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on Economics of Ageing |
| By: | Jonas Kolsrud; Camille Landais; Daniel Reck; Johannes Spinnewijn |
| Abstract: | This paper analyzes consumption to evaluate the distributional effects of pension reforms. Using Swedish administrative data, we show that on average workers who retire earlier consume less while retired and experience larger drops in consumption around retirement. Interpreted via a theoretical model, these findings imply that reforms incentivizing later retirement incur a substantial consumption-smoothing cost. Turning to other features of pension policy, we find that reforms that redistribute based on early-career labor supply would have opposite-signed redistributive effects, while differentiating on wealth may help to target pension benefits toward those who are vulnerable to larger drops in consumption around retirement. |
| JEL: | H55 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31628&r=age |
| By: | András Simonovits (Centre for Economic and Regional Studies) |
| Abstract: | As part of the Recovery and Resilience Plan (RRP, 2023), the Hungarian government pledged to reform the pension system. The main themes are sustainability and adequacy. The pension plan is to be discussed publicly and put into law by March 2025. The last detailed official pension study was the 2016-discussion paper of the Hungarian National Bank which should be updated. The present study is a private work which may contribute to the improvement of the current pension system. The current and the projected states of the Hungarian pension system are outlined, and then simple and complex reforms are formulated. Naming just two reform steps, I start with the simplest step: the return to public discussion steered by a revitalized Fiscal Council and end with the most complex: the introduction of the flexible (variable) retirement age. |
| Keywords: | Keywords: pension systems, pension policies, pension reforms, Hungary |
| JEL: | H55 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2324&r=age |
| By: | Frederico Pinheiro; Onofre Alves Simões |
| Abstract: | Ageing of the populations is leading to reforms in Social Security systems with a negative impact on post retirement income. One way to minimize this is to reinforce the role of complementary pension schemes, and pension projections can be an important tool to assist workers in making their decisions on saving for retirement. The topic has been discussed by the European Union (EU) and the European Insurance and Occupational Pensions Authority (EIOPA). This work focuses on a tool for making pension projections in the scope of occupational defined contribution pension schemes, based on EIOPA’s guidance. We aim to study the potential performance of different investment strategies using an Economic Scenario Generator framework and evaluate the impact on the retirement income that such investment strategies produce, under different assumptions. The model underlying the tool takes in three main risk factors: the financial market risk, which includes uncertainty over returns on investments, inflation and interest rates; the labor risk, originated from uncertainty over real wage growth paths; the demographic risk, as a result of the increasing life expectancy. |
| Keywords: | Retirement income, Pension projection, Economic scenario generator, Life tables, Real-world valuation, EIOPA |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp02882023&r=age |
| By: | Todd Morris; Benoit Dostie |
| Abstract: | We study the welfare implications of employment protection for older workers, exploiting recent bans on mandatory retirement across Canadian provinces. Using linked employeremployee tax data, we show that the bans cause large and similar reductions in job separation rates and retirement hazards at age 65, with further reductions at higher ages. The effects vary substantially across industries and firms, and around two-fifths of the adjustments occur between ban announcement and implementation dates. We find no evidence that the demand for older workers falls, but the welfare effects are mediated by spillovers on savings behavior, workplace injuries, and spousal retirement timing. Nous étudions les répercussions de la protection de l’emploi sur le bien-être des travailleurs âgés, en exploitant les récentes interdictions de la retraite obligatoire dans les provinces canadiennes. À l’aide de données fiscales couplées sur les employés et les employeurs, nous montrons que les interdictions entraînent des réductions importantes et similaires aux taux de cessation d’emploi et des risques de retraite à l’âge de 65 ans, et d’autres réductions à des âges plus élevés. Les effets varient considérablement d’une industrie et d’une entreprise à l’autre, et environ les deux cinquièmes des ajustements surviennent entre l’annonce de l’interdiction et les dates de mise en œuvre. Nous ne trouvons aucune preuve que la demande de travailleurs âgés diminue, mais les effets sur le bien-être sont atténués par les retombées sur le comportement d’épargne, les blessures en milieu de travail et le moment où le conjoint prend sa retraite. |
| Keywords: | employment protection, retirement, welfare, active and passive savings responses, health effects, spousal spillovers, protection de lâemploi, retraite, bien-être social, épargne active et passive, effets sur la santé, retombées pour le conjoint |
| JEL: | J26 J78 H55 |
| Date: | 2023–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2023s-20&r=age |
| By: | Henrique Ferreira Morici; Elena Vigna |
| Keywords: | Stochastic optimal control, dynamic programming, defined contribution pension scheme, additional voluntary contributions, target-based approach, net replacement ratio. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:699&r=age |
| By: | Jean-Marie Dubois (CEREQ - Centre d'études et de recherches sur les qualifications - ministère de l'Emploi, cohésion sociale et logement - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche); Christine Fournier (CEREQ - Centre d'études et de recherches sur les qualifications - ministère de l'Emploi, cohésion sociale et logement - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche); Marion Lambert (CEREQ - Centre d'études et de recherches sur les qualifications - ministère de l'Emploi, cohésion sociale et logement - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche) |
| Abstract: | As the statutory retirement age rises in France, how do employees perceive their careers after the age of 50? Despite popular belief, most of them express a desire to evolve rather than a ‘reluctance to change'. Whether it's a question of progressing internally, upgrading skills or retraining, seniors have plenty of career plans, but there is a lack of appropriate training to support them. |
