nep-age New Economics Papers
on Economics of Ageing
Issue of 2023‒04‒10
twelve papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. The ageing Caribbean: 20 years of the Madrid Plan of Action By Quashie, Nekehia; Jones, Francis
  2. The Health-Consumption Effects of Increasing Retirement Age Late in the Game By Caroli, Eve; Pollak, Catherine; Roger, Muriel
  3. Do Older Adults Accurately Forecast Their Social Security Benefits? By Grant M. Seiter; Sita Slavov
  4. Pay-As-They-Get-In: Attitudes Towards Migrants and Pension Systems By Boeri, Tito; Gamalerio, Matteo; Morelli, Massimo; Negri, Margherita
  5. Longevity, Health and Housing Risks Management in Retirement By Pierre-Carl Michaud; Pascal St-Amour
  6. Growing older and growing apart? Population age structure and trade By Joseph Kopecky Author-1-Name-First: Joseph Author-1-Name-Last: Kopecky
  7. Trends in Gender and Racial/Ethnic Disparities in Physical Disability and Social Support among U.S. Older Adults with Cognitive Impairment Living Alone, 2000–2018 By Chen, Shanquan; Zhang, Huanyu; Underwood, Benjamin R.; Wang, Dan; Chen, Xi; Cardinal, Rudolf N.
  8. Technology and Wage Share of Older Workers By Park, Donghyun; Shin, Kwanho
  9. Non-survival to pension age in Denmark and Sweden: a sub-national investigation By Kashnitsky, Ilya
  10. Determinants of Heat Risk in an Aging Population: A Machine Learning Approach By Klauber, Hannah; Koch, Nicolas
  11. Reverse Mortgages and Financial Literacy By Ismael Choinière-Crèvecoeur; Pierre-Carl Michaud
  12. Health Implications of Building Retrofits: Evidence from a Population-Wide Weatherization Program By Künn, Steffen; Palacios, Juan

  1. By: Quashie, Nekehia; Jones, Francis
    Abstract: This report assess the situation of older persons and reviews the actions taken in Caribbean countries and territories, particularly over the past five years, to implement the Madrid International Plan of Action on Ageing and related regional agreements. It contributes to the global and regional reviews of the Plan of Action, 20 years on from its adoption in 2002, and includes recommendations to further address population ageing and the rights of older persons in the Caribbean.
    Date: 2023–02–06
  2. By: Caroli, Eve (Université Paris-Dauphine); Pollak, Catherine (New York University); Roger, Muriel (INRA-CORELA)
    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 non-hospital health-care expenses, we show that the probability of having at least one sickness absence increases for all treated groups, while the overall number of sick days remains unchanged, conditional on having a sick leave. 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
    JEL: I10 J14 J18 J26
    Date: 2023–03
  3. By: Grant M. Seiter; Sita Slavov
    Abstract: How accurate are older people’s expectations about their future Social Security benefits? Using panel data from the Health and Retirement Study, we compare respondents’ observed Social Security claiming ages and benefits with subjective expectations provided during their 50s and early 60s. We find that, while older adults generally have accurate expectations about their claiming age, they underestimate their annual Social Security income by approximately $1, 896 (11.5 percent) on average. However, both accuracy and precision increase with age, and the forecast error for people in their early 60s is not statistically different from zero. Exploiting plausibly exogenous variation in the mailing of Social Security statements, which contain personalized information about future benefits, we show that information provision reduces the forecast error in annual income by $344 (2.1 percent of the average benefit).
    JEL: E21 H55 J14 J26
    Date: 2023–03
  4. By: Boeri, Tito (Bocconi University); Gamalerio, Matteo (University of Barcelona); Morelli, Massimo (Bocconi University); Negri, Margherita (University of St. Andrews)
    Abstract: We study whether a better knowledge of the functioning of pay-as-you-go pension systems and recent demographic trends in the hosting country affects natives' attitudes towards immigration. In two online experiments in Italy and Spain, we randomly treated participants with a video explaining how, in pay-as-you-go pension systems, the payment of current pensions depends on the contributions paid by current workers. The video also explains that the ratio between the number of pensioners and the number of workers in their countries will grow substantially in the future. We find that the treatment improves participants' knowledge about how a pay-as-you-go system works and the future demographic trends in their country. However, we find that only treated participants who do not support populist and anti-immigrant parties display more positive attitudes towards migrants, even though the treatment increases knowledge of pension systems and demographic trends for all participants.
