nep-age New Economics Papers
on Economics of Ageing
Issue of 2024‒05‒20
eight papers chosen by
Claudia Villosio, LABORatorio R. Revelli

  1. Addressing demographic headwinds in Japan: A long-term perspective By OECD; Randall S. Jones
  2. Subjective Life Expectancies, Time Preference Heterogeneity, and Wealth Inequality By Foltyn, Richard; Olsson, Jonna
  3. La situación financiera del componente contributivo de las pensiones públicas en 2023 By Miguel Ángel García Díaz
  4. Caring Connections: Immigrant Caregivers and Long-Term Elderly Care in Italy By Lisa Capretti; Joanna A. Kopinska; Rama Dasi Mariani; Furio Camillo Rosati
  5. Notas sobre las proyecciones para España del Ageing Report de 2024 By Ángel de la Fuente
  6. Countries for Old Men: An Analysis of the Age Pay Gap By Nicola Bianchi; Matteo Paradisi
  7. The design of insurance contracts for home versus nursing home Long-Term Care By Lozachmeur, Jean-Marie; Borsenberger, Claire; Cremer, Helmuth; Joram, Denis; Malavolti, Estelle
  8. Les retraités sont-ils plus heureux que les actifs ? By Margolis, Louis

  1. By: OECD; Randall S. Jones
    Abstract: Japan faces serious demographic headwinds. Under current fertility, employment and immigration rates, the population would fall by 45% by 2100 and employment by 52%. Given the challenges of a shrinking and ageing population, the government has pledged to “create a children-first economic society and reverse the birth rate decline”. One priority is to strengthen the weak financial position of youth, which leads many to delay or forgo marriage and children. Making it easier to combine paid work and family is also critical so that women are not forced to choose between a career and children. Policies should also cut the cost of raising children, the key obstacle to couples achieving their desired number of children. Given the challenge of reversing fertility trends, Japan needs to prepare for a low-fertility future by raising productivity and employment, particularly among women and older people. Breaking down labour market dualism, which disproportionately affects youth, women and older people, is a priority. Abolishing the right of firms to set a mandatory retirement age (usually at 60) and raising the pension eligibility age would also promote employment. Foreign workers are helping ease labour shortages, but more needs to be done to attract foreign talent. A comprehensive approach is needed to raise fertility, the employment rates of women and older persons and inflows of foreign workers.
    Keywords: dualism, female employment, fertility rate, foreign workers, Labour market, mandatory retirement, non-regular workers, older workers, pension eligibility age, population ageing, work-life balance
    JEL: J1 J2 J3 J7 J8
    Date: 2024–04–24
  2. By: Foltyn, Richard; Olsson, Jonna
    Abstract: This paper examines how objective and subjective heterogeneity in life expectancy affects savings behavior of healthy and unhealthy people. Using data from the Health and Retirement Study, we first document systematic biases in survival beliefs across self-reported health: those in poor health not only have a shorter actual lifespan but also underestimate their remaining life time. To gauge the effect on savings behavior and wealth accumulation, we use an overlapping-generations model where survival probabilities and beliefs evolve according to a health and survival process estimated from data. We conclude that differences in life expectancy are important to understand savings behavior, and that the belief biases, especially among the unhealthy, can explain up to a fifth of the observed health-wealth gap.
    Keywords: life expectancy, preference heterogeneity, subjective beliefs, life cycle
    JEL: D15 E21 G41 I14
    Date: 2024
  3. By: Miguel Ángel García Díaz
    Abstract: En 2023, la situación financiera del componente contributivo de las pensiones públicas en España reflejó un elevado gasto, representando cerca del 30% del gasto público total y el 13, 1% del PIB. A pesar de varias reformas y transferencias estatales adicionales para sostener este sistema, persistió un déficit estructural significativo. Las pensiones, que dependen principalmente de las cotizaciones sociales y otras tasas, aún requirieron transferencias estatales considerables y préstamos para cubrir sus déficits, señalando desafíos continuos en la sostenibilidad financiera del sistema de pensiones.
    Date: 2024–04
  4. By: Lisa Capretti (CEIS, University of Rome "Tor Vergata"); Joanna A. Kopinska (University of Rome La Sapienza); Rama Dasi Mariani (University of Roma Tre); Furio Camillo Rosati (CEIS & DEF, University of Rome "Tor Vergata")
