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on Economics of Ageing |
| By: | Giulia Giupponi |
| Abstract: | Demographic trends have increased the potential labor supply of the elderly – women in particular – and its macroeconomic importance, but are simultaneously exerting mounting pressure on the financial sustainability of public old-age support programs. In response to these trends, many countries have implemented – or are planning to implement – pension reforms that aim to encourage longer labor force participation. A rich literature has investigated how the characteristics of public pension systems affect employment at older ages. However, the design of social security can affect labor supply well before retirement. For example, more generous systems might induce workers to reduce their lifetime labor supply. What are the effects of changes in pension benefits on labor supply prior to retirement? And, what is the relative importance of pension wealth (wealth effect) and implicit labor taxation (substitution effect) in affecting labor supply choices? Answering the second question has proven particularly challenging in the empirical literature, due to the difficulty in separately identifying wealth effects and substitution incentives of pension programs. This project will provide novel estimates of the effect of pension wealth on individual labor supply before retirement. The project exploits a German pension reform that changed the generosity of pension contributions credited to parents – mostly mothers – for the time spent raising their children. From July 2014, parents of children born before January 1, 1992 had their pension benefits increased by EUR 336 per year per child; the pension contributions of parents of children born on or after January 1, 1992 was left unchanged. The timing and nature of this policy reform – popularly known as ‘Mütterrente’ – generate a pure pension wealth effect on affected parents. Using administrative social security data on a large sample of German women, who had children in a neighborhood of the January 1, 1992 policy cutoff and were therefore aged approximately 45-60 at the time of the reform, the analysis examines preretirement labor supply responses to a substantial change in pension wealth. To identify the effect of interest, the empirical analysis adopts a difference-in-differences design, comparing the dynamics of labor supply before and after July 2014, for women who had children just before and just after January 1, 1992. The richness of administrative data allows to investigate various dimensions of heterogeneity, such as the work-disutility, income and age gradients of the wealth effect. Well-identified estimates of pension wealth effects in the female population and by various dimensions of heterogeneity are useful to inform models of policy evaluation and long-term projections. In this respect, the project sits within the Center’s research focal areas of ‘informing long-term projections and models’ and ‘requirements of work in the modern economy’. |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2023-08&r=age |
| By: | Margareta Vania Putri (Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada); Catur Sugiyanto (Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada) |
| Abstract: | This study aims to see whether there is a decline in consumption in retirement which is not in line with the life cycle hypothesis (consumption puzzle effect). Previous studies revealed that consumption has shifted when entering retirement due to efficient spending. This research analyzes the consumption pattern of the Indonesian elderly peculiarly in the frame of the retirement consumption puzzle. Utilizing data from the Indonesian Family Life Survey (IFLS) wave 4 and 5 from 2007 and 2014, and this study constructed panel data with a total sample of 2, 556 individuals. The Difference in Differences (DiD) method is used to see whether the change in labor status toward retirement causes a decrease in household consumption. As robustness, this study also uses the division of age categories. The results of this study indicate that there is a retirement consumption puzzle in Indonesia, with a decrease of 19.9% in total expenditure per capita. The consumption decrease in retirement indicates government should consider pension funds and create social security programs to maintain the welfare of the elderly. |
| Keywords: | Retirement, Household Consumption, Life Cycle Hypothesis, DiD |
| JEL: | D13 I31 J22 K31 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:gme:wpaper:202303004&r=age |
| By: | Javier Olivera |
| Abstract: | This paper studies active ageing and its distribution among older adults in a sample of 18 Latin American countries. For this purpose, a multidimensional index of active ageing is estimated for each individual, as well as its distribution in each country. This strategy makes it possible to measure inequalities in the ageing process, and also to consider different value judgements in the overall assessment of quality of life during ageing. Thus, the study sheds light on discrepancies in the quality of ageing within and between countries. Furthermore, individual factors associated with the degree of inequality in active ageing are analysed by means of regressions using Gini re-centred influence functions. A higher proportion of people with secondary education and better access to water and sewerage services is found to be associated with reduced inequality in active ageing. Country-level variables — such as health expenditure, pension coverage, access to health care and the poverty rate among older people — are key in explaining between-country differences in active ageing. |
| Keywords: | Active ageing; Old age; Inequality; Well-being; Latin America |
| JEL: | H55 I18 I31 J14 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2023-07&r=age |
| By: | Anqi Chen; Alicia H. Munnell; Laura D. Quinby |
