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on Economics of Ageing |
| By: | Teresa Ghilarducci (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | The Social Security benefit structure penalizes people who claim before age 70. Yet over one-fifth of eligible people claim before their full retirement age (age 67 for those born in 1960), and over 90 percent claim before the maximum age of 70, resulting in reduced monthly benefits. While many claim early out of necessity, financial advisors often recommend to those with retirement savings to spend down their savings before tapping into Social Security to increase their lifetime monthly benefit. However, few people have professional advisors. A Social Security Bridge option that is formalized, accessible, and easy to understand would allow beneficiaries to boost monthly benefits and help protect against downward mobility in retirement. This bridge, while important for many, is not a relevant for those with little to no retirement savings. Thus, we also advocate for increasing the Social Security minimum benefit to ensure adequate lifetime retirement income for the over 63 million Americans who will retire without any retirement savings. |
| Keywords: | Social Security, Workers, Jobs, Older workers, retirement, retirement savings, retirement age |
| JEL: | E24 I14 J62 J38 E21 J83 J32 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepapn:2023-04&r=age |
| By: | Drystan Phillips; Teresa Ghilarducci (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | Challenging the widespread assumption that people claim their retirement benefits only when they retire, more than one-fifth of older workers in the United States start claiming Social Security benefits as soon as they are eligible, even while working for pay. Low-income older workers are more than three times as likely as high-income workers to claim early, indicating a reliance on Social Security payments to supplement low wages. Those who claim before the full retirement age (also known as the Normal Retirement Age) will receive reduced benefits throughout their lives, leaving them financially vulnerable once they stop working. Because so many older workers collect reduced Social Security benefits, raising the retirement age will have little effect on getting people to work longer and will simply reduce benefits further. Instead, reforms should focus on policies like creating an Older Workers Bureau to support work at older ages, and bolstering Social Security benefits for those who risk falling into poverty in retirement. |
| Keywords: | Social Security, Workers, Jobs, Older workers, retirement, retirement savings, retirement age |
| JEL: | E24 I14 J62 J38 E21 J83 J32 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepapn:2023-03&r=age |
| By: | Jessica Forden; Teresa Ghilarducci (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | America’s eldercare system relies on families to provide care to aging adults, leaving those without family or wealth particularly vulnerable to having their care needs go unmet. 8.3 million people, or 42 percent of adults who have difficulty with tasks like getting dressed, using the toilet, or preparing meals did not receive any help in 2020 (the latest data available). Older adults who do not get the care they need face higher negative health outcomes and disability levels. Expanding Community Medicaid would help all older Americans receive the care they need in old age. |
| Keywords: | Eldercare, care needs, low-income, middle-income Workers, Risk, Older workers, retirement income, retirement, retirement savings, caregivers |
| JEL: | E24 I14 J62 J38 E21 J83 J32 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepapn:2023-05&r=age |
| By: | Teresa Ghilarducci; Karthik Manickam (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | This essay surveys global pension developments and intellectual basis for pension reform in the last 40 years. National retirement income security systems share similar goals: smoothing consumption over a lifetime, providing insurance against long life and poverty; avoiding accidental bequests; and distorting capital and labor markets. Pension systems should be efficient and anticipate business cycles and financial uncertainties. Experts agree transitioning from unfunded to funded systems creates dead-weight losses and legacy debt. Despite similar goals national pension institutions vary by a nation’s political economy—large wealthy social democracies have different systems than less developed nations. Intellectual and political debate concern whether advance–funding pensions leads to more private savings and investment, whether collective institutions are more cost-effective than private alternatives; and how to manage long term public systems when government capacity is weak and influences by private financial interests. There is no consensus that longer working lives is a one-size-fits-all solution to pension affordability, labor shortages, and elder well-being. |
| Keywords: | Pension systems, Retirement policies, Nonwage costs, Older workers, welfare programs, Labor force size, Labor standards |
| JEL: | J14 J26 J81 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2023-04&r=age |
| By: | Klinges, Giulia (University of Liège); Jousten, Alain (University of Liège); Lefèbvre, Mathieu (Aix Marseille School of Economics) |
