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on Economics of Ageing |
| By: | Daniel Wheadon; Gonzalo Castex; George Kudrna; Alan Woodland |
| Abstract: | We investigate the effects of self-control preferences on household life cycle decisions, macroeconomic outcomes, and the roles they play in determining optimal means testing of public old-age pensions. To that end, we develop a stochastic overlapping generations model with heterogeneous households that have Gul-Pesendorfer self-control preferences. First, we show that in economies with higher self-control costs lifetime savings diminish, while labor supply and retirement are postponed to later ages. Hence, the fiscal burden to fund the public pension system increases. Second, we examine the effects of increasing self-control costs in the context of age pension means testing with alternative taper rates at which the pension benefit is withdrawn. We show that there is a negative relationship between self-control costs and taper rates, i.e., populations with higher self-control costs prefer lower taper rates. We find that if self-control costs are sufficiently high, a universal pension with a zero taper rate may be optimal. |
| Keywords: | self-control preferences, public pensions, progressivity, labor supply, life-cycle, stochastic OLG model |
| JEL: | C68 D15 D91 H2 H55 J22 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2024-57 |
| By: | Andersen, Torben M.; Bhattacharya, Joydeep; Liu, Qing |
| Abstract: | A classic result in dynamic public economics says that for a dynamically-efficient overlapping-generations economy, there is no long-run welfare role for unfunded, pay-as-you-go (PAYG) pensions. Subsequently, the literature has shown that if agents are sufficiently myopic or present-biased, a welfare rationale arises only when agents wish to but cannot borrow (“borrowing constraint”) against future pensions – their private, voluntary retirement savings are zero. In this paper, we extend the scope of the results mentioned above. We prove that a positive optimal pension cannot coexist with a positive private retirement saving under standard preferences without the borrowing constraint. The same is true under myopia. Co-existence may obtain under the self-control and temptation preferences popularized by Gul and Pesendorfer (2004). |
| Date: | 2024–09–05 |
| URL: | https://d.repec.org/n?u=RePEc:isu:genstf:202409052109480000 |
| By: | Despina Gavresi (DEM, University of Luxembourg); Anastasia Litina (Department of Economics, University of Macedonia) |
| Abstract: | This paper establishes population aging as a driving force of populism in a multilevel regression analysis of individuals living in European countries over the period 2002-2019. The focus is on the effect of ``aggregate'' population aging as opposed to individual aging. Populism expressed as populist attitudes is measured with individual-level data of nine consecutive rounds of the European Social Survey. We use data on voting for populist parties, political trust, and attitudes towards immigration. Our findings suggest an association of population aging with a declining electoral turnout, a higher support for populist parties, lower trust in political institutions, and a rise in anti-immigrant hostility. These effects are observed across both young and elderly voters. |
| Keywords: | Population Aging, Populist Voting, Immigrant Attitudes, Trust |
| JEL: | D72 J10 P00 Z13 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:mcd:mcddps:2024_07 |
| By: | Andersen, Torben M.; Bhattacharya, Joydeep; Grodecka-Messi, Anna; Mann, Katja |
| Abstract: | A growing literature explores reasons for rising wealth inequality, but is mostly silent on the role of pension systems despite their well-understood influence on life-cycle savings. This paper develops a simple life-cycle model to lay bare the primary theoretical mechanisms connecting pension systems, asset accumulation, and the wealth distribution. Mandated fullyfunded plans transformindividuals with lower incomes, often characterized as low savers, into asset owners, and may also imply a more equal wealth distribution than pay-as-you-go-based systems. To test the empirical validity of these predictions, the paper explores a pension reform in Denmark, a country that witnessed declining wealth inequality over the last decades. In a calibrated life-cycle model employing unique register data, the Danish pension reformemerges as a key factor explaining the downward trend in wealth inequality. |
| Date: | 2024–09–06 |
| URL: | https://d.repec.org/n?u=RePEc:isu:genstf:202409061340040000 |
| By: | Steven Brakman; Tristan Kohl; Charles van Marewijk; Charles van Marrewijk |