| Abstract: | Due to changes in the retirement landscape in recent decades, Late Boomers (who are now nearing retirement) would be expected to have less wealth from traditional pensions, Social Security, and housing, but higher 401(k)/IRA assets compared to Mid Boomers at the same age. Strikingly, though, Late Boomers have seen a drop in their 401(k)/IRA assets. The questions are why is their 401(k)/IRA wealth lower and what do the patterns mean for younger cohorts. |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2023-06&r=age |
| By: | Miguel Faria-e-Castro; Samuel Jordan-Wood |
| Abstract: | New research suggests that declining asset values in 2022 may have prompted older workers to return to the labor force. |
| Keywords: | retirement; net worth; retirement assets; labor force participation |
| Date: | 2023–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:fip:l00001:95504&r=age |
| By: | Alex Arifianto |
| Keywords: | social security, public pension, national health insurance, Indonesia |
| URL: | http://d.repec.org/n?u=RePEc:agg:wpaper:372&r=age |
| By: | Siyan Liu; Laura D. Quinby |
| Abstract: | Housing wealth is an important resource for economic security in retirement. Yet, Black households approaching retirement have only a fraction of the housing wealth held by White households. One reason is that Black households are less likely to own homes in the first place. A second reason, which is the focus of this paper, is that when they do own homes, they see lower wealth accumulation than White homeowners. This study uses the Panel Study of Income Dynamics to determine what share of the age-55 housing wealth gap is due to disadvantage at the time of first purchase and what share is due to slower appreciation of subsequent housing wealth. |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2023-03&r=age |
| By: | Siyan Liu; Laura D. Quinby |
| Abstract: | In 2020, around two million grandparents were responsible for the basic needs of their grandchildren, with grandparent care concentrated in historically disadvantaged communities. Despite being particularly vulnerable to financial insecurity, most grandparents are ineligible for formal support – such as subsidies for foster parents, housing assistance, and Social Security dependent child benefits – because they raise their grandchildren outside of the foster care system. Using the Health and Retirement Study and American Community Survey, this study documents how grandparent caregivers differ from typical grandparents in terms of time and money spent on grandchildren, demographic characteristics, and economic resources. It then evaluates how their finances would improve if eligibility for child benefits were aligned with the more lenient tax criteria for claiming a dependent grandchild. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2023-09&r=age |
| By: | Gustafsson, Björn Anders (Göteborg University); Zhang, Peng (Zhejiang University); Jia, Hanrui (Shanghai Administration Institute) |
| Abstract: | In urban China, gender gaps in employment and earnings have steadily increased since the 1990s. Such gender gaps are important because pension rights and amounts are based on labor force participation and wages. However, as this study demonstrates, despite the rise in gender differences in the urban labor market, the average gender pension gap decreased between 1988 and 2018. In the paper, we describe the evolution of the fragmented pension system in urban China using a quantitative approach that distinguishes between pension coverage rates and average benefit amounts. Additionally, we conducted a birth cohort analysis to gain further insights into the reasons for changes in the gender pension gap. We utilized data from the China Household Income Project, focusing on individuals aged 60 years and older. Therefore, this study demonstrates how changes in China's pension system have benefited women more than men during the aforementioned period. |
| Keywords: | gender pension gap, pension reforms, time effect, cohort effect, urban, China |
| JEL: | H55 J14 J26 P36 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16558&r=age |
| By: | Stephen Machin; Jonathan Wadsworth |
| Abstract: | Concerns about a recent rise in economic inactivity have prompted new policies aimed at discouraging early retirement and encouraging the labour force participation of women with young children. Stephen Machin and Jonathan Wadsworth argue that such interventions would be more cost-effective if targeted at groups for whom inactivity is a longstanding issue. |
| Keywords: | economic inactivity, inactivity, labour, uk economic inactivity rate, growth, wages, retirement age |
| Date: | 2023–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:663&r=age |
| By: | Ofek-Shanny, Yuval (FAU, Erlangen Nuremberg); Strulov-Shlain, Avner (University of Chicago Booth School of Business); Zeltzer, Dan (Tel Aviv University) |
| Abstract: | We study the impact of subsidizing home-based long-term care on recipients' health and the labor supply of their working-age children. We use administrative data from Israel on the universe of welfare benefit applications linked with tax records of applicants and their adult children. To address the endogeneity of benefit recipients' health status, we instrument for benefit receipt using the leniency of randomly assigned evaluators who assess the applicant's functional status and determine benefit eligibility. We find that for compliers - applicants who receive subsidies only from more lenient evaluators - subsidizing home-based care has large adverse effects on recipient health but no detectable effects on the labor market outcomes of their children. The results are consistent with the crowd-out of self-care for the marginal recipient, highlighting the need to assess the heterogeneous eects of home-care subsidies. |
| Keywords: | home-based long-term care, labor supply |
| JEL: | I13 I18 J22 H53 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16551&r=age |
| By: | Amy Smaldone; Mark L. J. Wright |
