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on Economics of Ageing |
| By: | Zheng, Yeqiu; Gu, Yan; van Soest, Arthur |
| Abstract: | We study pension planning and financial wealth of natives and immigrants (N=1177) in the Netherlands, in relation to their temporal values (past/future-focused), financial knowledge, IQ, and other individual characteristics. We find that, compared to natives, immigrants are less financially literate and rely more on the government for their retirement income, but are more future-focused and think more about their retirement. Second, controlling for financial knowledge, IQ, saving intention, health, self-control and demographic factors, temporal values help to predict many aspects of pension planning: how much people think about retirement, their desired retirement age, whether they develop a plan to save for retirement, perceived saving adequacy, and home ownership. Furthermore, temporal values predict savings and financial wealth in 2016 and 2020, even after controlling for the financial situation in 2016. In conclusion, habitually attending to the past leads people to give less priority to the future compared to the past, which has consequences for people’s planning and behaviour such as retirement planning and financial well-being. Our results have strong implications for policies related to pension communication and contribute to the theory on relationships between economic decisions, time and cognition. |
| Date: | 2023–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:6cwk7&r=age |
| By: | Moghadam, Hamed Markazi; Puhani, Patrick; Tyrowicz, Joanna |
| Abstract: | To determine how wives' and husbands' retirement options affect their spouses' (and their own) labour supply decisions, we exploit (early) retirement cutoffs by way of a regression discontinuity design. Several German pension reforms since the early 1990s have gradually raised women's retirement age from 60 to 65, but also increased ages for several early retirement pathways affecting both sexes. We use German Socio-Economic Panel data for a sample of couples aged 50 to 69 whose retirement eligibility occurred (i) prior to the reforms, (ii) during the transition years, and (iii) after the major set of reforms. We find that, prior to the reforms, when several retirement options were available to both husbands and wives, both react almost symmetrically to their spouse reaching an early retirement age, that is both husband and wife decrease their labour supply by about 5 percentage points when the spouse reaches age 60. This speaks in favour of leisure complementarities. However, after the set of reforms, when retiring early was much more difficult, we find no more significant labour supply reaction to the spouse reaching a retirement age, whereas reaching one's own retirement age still triggers a significant reaction in labour supply. Our results may explain some of the diverse findings in the literature on asymmetric reactions between husbands and wives to their spouse reaching a retirement age: such reactions may in large parts depend on how flexibly workers are able to retire. |
| Keywords: | Retirement Coordination, Labour Market Participation, Household Decisions, Regression Discontinuity Design |
| JEL: | J22 J26 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2023:04&r=age |
| By: | Irene Ferrari; Jan Kabátek; Todd Morris |
| Abstract: | Government policies are encouraging older workers to delay retirement, which may curb younger workers’ career advancement. We study a Dutch reform that raised the retirement age by 13 months and nearly tripled employment at age 66. Using monthly linked employer-employee data, we show that affected firms delay and decrease replacement hiring, and coworkers’ earnings fall via reductions in hours worked, wages, and promotions. Combined, the hiring and coworker spillovers offset most of the additional hours worked by older workers, disproportionately affect career advancement for younger workers and women, and considerably increase the policy’s ratio of welfare costs to fiscal savings. |
| Keywords: | retirement reform; labor demand; internal labor markets; firms; coworker spillovers |
| JEL: | H55 J23 J26 J63 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:rsi:irersi:14&r=age |
| By: | Carl Emmerson (Institute for Fiscal Studies); Jonathan Cribb (Institute for Fiscal Studies); Laurence O'Brien (Institute for Fiscal Studies) |
| Date: | 2022–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:07/22&r=age |
| By: | Yingying Zhang; Steve Bradley; Robert Crouchley |
| Abstract: | Mental health problems and severe cognitive decline can affect individual behaviours and physical health, cause adverse outcomes and generate significant economic costs for the society. In this paper we contribute to the existing literature by investigating long-term retirement effects on individual health outcomes for a developing country – China. Specifically, we examine the cumulative effect of years in retirement on cognitive functioning, measured by scores in cognitive tests such as word recall test and numeracy test, separately for men and women in China. Identifying such effects can be challenging due to endogeneity issues. To overcome this problem, we use different mandatory retirement ages as instruments for blue-collar and white-collar workers using three waves (2011-2015) of data from the national China Health and Retirement Longitudinal Study. Bivariate random-effect Tobit models are estimated, which also allows us to account for the left censored nature of retirement duration. We find that retirement duration is endogenous to men’s scores in memory tests. After accounting for the observed and unobserved confounding factors, we find that one additional year in retirement reduces the number of words men recalled immediately and 10 minutes later by 0.9% and 1.7%, respectively. The effects for women are much smaller - only 25-35% of those for men. One more year in retirement reduces men’ scores in numeracy test by 0.5%, and scores in mental intactness test by 0.3%, but the effect on women’s scores are statistically insignificant. We also explore the underlying mechanisms for these effects by examining participation in various physical and social activities post-retirement. |
