nep-age New Economics Papers
on Economics of Ageing
Issue of 2023‒04‒17
fourteen papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Pay-as-they-get-in: Attitudes towards migrants and pension systems By Tito Boeri; Matteo Gamalerio; Massimo Morelli; Margherita Negri
  2. The Economic Characteristics of an Aging Society: a Dynamic Computable General Equilibrium Analysis By Zuo, Xuejin; Peng, Xiujian; Yang, Xin; Yang, Xiaoping; Yue, Han; Wang, Meifeng; Adams, Philip
  3. Evaluating the relationship between income, survival and loss of autonomy among older Canadians By Marie Connolly; Akakpo Domefa Konou; Marie-Louise Leroux
  4. Longevity, Health and Housing Risks Management in Retirement By Pierre-Carl Michaud; Pascal St. Amour
  5. Working Longer, Working Stronger? The Forward-Looking Effects of Increasing the Retirement Age on (Un)employment Behaviour By Niklas Gohl
  6. Population age structure and secular stagnation: Evidence from long run data By Joseph Kopecky Author-1-Name-First: Joseph Author-1-Name-Last: Kopecky
  7. Clustering the Swiss Pension Register By Layal Christine Lettry
  8. Wealth accumulation and de‐risking strategies among high-wealth Individuals By Carmichael, Donna
  9. Unequal care provision: evidence from the Share-Corona Survey By Elena Bassoli; Agar Brugiavini
  10. Projections de la population active à l’horizon 2080 By N.BECHICHI; M. FABRE; T. OLIVIA
  11. Feminization, ageing and occupational change in Europe in the last 25 years By MARISCAL-DE-GANTE Álvaro; PALENCIA ESTEBAN Amaia; GRUBANOV-BOSKOVIC Sara; FERNANDEZ MACIAS Enrique
  12. A poisoned gift? The hireability signals of an income-support program for the senior unemployed* By Axana Dalle; Philippe Sterkens; Stijn Baert
  13. Dying or Lying? For-Profit Hospices and End of Life Care By Jonathan Gruber; David H. Howard; Jetson Leder-Luis; Theodore L. Caputi
  14. Sobre el nuevo decreto de pensiones: algunos cálculos de urgencia By Ángel de la Fuente

  1. By: Tito Boeri; Matteo Gamalerio; Massimo Morelli; Margherita Negri
    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 support non-populist 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
    Date: 2023–03–16
  2. By: Zuo, Xuejin; Peng, Xiujian; Yang, Xin; Yang, Xiaoping; Yue, Han; Wang, Meifeng; Adams, Philip
    Abstract: China is experiencing rapid population ageing. The elderly 65 and older accounted for 13.5 per cent of the total population in 2020. It will continue to increase to 40 per cent in 2100. What’s the economic implication of population aging? Most research has focused on the macroeconomic effects of a declining labour force and increasing elderly. There is insufficient research on the changes in demand for goods and services brought about by population ageing. The research on the impact of such changes on the economy under the computable general equilibrium (CGE) framework is even rare. This paper attempts to fill the research gap in this area. Using a dynamic CGE model of the Chinese economy, in the baseline scenario we projected China’s economic growth path over the period of 2019 to 2100. We assumed that there is no change in the age-specific consumption demand even though there is population ageing which is reflected by the declining working-age population and the increasing elderly population. The simulation results revealed that China has to rely on technology improvement and capital stock increases to support its economic growth. The increasing elderly will put high pressure on China’s general government budget balance. Starting with the baseline described above, we constructed a policy scenario that deviated from the baseline due to ageing-induced changes to household and government consumption preferences for education, health and aged care services. With ageing, demand shifts against education and towards health and aged care services. The simulation results show that the effects on the macroeconomy of age-structure driven changes are negligible, even though the changes will affect the industrial outputs and cause small adjustments to economic structure. The increased demand for medical and aged-care services will exceed the decreased demand for education, thus driving up the general government budget deficit.
