than men. In this paper, we study a measure of the gender gap in mortality rates, we call “Gender Gap Ratio”, across a wide range of ages and for four countries: France, Italy, Sweden and USA. We show the stylized facts that characterize the trend of the Gender Gap Ratio, both in its historical evolution and future projection. Focusing on an example temporary life annuity contract, we give a monetary consistency to the Gender Gap Ratio. The evidence we provide about a Gender Gap Ratio that ranges between 1.5 and 2.5, depending on age and country, translate into a significant reduction of up to 25% in the benefits from a temporary life annuity contract for women with respect to men, against the same amount invested in the annuity. The empirical evidence discussed in this paper documents the crucial importance of working towards a more widespread demographic literacy, e.g., a range of tools and strategies to raise longevity consciousness among individuals and policy makers, in the framework of gender equality policies. |
| Keywords: | Gender gap in mortality, financial well-being, demographic literacy |
| JEL: | G53 J11 J16 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2302&r=age |
| By: | Dutt, Satyajit; Radermacher, Jan W. |
| Abstract: | We investigate consumption patterns in Europe with supervised machine learning methods and reveal differences in age and wealth impact across countries. Using data from the third wave (2017) of the Eurosystem's Household Finance and Consumption Survey (HFCS), we assess how age and (liquid) wealth affect the marginal propensity to consume (MPC) in the Netherlands, Germany, France, and Italy. Our regression analysis takes the specification by Christelis et al. (2019) as a starting point. Decision trees are used to suggest alternative variable splits to create categorical variables for customized regression specifications. The results suggest an impact of differing wealth distributions and retirement systems across the studied Eurozone members and are relevant to European policy makers due to joint Eurozone monetary policy and increasing supranational fiscal authority of the EU. The analysis is further substantiated by a supervised machine learning analysis using a random forest and XGBoost algorithm. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:383&r=age |
| By: | Bhatia, Mrigesh; Dixit, Priyanka; Kumar, Manish; Dwivedi, Laxmi Kant |
| Abstract: | Background: Hypertension (HTN) is a leading cause of mortality and morbidity in developing countries. For India, the hidden burden of undiagnosed hypertension is a major concern. This study aims to assess and explain socio-economic inequalities among self-reported and undiagnosed hypertensives in India. Methods: The study utilized data from the Longitudinal Aging Study in India (LASI), a nationally-representative survey of more than 72, 000 older adults. The study used funnel plots, multivariable logistic regression, concentration indices, and decomposition analysis to explain the socio-economic gap in the prevalence of self-reported and undiagnosed hypertension between the richest and the poorest groups. Results: The prevalence of self-reported and undiagnosed hypertension was 27.4 and 17.8% respectively. Monthly per capita consumption expenditure (MPCE) quintile was positively associated with self-reported hypertension but negatively associated with undiagnosed hypertension. The concentration index for self-reported hypertension was 0.133 (p |
| Keywords: | decomposition; India; older adults; self-reported hypertension; socio-economic inequalities; undiagnosed hypertension; LSE Covid Impact Fund for Research and Knowledge Exchange. |
| JEL: | J1 |
| Date: | 2023–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:118197&r=age |
| By: | Martin Hoesli (University of Geneva - Geneva School of Economics and Management (GSEM); Swiss Finance Institute; University of Aberdeen - Business School); Louis Johner (University of Geneva - Geneva School of Economics and Management); Jon Lekander (Aberdeen Property Investors Nordic Region) |
| Abstract: | Pension funds aim to hold assets that match their future liabilities. For this purpose, there is a growing interest in multi-family properties as their returns should be positively related to wage growth and hence pension liabilities. Using data for Sweden over 145 years, we investigate the role that multi-family properties play in the context of a mixed-asset portfolio that aims to track wage growth. The benefits from holding multi-family properties are the greatest for low-risk allocation approaches. For more risky strategies, the role of real estate is also positive but more muted, and it varies greatly over time. Holding real estate was most beneficial during the first two decades of the 21st century. Multi-family properties are found to be the only asset class to be positively related to wage growth. We show that the net operating income acts as the transmission channel between wages and property returns. |
| Keywords: | Multi-family properties, Mixed-asset portfolio, Pension fund, Wages, Long run, Sweden |
| JEL: | R33 G11 G23 C63 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2308&r=age |
| By: | Radermacher, Jan W. |
| Abstract: | I investigate consumption patterns in Italy and use a PCA-biplot to discover a consumption puzzle for the elderly poor. Data from the third wave (2017) of the Eurosystem's Household Finance and Consumption Survey (HFCS) indicate that Italian poor old-aged households boast lower levels of the marginal propensity to consume (MPC) than suggested by the dominant consumption models. A customized regression analysis exhibits group differences with richer peers to be only half as large as prescribed by a traditional linear regression model. This analysis has benefited from a visualization technique for high-dimensional matrices related to the unsupervised machine learning literature. I demonstrate that PCA-biplots are a useful tool to reveal hidden relations and to help researchers to formulate simple research questions. The method is presented in detail and suggestions on incorporating it in the econometric modeling pipeline are given. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:382&r=age |
| By: | Katsiaryna Kananovich (LIRSA-CRC - LIRSA. Centre de recherche en comptabilité - LIRSA - Laboratoire interdisciplinaire de recherche en sciences de l'action - CNAM - Conservatoire National des Arts et Métiers [CNAM] - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université); Mickaël Blanchet (CHU Nantes - Centre hospitalier universitaire de Nantes) |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03957756&r=age |
| By: | Katsiaryna Kananovich (LIRSA-CRC - LIRSA. Centre de recherche en comptabilité - LIRSA - Laboratoire interdisciplinaire de recherche en sciences de l'action - CNAM - Conservatoire National des Arts et Métiers [CNAM] - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université); Mickaël Blanchet (CHU Nantes - Centre hospitalier universitaire de Nantes) |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03914020&r=age |