nep-age New Economics Papers
on Economics of Ageing
Issue of 2023‒09‒25
seven papers chosen by
Claudia Villosio, LABORatorio R. Revelli

  1. Population Aging and Economic Growth: From Demographic Dividend to Demographic Drag? By Rainer Kotschy; David E. Bloom; Rainer Franz Kotschy
  2. Occupational Retirement and Pension Reform: The Roles of Physical and Cognitive Health By Jiayi Wen
  3. Long-run consequences of informal elderly care and implications of public long-term care insurance By Korfhage, Thorben; Fischer-Weckemann, Björn
  4. ‘Relabelling’ of individual retirement pension in Finland: application and behavioural responses using Finnish register data. By Kanabar, Ricky; Nivalainen, Satu; Järnefelt, Noora
  5. Interrogating the political economy of age By Alexander Shaw, Kate
  6. The Growing Gap of Unmet Need: Assessing the Demand for, and Supply of, Home-Based Support for Older Adults with Disabilities in 31 Countries By Qian, Yuting; Chen, Shanquan; Lin, Zhuoer; Yu, Zexuan; Wang, Mengxiao; Hou, Xiaohui; Chen, Xi
  7. This paper analyses social inequality in adult mortality over the last 500 years in rural Aragon (Spain). It uses individual-level microdata corresponding to more than 20, 000 individuals whose socioeconomic status, age at death and other family, cultural and environmental variables are known. Using advanced statistical techniques (mainly event history analysis), it follows all individuals who died after the age of seven years in 17 villages throughout their lives. This study is focused on observing the evolution of inequality in mortality by SES over a period of 500 years, deepening and relating it to the debates present in the historiography. As it is a pioneer study in connecting adult mortality with SES for almost five centuries, it enables us to verify the persistence of social inequality in death in rural Spain, which contrasts with the results obtained in northern European countries where these differences only emerged from the late nineteenth or early twentieth century onwards. By Francisco J. Marco-Garcia; Víctor A. Luque de Haro