| Abstract: | The world’s population had been doubling every 47 years to reach 8 billion today. But it is expected to peak at 10.5 billion before declining by century’s end. |
| Keywords: | world population; global population; fertility rates; life expectancy at birth; population aging |
| Date: | 2023–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:fip:l00001:95792&r=age |
| By: | Gørtz, Mette (University of Copenhagen); Sander, Sarah (University of Copenhagen); Sevilla, Almudena (London School of Economics) |
| Abstract: | This paper compares the labor market impact of grandparents before and after the arrival of the first grandchild. We show that grandmothers' labor market outcomes decline more steeply than grandfathers' after the first grandchild's arrival, leading to a 4-10 percent gender earnings gap 5-10 years later. The child penalty is shifted across generations to grandmothers with low education, but daycare availability only affects child penalties. Gender biases towards older women's work are a contributing factor to the disparity in earnings between grandmothers and grandfathers after the arrival of the first grandchild. |
| Keywords: | grandchildren, female labor supply, gender, inequality, retirement |
| JEL: | J13 J14 J16 J22 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16557&r=age |
| By: | Lanfiuti Baldi, Giacomo; NIGRI, ANDREA |
| Abstract: | In this paper, we introduce a novel framework in longevity study, operating on the statistical approach of the Age--Period--Cohort framework by leveraging the skew-normal distribution and Bayesian estimation. We propose a specific application to gender gap analysis and forecasting. By employing mortality data from the Human Mortality Database in the USA, our study contributes a two-fold advancement. First, we present a novel perspective on gender gap analysis and forecasting, improving the current literature. Second, we contribute an improvement to the statistical framework for Age--Period--Cohort analysis. The proposed model offers invaluable insights applicable to healthcare planning and public interventions, providing a comprehensive snapshot of the gender gap across the population, and indispensable information for devising healthcare strategies. |
| Date: | 2023–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:z3qmw&r=age |
| By: | Ponthiere, Gregory |
| Abstract: | Welfare States do not insure citizens against the risk of premature death, i.e., the risk of having a short life. Using a dynamic OLG model with risky lifetime, this paper compares two insurance devices reducing well-being volatility due to the risk of early death: (i) an ante-mortem age-based statistical discrimination policy that consists of an allowance given to all young adults (including the unidentified adults who will die early); (ii) a post-mortem subsidy on accidental bequests due to early death. Each policy is financed by taxing old-age consumption. Whereas each device can yield full insurance, the youth allowance is shown to imply a higher lifetime well-being at the stationary equilibrium. The marginal utility of consumption exceeding the marginal utility of giving when being dead, the youth allowances system is, despite imperfect targeting, a more effi cient mechanism of insurance against the risk of early death. |
| Keywords: | premature death, mortality risk, social insurance, inheritance, lifecycle models |
| JEL: | J10 J17 I31 E21 H55 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1342&r=age |
| By: | Graziani, Rebecca; NIGRI, ANDREA |
| Abstract: | Though pivotal in longevity studies, multi-outcome modelling is largely neglected in the associated statistical literature. Here, we focus on the case of compositional data, especially relevant in longevity analysis, where overall mortality can be described as the composition of several causes of death. We propose an age–period–cohort model within the Dirichlet framework with a specific interest in its use for modelling longevity with multiple causes of death. We introduce a flexible approach to incorporating the Dirichlet distribution into the age–period– cohort framework. Then, using US cause-specific mortality data, we provide a comprehensive discussion and comparison of alternative modelling approaches. |
| Date: | 2023–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:856yw&r=age |
| By: | Langot, François |
| Abstract: | Depuis plus de 30 ans, des réformes du système de retraite français ont permis d'assurer sa soutenabilité financière dans un environnement démographique changeant. En plus de la pérennité des retraites à la française, elles ont réduit l'exclusion prématurée des seniors de l'emploi. Cet article vise à remettre en perspective ces deux résultats, sur la base des réformes des retraites en France. Premièrement, le recul de l'âge du taux plein créée un premier dividende en réduisant le nombre de retraités et en augmentant le nombre de cotisants au delà de l'âge du taux, diminuant une première fois les déficits des caisses de retraite. Deuxièmement, le recul de l'âge de la retraite \og cause\fg{} un accroissement de l'emploi des seniors avant l'âge du taux plein et augmente donc le nombre de cotisants, ce qui génère alors un second dividende pour les caisses de retraite et pour l'ensemble de l'économie. Pour reculer l'âge effectif de départ en retraite, on montre que les mesures incitatives telles que des surcotes sont un instrument puissant pour un recul volontaire l'âge de retraite, et non imposé comme dans le cas du recul de l'âge légal. Les effets positifs du recul de l'âge de la retraite sur l'emploi des seniors sont fragiles car ils reposent sur l'absence de mesures qui viendraient briser l'anticipation d'un allongement de l'horizon de travail des seniors, telles que les différentes mesures spécifiques aidant au non-emploi en fin de cycle de vie. |
| Keywords: | Retraite, emploi des seniors |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:2306&r=age |