| Abstract: | The availability and composition of labor is fundamental for the structure of international trade. This points towards the importance of demographic transitions that affect trade through, for example, changing capital-labor ratios, urbanization dynamics, or changes in the composition of demand over the life cycle of individuals. Key in this respect is the so-called demographic dividend, which is the potential economic growth stemming from lower dependency ratios. We use the gravity model to link long-run changes of the demographic dividend to changes in the level of world trade for the 21st century. All the scenarios that we distinguish point towards the same conclusion: Compared to the current situation, North America and Europe will no longer be the center of global trade in 2100 due to their aging populations. In contrast, South Asia and Sub-Saharan Africa will experience a substantial increase in their share of world trade throughout the remainder of this century, while the impact of the demographic drag facing China will be most pronounced around 2060. |
| Keywords: | demographic transition, trade, income, gravity model |
| JEL: | F10 J11 O11 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11262 |
| By: | Hastuti; Hafiz Arfyanto; Muhammad Adi Rahman; Nina Toyamah; Sri Murniati |
| Keywords: | vulnerable, PKH, elderly welfare |
| URL: | https://d.repec.org/n?u=RePEc:agg:wpaper:2374 |
| By: | Marta Kahancová; Pavol Bors |
| Abstract: | This report seeks to understand how care services in Hungary have been affected by the increasing demand for the services over past decade on the one hand, and by the austerity measures as an aftermath of the economic crises starting in 2008 on the other hand. Within overall care services, the focus in on two subsectors: early childhood education and care (ECEC) for children aged 0-5; and long-term social and health services for elderly people (long-term care, LTC). The report is part of the SOWELL project that scrutinizes care services in Hungary at the national and local level from the perspective of employment relations as a new arena for building solidarity and labour market coordination through social dialogue. The motivation for this focus is the growing demand for care services on the one hand and increasing budget austerity in delivering public finance for care services since 2008-2009 on the other hand. In this context, a four-fold challenge (or a quadrilemma) has been identified that stakeholders in the care sector are facing. These include constrained public finance, the need for quality services, aims to improve the access to services, and finally improvements in working conditions in care services. The report looks at the development in the Hungarian care sector acknowledging these challenges, and the role of social partners and social dialogue therein. |
| Date: | 2024–08–31 |
| URL: | https://d.repec.org/n?u=RePEc:cel:report:65 |
| By: | Barbora Holubová |
| Abstract: | The report was prepared within the SOWELL project focused on social dialogue in care services and co-financed by the European Commission DG Employment, Social Inclusion &Affairs (VS/2020/0242). The report presents the Slovak employment relations, working conditions and social partner strategies in care services, concentrating on two sectors: care services for children aged 0-5 (ECEC) and social and health services for the elderly people (LTC). The report, based on extensive desk research, analysis of the dataset and interviews with the stakeholders, maps the employment, governance and industrial relations in ECEC and LTC to respond to two research questions: a) How did Slovakia balance the pressures of budget constraints, service coverage, job quality and quality of services in ECEC and LTC, the so-called ‘quadrilemma’? and b) What role do the social partners and social dialogue institutions play in favour of some solutions of care provision instead of others? |
| Date: | 2024–08–31 |
| URL: | https://d.repec.org/n?u=RePEc:cel:report:66 |
| By: | KO Yi-Chun; UCHIDA Shinsuke; HIBIKI Akira |
| Abstract: | This study explores the mechanisms underlying farmers in adapting to climate change, with a focus on the effect of farmers’ age on the relationship between temperatures and crop yields. Using municipality–level data on Japanese rice production between 2001–2018, we find a nonlinear (inverted U–shaped) age effect on the temperature–yield relationship. Farmers in their late 50s exhibit the highest resilience to extreme temperatures, experiencing minimal yield loss, while farmers above and below this age threshold suffer more from extreme temperatures. We also find that active participation of local communities can help retiring and inexperienced farmers mitigate the negative temperature effects. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:24069 |