    Keywords: information provision, experiment, immigration, pay-as-you-go pension systems, population ageing, populism
    JEL: C90 D83 H55 J15 F22
    Date: 2023–03
  5. By: Pierre-Carl Michaud; Pascal St-Amour
    Abstract: Annuities, long-term care insurance and reverse mortgages remain unpopular to manage longevity, medical and housing price risks after retirement. We analyze low demand using a life-cycle model structurally estimated with a unique stated-preference survey experiment of Canadian households. Low risk aversion, substitution between housing and consumption and low marginal utility when in poor health explain most of the reduced demand. Bequests motives are found to be a luxury good and play a limited role. The remaining disinterest is explained by information frictions and behavioural status-quo biases. We find evidence of strong spousal co-insurance motives motivating LTCI and of responsiveness to bundling with a near doubling of demand for annuities when reverse mortgages can be used to annuitize, instead of consuming home equity.
    Keywords: retirement wealth; insurance; health risk; housing risk
    JEL: J14 G52 G53
    Date: 2023
  6. By: Joseph Kopecky Author-1-Name-First: Joseph Author-1-Name-Last: Kopecky (Trinity College Dublin)
    Abstract: This paper explores the empirical relationship between population age structure and bilateral trade. I include age structure in both log and PPML formulations of the gravity equation of trade. I study relative age effects, using differences in the demographic structure of each country-pair. In line with existing literature and the recent discussions about the macroeconomic implications of aging, I find that having a relatively larger share of population in working age increases bilateral exports. This effect is robust to various estimation models, as well as to changes in the method of specifying the demographic controls. Old-age shares appear to have a weaker, negative, impact on this trade relationship, though these results differ between log specifications of the gravity equation and PPML estimates. Estimating instead the balance of trade between trading partners produces similar results, with positive effects of age structure peaking later in working life. Global populations are poised to undergo a massive transition. Trade a crucial way that the demographic deficits of one country may be offset by the dividends of another as comparative advantages shift along with the size and strength of their underlying workforce. My work is among the first to quantify the effect of relative age structure between two countries and their bilateral trade flows. Focusing for the on aggregate flows, relative age shares, and PPML estimates of the trade relationship, this paper provides the most comprehensive picture to date on how age structure affects trade.
    Keywords: Trade, Demographicchange, aging, gravityequation, populationaging
    JEL: J11 F10 F16
    Date: 2023–01
  7. By: Chen, Shanquan (University of Cambridge); Zhang, Huanyu (Chinese University of Hong Kong); Underwood, Benjamin R. (University of Cambridge); Wang, Dan (Ontario Tech University); Chen, Xi (Yale University); Cardinal, Rudolf N. (University of Cambridge)
    Abstract: Informal care is a primary source of support for older adults with cognitive impairment but is less available to those who live alone. We leverage the U.S. Health and Retirement Survey 2000-2018 to examine trends in the prevalence of physical disability and social support among older adults with cognitive impairment living alone, and their gender and racial/ethnic disparities. Information on physical disability and social support was collected through measures of basic and instrumental activities of daily living (BADLs, IADLs). Logistic and Poisson regression were adopted to estimate linear trends over time for binary and integer outcomes, respectively. Among those who reported BADL/IADL disability, the proportion unsupported for BADLs decreased significantly over time, while the proportion unsupported for IADLs increased significantly over time. Among those who received IADL support, the number of unmet IADL support needs increased significantly over time. Over time, Black respondents had a relatively increasing trend of being BADL-unsupported, and Hispanic and Black respondents had a relatively increasing trend in the number of unmet BADL needs, compared to the corresponding trends in White respondents. Our findings may prompt customized interventions to reduce disparities and unmet support needs.
    Keywords: social support, physical disability, racial/ethnic disparity, gender disparity, cognitive impairment
    JEL: I10 J11 J14 J15 J16
    Date: 2023–03
  8. By: Park, Donghyun (Asian Development Bank); Shin, Kwanho (Korea University)
    Abstract: Technological progress may be less beneficial for older workers than younger workers. In this paper, we empirically examine the impact of technological change on the wage share of older workers. More specifically, we look at five different types of technological advancement using data from 30 European and Asian countries that are at the forefront of global population aging. Our findings indicate that recent technological developments centered on information and communication technology, software, and robots do not adversely affect older workers. One possible explanation is that older workers may be more open to learning and adopting new technologies than widely presumed.