    Keywords: Agricultural and Food Policy
    Date: 2022
  3. By: Marie Connolly; Akakpo Domefa Konou; Marie-Louise Leroux
    Abstract: Evaluating the relationship between health at old age and income is crucial for the design of equitable public policies targeted toward the elderly. Using 2016 Canadian survey data on adults aged between 50 and 70, we estimate the relationships between individual income, longevity and dependency at the old age. We use both subjective and objective measures of the probability to survive to age 85, of the probability to have activities of daily living (ADL) limitations, and of the probability of entering a nursing home. We find that income and the (objective and subjective) probability to live to age 85 and over are positively related while income and the (objective and subjective) probability to suffer from ADL limitations are negatively related. We also find that while the objective probability to enter a nursing home is negatively correlated with income, the subjective probability is positively correlated with income. Most of our results are driven by individuals in the highest tercile of the income distribution. Our results are robust to different sensitivity checks.
    Keywords: Long term care, Survival probability, Probability to become dependent, Nursing home, Income.
    JEL: C36 I10 I14 I18 J14
    Date: 2023
  4. 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.
    JEL: G51 G53 I13 J14
    Date: 2023–03
  5. By: Niklas Gohl (University of Potsdam, Berlin School of Economics, DIW)
    Abstract: Leveraging two cohort-specific pension reforms, this paper estimates the forward-looking effects of an exogenous increase in the working horizon on (un)employment behaviour for individuals with a long remaining statutory working life. Using difference-in-differences and regression discontinuity approaches based on administrative and survey data, I show that a longer legal working horizon increases individuals’ subjective expectations about the length of their work life, raises the probability of employment, decreases the probability of unemployment, and increases the intensity of job search among the unemployed. Heterogeneity analyses show that the demonstrated employment effects are strongest for women and in occupations with comparatively low physical intensity, i.e., occupations that can be performed at older ages.
    Keywords: retirement policies, employment, DiD
    JEL: J24 J26 H21
    Date: 2023–03
  6. By: Joseph Kopecky Author-1-Name-First: Joseph Author-1-Name-Last: Kopecky (Trinity College Dublin)
    Abstract: A large literature has reopened the secular stagnation hypothesis, first proposed near the end of the great depression as a warning for anemic growth resulting from long run trends in population aging. In this paper, I explore the relationship between population age structure and growth in: investment, consumption and output, in a long run panel of advanced economies. The evidence is largely consistent with proposed channels for secular stagnation. Investment growth, in its level and as a fraction of GDP, appears much stronger in young populations, while facing demographic headwinds in older economies. Consumption and output growth are positively associated with late career workers, with a negative relationship coming from both young and old dependents. Consistent with the recent secular stagnation literature, interest rate channels appear to have strong interactions with population age structures. I find that for investment and output growth, estimated impacts of age-structure are more pronounced in low interest rate environments, with high rates mitigating some of their effect.
    Keywords: Secularstagnation, Demographictransition, populationaging, economicgrowth
    JEL: J11 E20 B22
    Date: 2023–01
  7. By: Layal Christine Lettry (Department of Quantitative Economics)
    Abstract: The anonymous data of the Swiss Pension Register (CCO/FSIO) (PR) are typically used to estimate (in the short, middle and long term) the future revenues and expenditures of the Old-Age and Survivors’ Insurance (OASI). In this perspective, it is essential to have a clear look at the register’s main statistical features. To better understand it and benefit more from its richness, we propose analysing the raw data by an appropriate clustering method.