| Keywords: | Retirement Duration, Cognitive Decline, Gender Differences |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:379420912&r=age |
| By: | Alinaghi, Nazila; Creedy, John; Gemmell, Norman |
| Abstract: | This paper uses a new longitudinal dataset, containing information about the incomes of New Zealand individuals, to examine the form of cohort age-income profiles. A model of the variation in mean log-earnings with age, allowing for quadratic age and linear time effect, is estimated separately for males and females, along with a range of other demographic groups. An 'overtaking' property, whereby more recent cohorts have higher real income than older cohorts, at comparable ages, are found in all cases. Cubic profiles of the variation in the variance of log-income with age are also estimated. Examples of the projected changing distribution of income with age are given, for various cohorts aged 20 in 2020. |
| Keywords: | Taxable income, Age-income profiles, Cohort incomes, New Zealand, |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:vuw:vuwcpf:22550&r=age |
| By: | Angel de la Fuente |
| Abstract: | En este informe se analizan las implicaciones financieras para el sistema público de pensiones de los nuevos incentivos para el alargamiento voluntario de las vidas laborales y de la reforma del sistema de cotización de los trabajadores autónomos. Mis estimaciones sugieren que, si ambas reformas funcionan bien, su efecto conjunto podría contribuir significativamente a mitigar el deterioro de las cuentas del sistema público de pensiones a corto y medio plazo, pero no a largo plazo. El ahorro neto alcanzaría un punto de PIB a comienzos de la próxima década y se iría reduciendo después, convirtiéndose en negativo a partir de 2050. Su valor esperado en promedio durante el período 2022-50 sería de medio punto de PIB, un alivio apreciable pero insuficiente para evitar que el déficit del sistema de pensiones se dispare en las próximas décadas en ausencia de medidas adicionales |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaeee:eee2023-11&r=age |
| By: | Breen, Casey |
| Abstract: | Owning a home has long been touted as a key component of the idealized “American Dream.” Homeownership is associated with greater wealth and better health, but the causal impact of homeownership on health remains unclear. Using linked complete-count census and Social Security mortality records, we document Black-White disparities in homeownership rates and produce the first U.S.-based estimates of the association between homeownership in early adulthood and longevity. We then use a sibling-based identification strategy to estimate the causal effect of homeownership on longevity for cohorts born in the first two decades of the 20th century. Our results indicate homeownership has a significant positive impact on longevity, which we estimate at approximately 0.4 years. |
| Date: | 2023–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:7ya3f&r=age |
| By: | Breen, Casey; Seltzer, Nathan (University of California, Berkeley) |
| Abstract: | How accurately can age of death be predicted using basic sociodemographic characteristics? We test this question using a large-scale administrative dataset combining the complete count 1940 Census with Social Security death records. We fit eight machine learning algorithms using 35 sociodemographic predictors to generate individual-level predictions of age of death for birth cohorts born at the beginning of the 20th century. We find that none of these algorithms are able to explain more than 1.5% of the variation in age of death. Our results suggest mortality is inherently unpredictable and underscore the challenges of using algorithms to predict major life outcomes. |
| Date: | 2023–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:znsqg&r=age |
| By: | Creedy, John; Subramanian, S. |
| Abstract: | This paper uses the concept of the M-Curve, which plots the cumulative proportion of deaths against the corresponding cumulative proportion of the population (arranged in ascending order of age), and associated measures, to examine mortality experience in India. A feature of the M-curve is that it can be combined with an explicit value judgement (an aversion to early deaths) in order to make welfare-loss comparisons. Empirical comparisons over time, and between regions and genders, are made. Furthermore, in order to provide additional perspective, selective results for the UK and New Zealand are reported. It is also shown how the M-curve concept can be used to separate the contributions to overall mortality of changes over time (or differences between population groups) to the population age distribution and age-specific mortality rates. |
| Keywords: | Mortality Curve, Mortality-inefficiency measure, Crude Death Rate, Lorenz Curve, Age-distribution of population, Age-specific death rates, M-Curve comparisons, Decomposition, Age and fatality effects, Decomposition, Mean and dispersion effects, |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:vuw:vuwcpf:22007&r=age |