    Keywords: aging; older workers; wage share; capital; information communication technologies; robots
    JEL: E24 E25 J01 J11 O11
    Date: 2023–03–24
  9. By: Kashnitsky, Ilya (University of Southern Denmark)
    Abstract: Mortality keeps improving even in the most developed countries. Deaths before senior age become more and more occasional and thus are increasingly considered unnecessary and perhaps even avoidable. Denmark belongs to the most developed countries of the world in terms of progress in lowering human mortality levels. Yet there is still much room for large improvements – compared to Sweden, Danish population has almost the same survival profile up to age 50 but then there are striking differences in later ages. Between ages 50 and 65 about 10% of Danish males die while in Sweden this proportion is only about 7%. This paper explores the regularities of non-survival to pension age across Danish municipalities and compares them to ones in Sweden. The main focus of this exploration is identification of the spatial patterns based on the mortality characteristics of the population that are studied using the advanced spatial clustering algorithm that utilizes tree edge removal technique. The methodological challenge resolved along the way is the construction of reliable life table estimates for the small municipal populations. The results suggest that the main reason for the observed gap between Danish and Swedish municipalities, especially for males, is the lagging behind development of the most deprived areas, which corresponds with the results on widening gaps along socioeconomic dimensions.
    Date: 2023–02–21
  10. By: Klauber, Hannah (Mercator Research Institute on Global Commons and Climate Change (MCC)); Koch, Nicolas (Mercator Research Institute on Global Commons and Climate Change (MCC))
    Abstract: This paper identifies individual and regional risk factors for hospitalizations caused by heat within the German population over 65 years of age. Using administrative insurance claims data and a machine-learning-based regression model, we causally estimate heterogeneous heat effects and explore the geographic, morbidity, and socioeconomic correlates of heat vulnerability. Our results indicate that health effects distribute highly unevenly across the population. The most vulnerable are more likely to suffer from chronic diseases such as dementia and Alzheimer's disease and live in rural areas with more old-age poverty and less nursing care. We project that unabated climate change might bring heat to areas with particularly vulnerable populations, which could lead to a five-fold increase in heat-related hospitalization by 2100.
    Keywords: heat, climate change, hospitalization, risk factors, adaptation, machine learning
    JEL: I14 I18 Q51 Q54 Q58
    Date: 2023–03
  11. By: Ismael Choinière-Crèvecoeur; Pierre-Carl Michaud
    Abstract: Few retirees use reverse mortgages. In this paper, we investigate how financial literacy and prior knowledge of the product influence take-up by conducting a stated-preference experiment. We exogenously manipulate characteristics of reverse mortgages to tease out how consumers value them and investigate differences by financial literacy and prior knowledge of reverse mortgages. We find that those with higher financial knowledge are more likely to know about reverse mortgages, not more likely to purchase them at any cost but are more sensitive to the interest rate and the insurance value of these products in terms of the non-negative equity guarantee.
    Keywords: reverse mortgages; savings; retirement planning; insurance
    JEL: G53 G21 R21
    Date: 2023
  12. By: Künn, Steffen (Maastricht University); Palacios, Juan (Massachusetts Institute of Technology)
    Abstract: What is the impact of housing upgrades on occupant health? Although economists and policymakers are certain about the health implications of housing upgrades, empirical evidence is largely missing or else only based on small-scale experiments in developing countries. This study provides the first population-representative quasi-experimental estimates based on a large-scale refurbishment program that renovated half of the East German housing portfolio in the aftermath of German reunification. During the 1990s, the German government devoted significant financial resources to upgrading the insulation and heating systems of over 3.6 million dwellings in East Germany. We link the renovations to individual demand for the healthcare of occupants using the German Socio-Economic Panel (SOEP) as well as administrative records of universal hospital admissions in Germany. Exploiting the staggered roll-out of the renovation program, our results show that an improvement in housing quality enhances the health of vulnerable age groups. Evidence from hospital records suggests that reductions in hospitalization were due to a lower risk of cardiovascular problems for older individuals (45 years or older) which were mainly driven by days with extremely hot and cold ambient temperatures. Our findings have strong policy implications and can enrich the cost-benefit analysis of public investments in weatherization programs.
    Keywords: housing quality, renovation program, health
    JEL: H54 I18 R21 R23 R38
    Date: 2023–03

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