    Keywords: Kamila; Clustering; R; AVS; AHV; OASI; Swiss Pension Register; FSIO; prediction strength criterion; classification; RAMD; AADR; UniFr
    JEL: C38
    Date: 2023–02–24
  8. By: Carmichael, Donna
    Abstract: The emergence of the asset economy in advanced capitalist countries has enabled significant asset accumulation by high‐wealth individuals, and the rise of finance has provided new, profitable investment vehicles for those with investable capital. This accumulation process has been described as a form of compensatory logic to achieve protection from future risks, especially in the current neoliberal environment with governments reducing state pensions while promoting tax‐deductible private investments as a substitute for state provision. This article reports the results of qualitative research into the private wealth accumulation attitudes and behaviours of high‐wealth individuals and their worries about achieving a comfortable retirement despite their substantial wealth holdings. Although the interviewees reside within the top 5% of the wealth distribution in the UK and would be expected to feel confident that their wealth will be sufficient to support their retirement needs, they convey a sense of uneasiness and concern that they will still not have enough to support their expected retirement lifestyles. In response to this perceived risk, these high‐wealth individuals engage in a variety of what I call “de‐risking” behaviours with the goal of mitigating the risk of insufficient wealth to support retirement. The article contributes to our understanding of the processes utilised by high‐wealth individuals to help ensure they have sufficient wealth to support their desired comfortable retirement by engaging in strategies intended to de‐risk their financial lives.
    Keywords: de-risking; financialisation; high‐wealth individuals; inequality; perceived risk; returement; wealth accumulation; de‐risking; retirement
    JEL: N0
    Date: 2023–02–15
  9. By: Elena Bassoli (Paris School of Economics); Agar Brugiavini (Department of Economics, University Of Venice CÃ Foscari; Institute for Fiscal Studies)
    Abstract: This paper brings new evidence on the differences in informal care provision across individuals, supporting the hypothesis that women and the “young old†people are more likely to be caregivers. We exploit exogenous changes in the demand for care following the COVID-19 outbreak and make use of variations in lockdown policies across Europe. We use the SHARE Corona survey, which involves about 50000 respondents of age 50 and over in 28 countries and has detailed information on the provision of care, characteristics of the caregiver and of the care recipient. We link the SHARE Corona Survey data with an individual specific “stringency index†, which measures the intensity of the lockdown policies and the degree of individual’s exposure to these restrictions. We propose a new methodology to measure the degree of rationing of care that older people experienced during the pandemic (and after) and find that women and people in the age group 50-65 were indeed more likely to provide help/care, and also document the multi-facet interaction with the labour market status of caregivers.
    Keywords: informal care, care provision, caregiver, gender, women, COVID-19, SHARE data, SHARE-COVID-19
    JEL: D1 I14 I18 J14 J16
    Date: 2023
  10. By: N.BECHICHI (Insee); M. FABRE (Insee); T. OLIVIA (Insee)
    Abstract: Ce document de travail détaille l’exercice de projection de la population active en France par âge quinquennal à l’horizon 2080. Cet exercice s’appuie sur le scénario central des dernières projections de la population (Algava et Blanpain, 2021a, b). Jusqu’à 55 ans, le taux d’activité est projeté en prolongeant les tendances observées. Pour les tranches d’âge supérieures à 55 ans, le taux d’activité est projeté à l’aide du modèle de microsimulation Destinie (Blanchet et al., 2011) de manière à tenir compte de l’influence des règles de liquidation des pensions sur les comportements d’activité des seniors. L’ensemble des hypothèses et scénarios retenus dans le cadre de ces projections de population active a été validé au sein d’un groupe de travail réunissant des experts de différents organismes. La population active devrait continuer de progresser durant les deux décennies à venir mais à un rythme plus lent que lors de la décennie passée : + 20 000 actifs par an en moyenne jusqu’en 2040 contre + 90 000 actifs par an en moyenne entre 2011 et 2021. Dans ce scénario, la tendance s’inverserait à partir de 2040, avec une baisse annuelle moyenne d’environ 50 000 personnes actives jusqu’en 2050. La baisse s’atténuerait ensuite jusqu’en 2065 avant de s’intensifier à nouveau pour atteindre un rythme d’environ – 80 000 personnes par an en moyenne entre 2065 et 2080. Ainsi, en raison du vieillissement de la population et de la baisse du taux d’activité global qu’il engendre, la population active passerait par un pic de 30, 5 millions d’actifs en 2040 avant de décroître jusqu’à 28, 3 millions d’actifs à l’horizon de projection en 2080.
