nep-age New Economics Papers
on Economics of Ageing
Issue of 2023‒11‒20
ten papers chosen by
Claudia Villosio, LABORatorio R. Revelli

  1. Addressing the prolonged ension gap By Kim, Dohun
  2. When Institutions Interact: How the Effects of Unemployment Insurance are Shaped by Retirement Policies By Matthew Gudgeon; Pablo Guzman; Johannes F. Schmieder; Simon Trenkle; Han Ye
  3. Pension Reform, Incentives to Retire and Retirement Behavior: Empirical Evidence from Swedish Micro-data By Lisa Laun; Mårten Palme
  4. Occupational Differences in the Effects of Retirement on Hospitalizations for Mental Illness among Female Workers: Evidence from Administrative Data in China By Wang, Tianyu; Sun, Ruochen; Sindelar, Jody L.; Chen, Xi
  5. Policy brief :Les effets de la pension sur la santé By Claire Duchene; Benoît Bayenet; Ilan Tojerow
  6. Demographic Shifts and Potential Food Trade Impacts: A case of ASEAN food export By Wanissa Suanin; Panit Wattanakoon
  7. Redistribution with Unequal Life Expectancy By Sebastian Koehne
  8. The Labor Supply of Elderly Mexican Women By Vega, Alejandro
  9. Country Differences in Long-Term Care Institutions: Towards a Care Regime Typology By van Damme, Maike; Spijker, Jeroen
  10. Deadwood Labor: The Effects of Eliminating Employment Protection By Emmanuel Saez; Benjamin Schoefer; David G. Seim