| Abstract: | Over the years, the Belgian social security system has undergone substantial reform with a prime focus on increasing older worker labor force participation. The paper explores the effect of past reforms on inequality in old age. We distinguish two separate effects: The mechanical effect considers the change in inequality and expected benefit levels due to the reforms for a fixed retirement age distribution. The behavioral effect accounts for the endogenous change caused by changes in the incentives to work. Our results show that mechanically, reforms have led to losses in expected benefits for all but the lowest income quintile. Behavioral changes had a positive but orders of magnitude smaller effect. Overall, inequality decreased as a result of reforms. |
| Keywords: | social security and public pensions, old-age labor supply, retirement, pension reforms, inequality |
| JEL: | D63 H55 I38 J26 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16735&r=age |
| By: | Shen, Chi; Chen, Xi |
| Abstract: | There is mounting evidence indicating that the aging process initiates during early life stages, with in utero the individual's environment playing a significant role. Consequently, it is crucial to comprehend the enduring effects of early life circumstances on health in old age. In this study, we conducted a meta-analysis to examine the effects of the Great Chinese Famine (1959-1961) on the health of older adults. We also explored potential mechanisms underlying these effects. The complex interplay between early life circumstances, multiple health-related sectors, and healthy aging necessitates a comprehensive life-course approach and strategic interventions to enhance public health in an aging society. |
| Keywords: | Meta-Analysis, Aging, Life Course Health, Famine, Early Life Circumstances |
| JEL: | I14 J14 J13 I18 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1373&r=age |
| By: | Teresa Ghilarducci; Siavash Radpour; Jessica Forden (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | Since 1992 wealth for the bottom 90% of households nearing retirement has fallen. The only source of wealth helping the bottom 90% is Social Security. Despite pro savings policies and generous tax breaks for savings, the share of the bottom 50% having any retirement account didn’t change in 20 years -- 46% in 1992 and 47% in 2016. Even the middle class suffered with the share of the next 40% having retirement savings that fell from 85% in 1992 to a low of 71% in 2016. Housing ownership increased a bit for the bottom 50% but fell among the middle class and upper middle class. Home equity for the working and middle class fell. Using SCF and HRS data over 20 years, we find the bulk of working-class wealth is government social insurance. Economists should not exclude social insurance from wealth calculations. We find social insurance is the most important source of wealth for most families. Government policies and institutions have failed wealth building for most American households with workers. |
| Keywords: | wealth, inequality, retirement readiness, Social Security, home ownership, home equity, social insurance |
| JEL: | J14 J26 J81 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2023-02&r=age |
| By: | Pinkus, David (Department of Economics, Copenhagen Business School); Pozzoli, Dario (Department of Economics, Copenhagen Business School); Schneider, Cédric (Department of Economics, Copenhagen Business School) |
| Abstract: | We use a unique database on domestic pension fund investment to analyze the re-lationship between pension fund investment and innovation within Danish firms. We find a significant positive association between pension fund investment and various measures of innovation, including green technologies for climate change mitigation and adaptation. However, this relationship is much weaker in highly competitive indus-tries, suggesting that pension funds encourage innovation by monitoring and holding managers accountable. Our analysis also shows that pension funds foster innovation by providing stable long-term capital. Overall, our study highlights the important role of pension funds in driving firm innovation, particularly by reducing managerial slack and by supplying stable, long-term capital. |
| Keywords: | Pension Fund Investment; Innovation; R&D |
| JEL: | J24 J60 L20 |
| Date: | 2024–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2024_001&r=age |
| By: | Arnab Bhattacharjee; Larissa Marioni; Max Mosley; Adrian Pabst |
| Abstract: | This paper aims to explore and assess alternative data sources for wealth in order to improve existing pension wealth statistics. We find that, notwithstanding some limitations, the Wealth and Assets Survey (WAS) is currently the most comprehensive source. Then, we conduct a comparative analysis of WAS against alternative data sources, including potential new sources. Our findings suggest that, despite WAS being somewhat good at capturing variations in pension wealth across the population, it appears deficient in capturing well pension uptake for the lower three deciles. Together, pension wealth at the top end is also underreported. We recommend using alternative sources of information, such as a one-time survey and/or using a microsimulation approach to complement the available data. |