    Keywords: Projections, Population active, Démographie, Vieillissement
    JEL: J11 J14 J21
    Date: 2022
  11. By: MARISCAL-DE-GANTE Álvaro; PALENCIA ESTEBAN Amaia (European Commission - JRC); GRUBANOV-BOSKOVIC Sara; FERNANDEZ MACIAS Enrique (European Commission - JRC)
    Abstract: This paper presents new evidence on the interaction between demographic and occupational change in Europe over the last 25 years. We use data from the European Union Labour Force Survey covering six European countries to make the results representative of the different EU institutional families. The analysis is based on a cross-sectional comparison between the population and employment distributions in 1995 and 2019. This strategy allows us to study the changing demographic dynamics, which have brought a more feminised, aged and educated working population, in a context of structural employment change, where higher job polarisation or occupational upgrading are the main patterns. The results indicate that the increasing female participation has been accompanied by job polarisation, driven especially by the expansion of low-paid jobs among women. Although educational upgrading was particularly relevant for females, a multinomial logistic regression shows that occupational returns to education have declined more for women than men. Finally, despite the fact that the share of young (old) workers has decreased (increased), the occupational profile has changed similarly for both groups and the gender-based differences remain regardless of their age.
    Keywords: demographic change, labour markets, European Union, gender gap
    Date: 2023–03
  12. By: Axana Dalle; Philippe Sterkens; Stijn Baert (-)
    Abstract: Many OECD countries invest heavily in labour-market programsto prolong careers. Although active labourmarket programs designed for this purpose have frequently been evaluated, less is known about the employment impact of more passive regimes that make labour-market participation later in life feasible. This study focuses on the latter by investigating the hiring opportunities of senior job candidates who partake in a system that ensures older labour-market participants a company supplement in addition to unemployment benefits when they are dismissed. Therefore, we conduct a state-of-the-art scenario experiment in which 360 genuine recruiters evaluate fictitious job candidates who have spent varying durations unemployed in regimes with and without the company supplement. Because they evaluate candidates with respect to both hireability and productivity perceptions, we can identify the mechanisms at play. Overall, we find no evidence of employer-side stigma hindering the re-employment of older unemployed in the program. On the contrary, the longer-term unemployed even benefit – in terms of hiring chances – from partaking in this regime because it seemingly mitigates the regular stigmatisation of long-term unemployment, especially for men. More concretely, recruiters judge the long-term unemployed more mildly, especially with respect to perceived flexibility, when they receive the company supplement and still apply.
    Keywords: Hiring discrimination; Signalling effect; Income support; Labour market program; Vignettes
    JEL: J71 J32 J14
    Date: 2023–04
  13. By: Jonathan Gruber; David H. Howard; Jetson Leder-Luis; Theodore L. Caputi
    Abstract: The Medicare hospice program is intended to provide palliative care to terminal patients, but patients with long stays in hospice are highly profitable, motivating concerns about overuse among the Alzheimer’s and Dementia (ADRD) population in the rapidly growing for-profit sector. We provide the first causal estimates of the effect of for-profit hospice on patient spending using the entry of for-profit hospices over twenty years. We find hospice has saved money for Medicare by offsetting other expensive care among ADRD patients. As a result, policies limiting hospice use including revenue caps and anti-fraud lawsuits are distortionary and deter cost-saving admissions.
    JEL: H51 I13 K4
    Date: 2023–03
  14. By: Ángel de la Fuente
    Abstract: La presente nota se presentan estimaciones de los efectos de las principales medidas adoptadas en las distintas fases de la reforma sobre los ingresos y los gastos delsistema. Los cálculos, ciertamente, están hechos con prisa por las restricciones de tiemposimpuestas por la tramitación del RDL.
    Date: 2023–03

This nep-age issue is ©2023 by Claudia Villosio. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.