    Abstract: This paper investigates the impact of migrant-provided home-based care on elderly health in Italy, analysing hospitalisation frequency, duration, and mortality. Using an instrumental variable approach to mitigate endogeneity between local health status and migratory flows, we show that migrant-provided home-based care reduces the frequency of hospital admissions (extensive margin) and their duration (intensive margin). Regarding the former, a one percentage point increase in the immigrant-to-elderly population ratio leads to a 4% decrease in long-term and rehabilitation (LR) stays, with no effect on acute stays. Concerning the latter, we find that a similar change in the migrant inflows translates to a 1.5% reduction in admission duration, with LR admissions reaching a 3.3% decline. These effects primarily stem from traumatic injuries, musculoskeletal disease, and genitourinary disorders, particularly linked to home-based mobility and treatment management. Our back-of-the-envelope calculations suggests that a 1.3 percentage point increase in the migrant-to-elderly population ratio registered in our analysis period could potentially reduce LR elderly hospitalisation costs by approximately 8% and yield annual public budget savings equivalent to around 0.59% of total hospitalisation expenditures
    Date: 2024–04–19
  5. By: Ángel de la Fuente
    Abstract: La presente nota revisa brevemente las proyecciones de ingreso y gasto del sistema público de pensiones que ofrece el AR24, comparándolas con las de su antecesor (el AR21) y con las publicadas en los últimos años por el Ministerio de Inclusión y Seguridad Social (MISSM, varios años), y explora las implicaciones de estas cifras para la evaluación del sistema prevista para el año que viene. El trabajo incluye también un Anexo con una comparación de las principales hipótesis macroeconómicas, demográficas y de mercado de trabajo de los dos últimos informes de envejecimiento.
  6. By: Nicola Bianchi; Matteo Paradisi
    Abstract: This study investigates the growing wage disparity between older and younger workers in high-income countries. We propose a conceptual framework of the labor market in which firms cannot change the contracts of older employees and cannot freely add higher-ranked positions to their organizations. In this model, a larger supply of older workers and declining economic growth restrict younger workers’ access to higher-paying roles and widen the age pay gap in favor of older workers. Drawing on extensive administrative and survey data, we document that the characteristics of these negative spillovers on younger workers’ careers align with the model’s predictions. As older workers enjoy more successful careers, younger workers become less likely to hold higher-ranked jobs and fall toward the bottom of the wage distribution. The pay gap between younger and older workers increases more in slower-growing, older, and larger firms and in firms with higher mean wages, where these negative spillovers on younger workers are larger in magnitude. Moreover, younger employees become less likely to work for higher-paying firms, whose share of older workers disproportionately increases over time. Finally, we show that alternative explanations for these findings receive little empirical support.
    JEL: J11 J21 J31 M51
    Date: 2024–04
  7. By: Lozachmeur, Jean-Marie; Borsenberger, Claire; Cremer, Helmuth; Joram, Denis; Malavolti, Estelle
    Abstract: We study the design of optimal (private and/or social) insurance schemes for formal home care and institutional care. We consider a three period model. Individuals are either in good health, lightly dependent or heavily dependent. Lightly dependent individuals can buy formal home care which reduces the severity of dependency and reduces the probability to become severely dependent in the next period. Severely dependent individuals pay for nursing home care. In both states of dependency individuals can receive a (private or public) insurance benefit (transfers). These benefits can be flat or depend on the formal care consumed (or a combination of the two). These benefits are financed by a premium (or a tax). Individuals may be alive until the end of period 2 or die at the beginning of periods 1 or 2 with a certain probability which may depend on their state of health. The laissez faire is inefficient because individuals consume a too low level of formal home care and are not insured. The first-best insurances scheme requires a transfer to lightly dependent individuals that, (under some conditions) increases with the amount of formal home care consumed. Severely dependent individuals, on the other hand, must receive a flat transfer (from private or social insurance). The theoretical analysis is illustrated by a calibrated numerical example which show that the expressions have the expected signs under plausible conditions.
    Keywords: Long-term care insurance; formal home care; nursing home; care
    JEL: I13 I18 H51
    Date: 2024–04–29
  8. By: Margolis, Louis
    Abstract: Les réformes des régimes de retraite ne manquent jamais de susciter de forts mouvements de résistance. Est-ce parce que la retraite est le gage d’un gain en bien-être ? En comparant les seniors actifs et les retraités du même âge, et en suivant les personnes autour du passage à la retraite, on constate qu’il n’en est rien. D’autres idées couramment partagées, concernant l’influence bénéfique d’un environnement rural, par exemple, se voient également démenties par les différentes enquêtes françaises et européennes que nous mobilisons.
    Keywords: France, Well-Being, Retraites
    Date: 2024–03

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