| Keywords: | pension wealth, wealth distribution, inequality |
| JEL: | D31 D14 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:552&r=age |
| By: | Jessica Forden (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | Unpaid eldercare provided by friends and family comes with costs to caregivers, including the limitations eldercare responsibilities may place on labor force participation and work hours. This study examines the relationship between the intensity of unpaid elder care and work behavior for previously full-time workers using multivariate regression to analyze 2011-2018 American Time Use Survey data. High frequency eldercare provision is associated with a decreased probability of being in the labor force for women (2.7 percentage points) and a decrease in weekly hours worked for both men (3.4 hours) and women (2.3 hours), conditional on working full-time 2-5 months prior. |
| Keywords: | elder care, long-term care, unpaid care, informal care, labor force participation, hours worked |
| JEL: | J14 J26 J81 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2023-03&r=age |
| By: | Chihiro Shimizu; Yongheng Deng; Tomoo Inoue; Kiyohiko Nishimura |
| Abstract: | Many developed countries have experienced prolonged economic stagnation in the aftermath of property bubbles bursting. Such observations have led people to believe that economic stagnation accompanied by property bubbles has longer and more severe consequences than other forms of economic stagnation. This study conducts an empirical analysis to challenge this hypothesis and suggest that demographics are closely related to other aspects of long-term economic stagnation. Using panel data from 17 countries from 1974 to 2018, we investigate the residential property price dynamics by incorporating demographic factors and considering the interaction of those demographics with credit conditions. Our results shed new light on the importance of demographic factors in modeling the long-run equilibrium of residential property prices. We find that the effect of nominal interest rates determined by monetary policy on asset prices varies depending on the country and the degree of population aging at the time. We also find that persistently optimistic population projections lead to the over-supply of residential stocks in rapidly aging countries, resulting in stagnant residential property markets. We demonstrated that ignoring the demographic and credit factors in the dynamics may lead to misjudgment of the long-run equilibrium conditions and incorrect policy decisions.Length: 36 pages |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:tcr:wpaper:e198&r=age |
| By: | Motta, Matt (Boston University School of Public Health); Callaghan, Timothy; Ross, Jennifer; Padmanabhan, Medini; Gargano, Lisa; Bowman, Sarah; Yokum, David Vincent (District of Columbia Government) |
| Abstract: | In May 2023, federal regulators authorized two vaccines designed to prevent infection with Respiratory Syncytial Virus (RSV) for adults aged 60 or older. While some efforts have been made to study the prevalence of vaccine uptake thus far, few have studied this group’s intentions to vaccinate, as well as socio-demographic barriers to vaccination. In a nationally representative survey of N = 1, 200 US Adults (N = 362 aged 60+), we find that a majority of seniors (53%) intend to refuse an RSV vaccine. As of late Fall 2023, just 14% of those eligible have already received a RSV vaccine. We also present multivariate evidence that vaccine safety and efficacy attitudes, as well as previous vaccination behaviors, are associated with RSV vaccination intentions. |
| Date: | 2024–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:ezaur&r=age |
| By: | Kapelle, Nicole (Humboldt-Universität zu Berlin); Rowold, Carla |
| Abstract: | Capturing the complexity of family life courses as predictors of later-life outcomes like wealth is challenging. Addressing this, we used German data and combined feature selection, sequence analysis tools, and regression techniques. This approach extends prior research that either (a) assessed a few selective but potentially irrelevant summary indicators, or (b) examined the relevance of entire life course clusters without identifying which specific aspects matter within and between clusters. We explored (I) which family life course aspects—encompassing the order, duration, and timing of states and transitions—are key wealth predictors for Western Germans aged 50 to 59. Additionally, we analysed (II) the strength and direction of associations between relevant aspects and wealth, and (III) whether these associations differ by gender. We identified 23 diverse features as relevant predictors, with two—the time spent never-married, both without and with children—deemed most relevant. Most features were negatively associated with wealth and characterised predominantly by single parenthood, marital separation or early marital transitions with or without fertility transitions. The prevalence and significance of associations between these features and wealth differed partly across genders. Results highlight the importance of previously concealed family life course features for wealth inequalities in late working age. |
| Date: | 2024–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:pucvt&r=age |