  1. By: Kim, Dohun
    Abstract: As the age for National Pension eligibility rises, creating an income gap, many older people typically offset this by increasing their labor earnings, studies suggest. Those facing a pension gap tend to increase earnings without an accompanying rise in poverty or reduction in consumption. However, households with excessive medical expenses struggle to fully offset the reduced pension, as increased labor income doesn't completely make up for the pension shortfall. Given the ongoing upward trajectory of the pensionable age, meticulous monitoring of elderly employment trends and bolstering support for prolonged employment are of paramount importance. For immediate relief, older households, constricted by caregiving obligations and facing labor supply limitations, require further reinforcement through targeted support programs.
    Date: 2023
  2. By: Matthew Gudgeon; Pablo Guzman; Johannes F. Schmieder; Simon Trenkle; Han Ye
    Abstract: This paper shows empirically that the non-employment effects of unemployment insurance (UI) for older workers depend in a first-order way on the structure of retirement policies. Using German data, we first present reduced-form evidence of these interactions, documenting large bunching in UI inflows at the age that allows workers to claim their pension following UI expiration. We then estimate a dynamic life-cycle model and use it to directly quantify how the effects of UI vary with retirement policies. Accounting for interactions across UI and retirement institutions also helps explain otherwise difficult-to-explain trends in the unemployment rate of older German workers.
    JEL: E24 J2 J26 J6 J63 J64 J65 J68
    Date: 2023–10
  3. By: Lisa Laun; Mårten Palme
    Abstract: This paper investigates to what extent the 1998 reform of Sweden’s public old-age pension system contributed to the increase in extensive margin labor supply among older workers seen in the country in recent decades. We use a large data set containing all males and females born in Sweden between 1927 and 1950 and observe their retirement behavior during 1991–2012. The data show that the reform changed the incentives to remain in the labor force ambiguously: although it induced an income effect towards later retirement through lower replacement levels, it also implied a lower price on leaving the labor market under some assumptions. We use an econometric model in which the economic incentives to stay in the labor market are measured by Social Security Wealth, defined at each hypothetical retirement age, and a variable measuring the implicit tax, imposed by the income security system, on staying in the labor force. The point estimates from our econometric model, which should be interpreted with caution, suggest that at most a small part of the increase in labor force participation of the elderly can be attributed to the pension reform.
    JEL: J2 J26
    Date: 2023–10
  4. By: Wang, Tianyu (Renmin University of China); Sun, Ruochen (University of Pennsylvania); Sindelar, Jody L. (Yale University); Chen, Xi (Yale University)
    Abstract: Retirement, a major transition in the life course, may affect many aspects of retirees' well-being, including health and health care utilization. Leveraging differential statutory retirement age (SRA) by occupation for China's urban female workers, we provide some of the first evidence on the causal effect of retirement on hospitalizations attributable to mental illness and its heterogeneity. To address endogeneity in retirement decisions, we take advantage of exogeneity of the differing SRA cut-offs for blue-collar (age 50) and white-collar (age 55) female urban employees. We apply a Fuzzy Regression Discontinuity Design (RDD) around the SRA cut-offs using nationally representative hospital inpatient claims data that cover these workers. We show that blue-collar females incur more hospitalizations for mental illness after retirement, while no similar change is found for white-collar females. Conditional on blue-collar females being hospitalized, probabilities of overall and ER admissions due to mental illness increase by 2.3 and 1.2 percentage points upon retirement, respectively. The effects are primarily driven by patients within the categories of schizophrenia, schizotypal and delusional disorders; and neurotic, stress-related and somatoform disorders. Moreover, the 'Donut' RDD estimates suggest that pent-up demand at retirement unlikely dominates our findings for blue-collar females. Rather, our results lend support to their worsening mental health at retirement. These findings suggest that occupational differences in mental illness and related health care utilization at retirement should be considered when optimizing retirement policy schemes.
    Keywords: mental illness, behavioral disorders, retirement, inpatient care, blue-collar females, white-collar females
    JEL: I11 J26 J14 I18 H55
    Date: 2023–10
  5. By: Claire Duchene; Benoît Bayenet; Ilan Tojerow
    Date: 2023–05–22
  6. By: Wanissa Suanin; Panit Wattanakoon (Faculty of Economics, Thammasat University)
    Abstract: Despite the declining fertility rates, demographic changes are anticipated to increase the world's population over the next several decades. Due to this shift, elderly people will outnumber younger ones. Because of age-related dietary preferences and food production efficiency, population demographics may have an impact on food trade patterns. The study uses structural gravity analysis to investigate the impact of demographic shifts on ASEAN food exports. The findings indicate that global population growth influences demand for ASEAN food exports. However, import demand is dwindling with age, particularly in developed countries and the European Union (EU). In contrast, the United States and China are prospective markets for ASEAN food exporters. These also apply to healthy food exports. A demographic shift toward an aging population also boosts ASEAN's export capacity.
    Keywords: Food trade, Healthy food, Demographic shifts, ASEAN
    JEL: F10 F14 Q18
    Date: 2023–10
  7. By: Sebastian Koehne
    Abstract: This paper introduces life expectancy inequality into a tractable Mirrleesian life-cycle model and characterizes the optimal income tax policy using theory and calibration. A positive association between life expectancy and income counteracts the well-known static pattern of declining marginal utility. As a result, the mechanical value of redistribution is reduced at all income levels. Moreover, the pension wedge becomes a novel determinant of optimal taxation, motivating relatively lower optimal tax rates for low earners and relatively higher optimal tax rates for high earners. Quantitatively, the effects of the mechanical value of redistribution dominate, and the optimal marginal tax rates fall by up to 10 percentage points when life expectancy is heterogeneous.
    Keywords: optimal taxation, redistribution, life expectancy, inequality
    JEL: D82 H21
    Date: 2023
  8. By: Vega, Alejandro (Department of Economics, Umeå University)
    Abstract: This paper estimates the labor supply response to an increase in the marginal wage rate among middle-aged to elderly Mexican women. Using data from the National Survey of Occupation and Employment, I find that an increase in the marginal wage rate is associated with an increase in worked hours. The results suggest that the marginal wage rate elasticities are greater for older women than for their younger counterparts.
    Keywords: labor supply; marginal wage; women; Mexico
    JEL: I10 J01
    Date: 2023–11–04
  9. By: van Damme, Maike; Spijker, Jeroen
    Abstract: Objective: This study generates a classification of 26 European OECD countries with respect to care regimes, based on indicators measured around 2008/2010. Building upon the literature, two important dimensions of care arrangements are empirically tested: de-familialization and familialism. Method: Latent profile analyses show how these two dimensions indicate different types of care regimes. The grouping of countries is based on indicators of institutional care for the young and for the old. Results: The results show six care regime types: ‘defamilialized-universal caregiver’; ‘defamilialized-women caregiver’; ‘defamilialized-young/family care-old’; ‘family care-young/supported familialism-old’; ‘supported familialism’; ‘familialism-by-default’. Conclusion and Implications: This classification contributes to developing a theoretical framework of care institutions. In addition, insight is gained into general contextual care institution effects on citizens lives in Europe.
    Date: 2023–09–30
  10. By: Emmanuel Saez; Benjamin Schoefer; David G. Seim
    Abstract: We study the role of employment protection legislation (EPL) in boosting employment among older workers. Our analysis juxtaposes the quantitative employment gains with the qualitative “deadwood labor” problem that such gains entail. We do so by conducting a comprehensive analysis of the sharp and complete elimination of EPL that occurs at age 67 in Sweden, as well as reform-driven shifts in this age cutoff. First, focusing on direct separation effects, we find that 8% of jobs separate in response to the elimination of EPL. Effects stem from jobs with stronger initial EPL (long-tenure, firms subject to “last in, first out” rules), and those in the public sector. Separations appear involuntary to workers, with firms targeting plausibly unproductive (sick) workers. Second, we focus on effects of continuing jobs. While wages appear rigid to EPL, we uncover novel, sizable intensive-margin hours reductions among continuing jobs, and an 8% drop in earnings conditional on staying on the job. Third, we estimate total equilibrium effects at the cohort level, where separations fully pass through into employment to population rate effects, with no offsetting effect from hiring. On a per-capita basis, total earnings of older workers causally drop by 21.5% due to EPL elimination. We validate these local effects by leveraging a reform-driven shift in the age cutoff from 67 to 68.
    JEL: J0
    Date: 2023–10

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