| Abstract: | Alors que l'âge légal de départ à la retraite s'élève, comment les salariés se projettent-ils professionnellement à partir de 50 ans ? Contrairement à l'idée reçue, la grande majorité d'entre eux témoigne d'une volonté d'évolution bien plus que d'une « résistance au changement ». Qu'il s'agisse de progresser en interne, de monter en compétences ou encore de se reconvertir, ce ne sont pas les projets professionnels qui manquent aux séniors, mais plutôt les formations à même de les soutenir. |
| Keywords: | Access to CVT, CVT Requirement, Occupational paths, Defis Survey, Occupational retraining, Elderly worker, Perception of work, Travailleur âgé, Cheminement professionnel, Représentation du travail, Enquête Defis, Accès à la formation professionnelle, Besoin en formation professionnelle |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-04198745&r=age |
| By: | Wändi Bruine de Bruin (Department of Earth Sciences [USC Los Angeles] - USC - University of Southern California); Aulona Ulqinaku (Leeds University Business School - University of Leeds); Jimena Llopis (CUBIC - Center for Utilizing Behavioural Insights for Children); Matteo Santangelo Ravà (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Numeracy, or the ability to understand and use numbers, has been associated with obtaining better health and financial outcomes. Studies in high-income countries suggest that low numeracy is associated with older age—perhaps especially among individuals with lower education. Here, we examined whether findings generalize to the rest of the world. Methods Gallup surveyed >150, 000 participants for the 2019 Lloyd's Register Foundation World Risk Poll, from 21 low-income, 34 lower-middle income, 42 upper-middle income, and 43 high-income countries. Low numeracy was operationalized as failing to correctly answer, "Is 10% bigger than 1 out of 10, smaller than 1 out of 10, or the same as 1 out of 10?" Results Regressions controlling for participants' education, income, and other characteristics found that, worldwide, low numeracy was associated with older age, lower education, and their interaction. Findings held in each country-income category, although low numeracy was more common in low-income countries than in high-income countries. Limitations Age differences may reflect cohort effects and life span–developmental changes. Discussion Low numeracy is more common among people who are older and less educated. We discuss the need for education and interventions outside of the classroom. Highlights We analyzed a global survey conducted in 21 low-income, 34 lower-middle income, 42 upper-middle income, and 43 high-income countries. Low numeracy was associated with older adult age, even after accounting for age differences in education. Low numeracy was more common in older people with lower education. |
| Keywords: | number ability, cognitive ability, age-related decline |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04185867&r=age |
| By: | Juergen Jung (Department of Economics, Towson University); Chung Tran (Research School of Economics, The Australian National University) |
| Abstract: | We investigate implications of health heterogeneity for savings, portfolio choice, wealth accumulation and inequality over the lifecycle. We first use the Health and Retirement Study 1992–2018 and document the effects of exposure to poor health during the peak earnings period between age 45 and 55 on the lifecycle patterns of savings and the composition of the wealth portfolio at retirement. We then quantify these dynamic effects using a structural lifecycle model with elastic labor supply, asset portfolio choice, and household heterogeneity in health status, health expenditure, health insurance, and earnings ability. We find that the presence of both safe and risky assets with heterogeneous returns introduces a new health-wealth portfolio channel that amplifies the effects of health on wealth accumulation over the lifecycle. We demonstrate that in the absence of the health-wealth portfolio channel, the wealth gap is significantly lower at retirement. Finally, we study the importance of health insurance in reducing wealth inequality by mitigating exposure to health expenditure shocks and encouraging riskier investment choices with higher returns. Our new insights imply that health insurance reforms can have large impacts on wealth inequality reduction in the US. |
| Keywords: | Health and income risks, Health insurance, Heterogeneity, Lifecycle savings, Risky and safe assets, Asset portfolio, Inequality. |
| JEL: | G41 G51 G52 E21 H21 I13 I14 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:tow:wpaper:2023-07&r=age |
| By: | Serdar Ozkan |
| Abstract: | This paper studies differences in health care usage and health outcomes between low- and high-income individuals. Using data from the Medical Expenditure Panel Survey (MEPS) I find that early in life the rich spend significantly more on health care, whereas from midway through life until very old age the medical spending of the poor dramatically exceeds that of the rich. In addition, low-income individuals are less likely to incur any medical expenditures in a given year, yet, when they do incur medical expenditures, the amounts are more likely to be extreme. To account for these facts, I develop and estimate a life-cycle model of two distinct types of health capital: preventive and physical. Physical health capital determines survival probabilities, whereas preventive health capital governs the endogenous distribution of shocks to physical health capital, thereby controlling the life expectancy. Moreover, I incorporate important features of the U.S. health care system such as private health insurance, Medicaid, and Medicare. In the model, optimal expected life span is longer for the rich, which can only be achieved by greater investment in preventive health capital. Therefore, as they age, their health shocks grow milder compared to those of the poor, and in turn they incur lower curative medical expenditures. Public insurance for the elderly amplifies this mechanism by hampering the incentives of the poor to invest in preventive health capital. I use the model to examine a counterfactual economy with universal health insurance in which 75% of preventive medical spending is reimbursed on top of existing coverage in the benchmark economy. My results suggest that policies encouraging the use of health care by the poor early in life produce significant welfare gains, even when fully accounting for the increase in taxes required to pay for them. |
| Keywords: | health production; health inequality; health reform; social insurance |
| JEL: | D52 D91 E21 E61 E65 I12 I14 |
| Date: | 2023–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:96848&r=age |