  1. By: Rainer Kotschy; David E. Bloom; Rainer Franz Kotschy
    Abstract: This paper examines the extent to which changes in working-age shares associated with population aging might slow economic growth in upcoming years. We first analyze the economic effects of changing working-age shares in a standard empirical growth model using country panel data from 1950–2015. We then juxtapose the estimates with predicted shifts in population age structure to project economic growth in 2020–2050. Our results indicate that population aging will slow economic growth throughout much of the world. Expansions of labor supply due to improvements in functional capacity among older people can cushion much of this demographic drag.
    Keywords: population health, life expectancy, prospective aging, labor supply, economic development
    JEL: J11 O11 O47
    Date: 2023
  2. By: Jiayi Wen
    Abstract: Despite increasing cognitive demands of jobs, knowledge about the role of health in retirement has centered on its physical dimensions. This paper estimates a dynamic programming model of retirement that incorporates multiple health dimensions, allowing differential effects on labor supply across occupations. Results show that the effect of cognitive health surges exponentially after age 65, and it explains a notable share of employment declines in cognitively demanding occupations. Under pension reforms, physical constraint mainly impedes manual workers from delaying retirement, whereas cognitive constraint dampens the response of clerical and professional workers. Multidimensional health thus unevenly exacerbate welfare losses across occupations.
    Date: 2023–08
  3. By: Korfhage, Thorben; Fischer-Weckemann, Björn
    Abstract: We estimate a dynamic structural model of labor supply, retirement, and informal care supply, incorporating labor market frictions and the German tax and benefit system. We find that in the absence of Germany's public long-term insurance scheme, informal elderly care has adverse and persistent effects on labor market outcomes and, thus, negatively affects lifetime earnings and future pension benefits. These consequences of caregiving are heterogeneous and depend on age, previous earnings, and institutional regulations. Policy simulations suggest that public long-term care insurance policies are fiscally costly and induce negative labor market effects. But we also show that they can offset the personal costs of caregiving to a large extent and increase welfare for those providing care, especially for low-income individuals.
    Keywords: long-term care, informal care, long-term care insurance, labor supply, retirement, pension benefits, dynamic structural model
    JEL: I18 I38 J14 J22 J26
    Date: 2023
  4. By: Kanabar, Ricky; Nivalainen, Satu; Järnefelt, Noora
    Abstract: Using rich Finnish population level registers, we examine the impact of fusing a flexible early retirement pathway with a more stringent pathway, without changing eligibility conditions, socalled ‘relabelling’, on individual application behaviour. Our findings show that among affected cohorts the likelihood of applying for (successfully claiming) disability-related early retirement declined by 1.8 (1.5) percentage points equivalent to a relative drop of approximately 37% (39%) following the reform. Individuals with below tertiary level education and stronger lifetime labour market attachment exhibit a stronger behavioural response to the reform. We find tentative evidence of programme substitution to early retirement pathways designed to keep individuals in the labour market albeit on a part time basis. Our findings suggest that social norms and lack of awareness associated with early retirement pathways can strongly influence application behaviour even when eligibility conditions remain unchanged, offering policymakers novel ways to extend working lives.
    Date: 2023–09–08
  5. By: Alexander Shaw, Kate
    Abstract: This article considers the argument by Tim Vlandas, in this issue, that an ageing electorate may undermine democracies’ ability to make the right economic choices. Vlandas suggests that the emergence of gerontocratic politics may give rise to ‘gerontonomia’: an economy run for the old, at the expense of younger generations and of future prosperity. However, evidence from the UK suggests a more mixed picture. Age-based voting patterns have been consequential around single issues, not least the 2016 Brexit referendum. However, voters’ interests in broad economic policy models are not easily reducible to age dynamics, and intergenerational politics are filtered through a set of normative and affective considerations beyond straightforward self-interest. Moreover, since the rational interests of different age groups do not speak for themselves, cueing by political elites is potentially significant and may be contributing to older voters’ relative tolerance of a poor economic record.
    Keywords: ageing populations; gerontocracy; intergenerational fairness; political economy; UK politics; Wiley deal
    JEL: J1
    Date: 2023–08–18
  6. By: Qian, Yuting (Yale University); Chen, Shanquan (University of Cambridge); Lin, Zhuoer (Yale University); Yu, Zexuan (Brown University); Wang, Mengxiao (World Bank); Hou, Xiaohui (World Bank); Chen, Xi (Yale University)
    Abstract: Providing support to older people with disabilities will increasingly challenge care systems in all countries. Accurately gauging the unmet need is a first step in response. Disability is commonly measured by documenting people's capacity to perform Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs). This study assessed the prevalence and the extent (or severity) of ADL/IADL limitations in 31 countries from 2011 to 2018, together with the availability of support to manage them. The study identified a range of demographic, social, and policy factors that are associated with ADL/IADL limitations and the receipt of assistance among older adults. Results show substantial variation across countries in the prevalence and extent of ADL/IADL limitations and how both prevalence and extent have evolved over time. Country-level differences in socioeconomic conditions, health behaviors, chronic disease prevalence, and the strength of public safety nets are among the primary factors that may help explain these variations. Over the study period, most countries saw a decrease in the share of older adults with ADL/IADL limitations who received assistance, even as the prevalence of ADL/IADL limitations rose in many of those countries. This suggests considerable unmet need for ADL/IADL assistance among older adults in these countries. Specific groups, such as unpartnered males, were less likely to receive help. Countries may improve outcomes by targeting interventions to vulnerable groups. Comparative cross-country data on disability trends open new opportunities for countries to learn from each other's experiences in improving elder care.
    Keywords: global aging, disability, ADL/IADL limitations, unmet need, elder care
    JEL: J14 J18 I11 I18
    Date: 2023–08
  7. By: Francisco J. Marco-Garcia (Universidad de Zaragoza); Víctor A. Luque de Haro (University of Almería)
    Keywords: Adult mortality, socioeconomic differences, inequality, Spain
    JEL: I14 N33 J11
    Date: 2023–08

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