nep-age New Economics Papers
on Economics of Ageing
Issue of 2023‒10‒23
five papers chosen by
Claudia Villosio, LABORatorio R. Revelli

  1. The Impacts of Racial Differences in Economic Challenges on Housing, Wealth, and Economic Security Among OASI Beneficiaries By Francis Wong; Kate Pennington; Amir Kermani
  2. Revisiting the Conventional Wisdom of Development, Sustainability and Happy Ageing: The Case of Thailand’s Data By Euamporn Phijaisanit
  3. The effects of pension reforms on physician labour supply: Evidence from the English NHS By Carol Propper; George Stoye; Max Warner
  4. An Empirical Analysis of the Impact of Employee Aging on Innovation and Productivity (Japanese) By FUKAO Kyoji; KIM YoungGak; KWON Hyeog Ug
  5. Health externalities to productivity and efficient health subsidies By Siew Ling Yew; Jie Zhang

  1. By: Francis Wong; Kate Pennington; Amir Kermani
    Abstract: Housing wealth comprises 40 percent of the net wealth of retirement-age Americans, 43 percent of whom have not yet paid off their mortgages. This report analyzes two research questions. First, we evaluate the extent to which Old-Age and Survivors Insurance (OASI) benefits advance economic security and racial equity among homeowners. Our use of linked administrative data facilitates a comparative analysis of economic well-being measures before and after homeowners became eligible for OASI benefits. Second, we analyze how racial disparities in job losses during working years contribute to racial differences in economic security at retirement, focusing particularly on exposure to distressed home sales. Utilizing confidential taxpayer microdata, we assess racial discrepancies in the incidence of job loss, distressed sales, and wealth destruction due to distressed sales. Our findings imply that racial/ethnic differences in wealth at retirement are at least partly attributable to differences in labor market experiences. In terms of policy implications, our findings provide support for policies that mitigate employment and income instability during working years. Such policies are likely to have effects that accumulate throughout the life cycle and can mitigate racial/ethnic differences in wealth at retirement.
    Date: 2023–09
  2. By: Euamporn Phijaisanit (Faculty of Economics, Thammasat University)
    Abstract: This study revisits the conventional wisdom of development, sustainability and happy ageing. The first part explores the existing research frontier on how happiness proceeds with age and assimilates different notions of happiness which influence public policies and global demands. The second part extracts the statistics from the National Statistical Office’s 2021 Survey of the Older Persons in Thailand and presents stylised facts about the characteristics of Thailand’s ageing population in connection with the United Nations Sustainable Development Goals (SDGs). The third part examines happiness in older persons using ordered logistic regression. Happiness is represented by the reported scale based on the respondent’s own value judgment. The finding reveals that the happiness level significantly reflects socio-economic and health well-being and, thus, can potentially be intervened by political commitment and suitable public policies in concert with the SDGs. Happiness can be considered both as an outcome and a useful success indicator of public policies. However, the criteria for happiness can be very subjective. The public sectors must take precautions against political bias and inefficiency in incorporating old-age happiness into their development agenda. An effective policy coherence, particularly in Non-High- Income Countries (NHICs), requires a thorough understanding of old-age happiness in a more local areaspecific context which is an attempt of this study. Policy recommendations from the findings are summoned into four arenas, namely: (i) policy on education and lifelong learning, (ii) policy on income and old-age employment, (iii) policy on healthcare, public services and revenue raising, and (iv) policy on local area disparity.
    Keywords: ageing, old-age happiness, sustainable development, public policy, SDGs
    JEL: F13 F16 O53
    Date: 2022–01
  3. By: Carol Propper (Institute for Fiscal Studies); George Stoye (Institute for Fiscal Studies); Max Warner (Institute for Fiscal Studies)
    Date: 2023–09–29
  4. By: FUKAO Kyoji; KIM YoungGak; KWON Hyeog Ug
    Abstract: Against the background of Japan's rapidly aging and declining working population, this study analyzes the impact of employee aging on firm innovation and productivity using data from listed firms. There are two aspects to the aging of employees. Increasing age and length of service may increase worker productivity with the accumulation of human capital through experience and learning resulting in increased proficiency in their roles in the company. On the other hand, it may slow down investment in new and ambitious innovations and businesses and organizational restructuring, leading to organizational rigidity and poor performance. In this paper, we estimate the effect of average employee age on firm productivity and innovation using data from the Development Bank of Japan's Corporate Finance Data Bank and the IIP Patent Database 2020. The main findings from the analysis are as follows. (1) While the average employee age of listed companies has continued to increase since the 1970s, there is no significant difference in average years of service. (2) Although an increase in the average age of employees increases productivity, the positive effect declines from the mid-40s and has a negative impact after the age of 45 (an inverted U-shape). (3) The increase in the average years of service of employees continues to increase corporate productivity does not form an inverted U-shape, but rather a straight line, rising to the right. (4) For relatively young firms (up to 50 years of age), years of service plays a more important role than average employee age, while for relatively old firms (51 years of age or older), average employee age is important in terms of productivity, with average years of service making little significant difference. (5) For innovation captured by patents, an increase in the average age of employees contributes positively to innovation in terms of quantity (number of patent applications), quality (number of citations within 5 years of application), novelty (number of AI and robot patents applied for), and scalability (self-similarity in patent portfolio), while an increase in average years of service has a negative impact. (6) Both average employee age and average years of service are positively related to the increase in average wages, but the age effect is larger than the effect of years of service.
    Date: 2023–10
  5. By: Siew Ling Yew (Department of Economics, Monash University); Jie Zhang (School of Economics and Business Administration, Chongqing University and Department of Economics, National University of Singapore)
    Abstract: We explore optimal health subsidies in a dynastic model with health externalities to productivity that cause low health spending, productivity, longevity, savings and labor but high fertility. Public or firms’ health subsidies increase health spending, longevity and productivity and decrease fertility. Labor income taxes reduce the marginal benefit of health spending and the time cost of raising a child, while consumption taxes reduce the relative cost of raising a child. Appropriate public or firms’ health subsidies can internalize the externalities through age-specific labor income taxes and consumption taxes. Calibrating the model to the Australia economy, numerical results suggest policy improvements.
    Keywords: Health externality, Longevity, Productivity, Fertility, Savings
    JEL: H21 I13 I15
    Date: 2023–10

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.