nep-age New Economics Papers
on Economics of Ageing
Issue of 2023‒07‒24
seven papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. The Impact of Pension Reform on Employment, Retirement and Disability Insurance Claims By Hernaes, Erik; Markussen, Simen; Piggott, John; Røed, Knut
  2. Social security reforms, retirement and sectoral decisions By Delalibera, Bruno Ricardo; Ferreira, Pedro Cavalcanti; Parente, Rafael Machado
  3. The Effect of Increasing Retirement Age on Households’ Savings and Consumption Expenditures By Stefan Etgeton; Björn Fischer; Han Ye
  4. Pay-as-they-get-in: Attitudes towards Migrants and Pension Systems By Tito Boeri; Matteo Gamalerio; Massimo Morelli; Margherita Negri
  5. Economic models of care for dependent elderly people in OECD countries By Arnaud Le Van
  6. How the Well-Being Function Varies with Age: The Importance ofIncome, Health, and Social Relations over the Life Cycle By Juergen Bitzer; Erkan Goeren; Heinz Welsch
  7. Cross-Country Performance in Social Integration of Older Migrants – A European Perspective By Caroline Berchet; Nicolas Sirven

  1. By: Hernaes, Erik (Ragnar Frisch Centre for Economic Research); Markussen, Simen (Ragnar Frisch Centre for Economic Research); Piggott, John (University of New South Wales); Røed, Knut (Ragnar Frisch Centre for Economic Research)
    Abstract: We evaluate a comprehensive reform of Norwegian early retirement institutions in 2011 through the lens of a parsimonious random utility choice model. The reform radically changed work incentives and/or pension access-age for some (but not all) workers. We find that improved work incentives caused employment to rise considerably, at the expense of both early retirement and exits through disability insurance. Lower access-age to own pension funds caused a small increase in employment and a large drop in disability program participation. Properly designed pension reforms thus need to take the interplay between old age pension and disability insurance programs into account.
    Keywords: pension reform, disability insurance, program substitution
    JEL: H55 J22
    Date: 2023–06
  2. By: Delalibera, Bruno Ricardo; Ferreira, Pedro Cavalcanti; Parente, Rafael Machado
    Abstract: In many countries, the regulations governing public and private pension systems, hiring procedures, and job contracts differ. Public sector employees tend to have longer tenures and higher wages compared to workers in the private sector. As such, social security reforms can affect both retirement decisions and sectoral choices. We study the effects of social security reforms on retirement and sectoral behavior in an economy with multiple pension systems. We develop a life-cycle model with three sectors - private formal, private informal and public - and endogenous retirement. In a model calibrated to Brazil, we quantitatively assess the long-run effects of reforms being discussed and implemented across countries. Among them, we study the unification of pension systems and increasing the minimum retirement age. We find that these reforms affect the decision to apply to a public job, the profile of savings over the life cycle, and informality. In the long run, these reforms lead to higher output and capital, reduced informality, and average welfare gains. They also drastically reduce the social security deficit.
    Date: 2023–07–06
  3. By: Stefan Etgeton; Björn Fischer; Han Ye
    Abstract: This paper examines how households adjust their savings and consumption expenditure in response to an anticipated increase in the early retirement age (ERA). We examine the 1999 pension reform in Germany, which increased the ERA for women born after 1951 by at least three years. First, we present suggestive evidence that women update their retirement planning in response to the reform. Using the German Income and Consumption Survey, we find a negative impact on private savings of 0.6 percentage points that is driven by households with married women. We show that households consisting of highly educated women and homeowners are more likely to reduce their savings rates. Furthermore, we find that the treated households increase their leisure spending while maintaining an unchanged level of disposable income. Our findings suggest that the households anticipate experiencing a lifetime income increase and reduce their savings rate to smooth consumption.
    Keywords: Pension Reform; Early Retirement Age; Savings; Pension Wealth; Consumption Expenditur
    JEL: D14 J14 J26
    Date: 2023–03
  4. 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 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
  5. By: Arnaud Le Van (ICT - Institut Catholique de Toulouse, TR3 Céres - Éthique, Humanité et Vulnérabilités - Céres - UR Céres (Culture, Éthique, Religion Et Société) - ICT - Institut Catholique de Toulouse)
    Abstract: Résumé : Dans les décennies à venir, le vieillissement des populations mettra à l'épreuve les systèmes de prise en charge. Le vieillissement de la population conjugué à l'affaiblissement des solidarités familiales, lui-même lié au travail des femmes et à l'urbanisation croissante, font de la prise en charge de la dépendance des personnes âgées un problème commun à tous les pays de l'OCDE. Pour faire face à cette question commune, les pays de l'OCDE mettent en place des stratégies nationales différentes. Pour mieux comprendre, d'un point de vue macro-économique, les politiques menées dans les différents pays en faveur des personnes en perte d'autonomie et leur « générosité », nous avons confronté les dispositifs de prises en charges avec l'investissement que représentent les dépenses de soins de longue durée par rapport au PIB. Cette analyse permet de dégager deux visions différentes (vision inclusive et vision individuelle) qui constituent des tendances structurant les politiques au sein des pays de l'OCDE et de faire émerger les 4 principaux modèles à savoir modèle familialiste, universel, hybride et d'assurance. Nous observons que la France propose quant à elle un croisement entre vision inclusive et individuelle.
    Keywords: Personnes âgées dépendante, financement, modèle
    Date: 2023–06–09
  6. By: Juergen Bitzer (University of Oldenburg, Department of Economics); Erkan Goeren (university of Oldenburg, Department of Economics); Heinz Welsch (University of Oldenburg, Department of Economics)
    Abstract: Previous literature has identified income, poor health and social relationships as the most important predictors of subjective well-being (SWB). In addition, the literature has identified a non-linear relationship between age and SWB, with a dip in SWB in mid-life. Explanations of the non-linear age-SWB relationship include the notion of unmet aspirations and the idea that people’s emotional response to the drivers of SWB changes with age. Against this background, we use representative longitudinal data for Germany (1992- 2019) with about 570, 000 observations for more than 88, 000 individuals aged 16-105 years to investigate if and how the association between SWB and its main predictors changes over the life cycle. Using fixed effects estimation to control for cohort effects and unobserved personal characteristics, we find that the marginal effects of income and social relationships vary with age in a wave-like fashion, while the negative marginal effect of poor health increases monotonically and progressively with age. Our results are similar for alternative measures of SWB (life satisfaction and living in misery) and for men and women. The agerelated changes in the importance of income and social relationships for SWB found in this paper help to explain the relationship between age and SWB found in previous literature.
    Keywords: subjective well-being; life satisfaction; life cycle happiness; income; health;social relations; employment
    Date: 2023–07
  7. By: Caroline Berchet (Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Nicolas Sirven (IRDES - Institut de Recherche et Documentation en Economie de la Santé - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres)
    Abstract: This paper provides new empirical evidence on the relationship between migration and social integration. It explores the hypothesis that migrants essentially differ from non-migrants with regard to the length of residence in the country – which is a proxy of migrants' social distance to natives. The determinants of social participation and interpersonal trust are examined at both the individual and institutional level. Using SHARE data and macroeconomic series, we first analyse the influence of migratory status and immigrant length of stay in the host country on social integration indicators. We then examine the role institutional characteristics play on cross-country differences in speed of social integration (i.e. immigrants' propensity to social participation according to their length of stay in the host country). As expected, the immigrant population presents a lower likelihood than the native population to get involved in social activities and to trust other people. Nevertheless, the more immigrants have spent time in the host country, the more they take part in social activities. The analysis also reveals significant cross-country differences in immigrants' speed of social integration. Macroeconomic series like the GINI coefficient of income inequality and the Corruption perceived index could explain these differences. From a public policy perspective, our results suggest that immigrants' social integration is more rapidly achieved in "fair" countries – i.e. those with a more favourable social environment – where the levels of income inequality and perceived corruption are lower.
    Abstract: L'objet de cette étude est d'analyser les relations entre la migration et l'intégration sociale. Notre analyse se propose d'étudier l'hypothèse selon laquelle l'intégration sociale des immigrés diffère essentiellement de celle des natifs en raison de la durée de résidence dans le pays d'accueil, facteur qui constitue dans notre analyse un indicateur de la distance sociale des migrants aux natifs. Les déterminants de la participation sociale et de la confiance interpersonnelle sont analysés au niveau individuel et institutionnel. À partir des données de l'enquête SHARE, complétées par des séries macroéconomiques, nous analysons dans un premier temps l'influence de la durée de résidence dans le pays d'accueil des immigrés sur les deux indicateurs d'intégration sociale. Nous étudions ensuite le rôle joué par les caractéristiques institutionnelles sur les différences de vitesse d'intégration entre les pays européens (i.e. la probabilité d'un immigré d'être intégré selon sa durée de résidence dans le pays d'accueil). Les résultats indiquent que la population immigrée présente une plus faible probabilité que la population native de participer à des activités collectives et d'avoir confiance en autrui. Cependant, l'intégration sociale des immigrées s'accroit avec la durée de résidence dans le pays d'accueil mais l'analyse révèle, par ailleurs, des différences de vitesse d'intégration entre les pays européens. Ces différences sont expliquées par les séries macroéconomiques telles que le coefficient de GINI et l'indice de corruption. D'un point de vue des politiques publiques, nos résultats suggèrent que l'intégration sociale des immigrés est plus rapide dans les sociétés caractérisées par un environnement social favorable, où les niveaux d'inégalité de revenu et de corruption sont faibles.
    Keywords: Social capital, Ageing, Income inequality, Multilevel models
    Date: 2023–05–23

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