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on Economics of Ageing |
| By: | Walwei, Ulrich (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "In Germany, as in many other countries in the western world, the baby boomers are reaching retirement age. As fewer young workers are entering the labor market than older workers are leaving due to low birth rates, the labor force workers is falling, all other things being equal. At the same time, the funding problems in the pension insurance system are growing, as fewer and fewer people are paying into the pension scheme, particularly in the internationally widespread pay-as-you-go systems. At the same time the proportion of pensioners is growing. Against this backdrop, the labor market participation of older people is increasingly coming into focus. The report begins with an overview of older people's labor force participation in a broader international comparison. This is followed by a description of the situation in Germany. A closer look will then be taken at the countries that are at the forefront of older people's labor force participation. The aim is to obtain indications of the factors that may have contributed to the high level of employment among older people in these countries. The Federal Republic of Germany has clearly caught up in the employment of older people in recent decades. This applies in particular to the 50-64 age group. Compared to the leading countries, Germany is only a few percentage points behind. However, the 65-74 age group is still lagging further behind. The future gap to other countries in this age group will be influenced by opposing developments. The further steps towards "retirement at 67" are likely to reduce it further, but the "retirement at 63" will slow it down. However, Germany is still outperformed by some countries in terms of the employment rates of older people. This raises the question of what factors could be behind the favorable development of the labor market for older people in these countries. For the purposes of comparison, this report takes a closer look at the situation in Japan, New Zealand, Iceland, Norway and Sweden, all of which have even higher employment rates for older people than Germany. Various aspects that are important for the employment of older people are analysed in turn from an international comparative perspective. The country comparison reveals a number of important points that could be considered in Germany. The high level of employment among older people in Iceland, Sweden and Norway is linked to the high female labor force participation rate in both countries and continuous improvements in the educational level of the population, including further vocational training. New Zealand has a low pay gap between older and younger workers and comparatively high hiring rates for older workers, following a consistent and publicly visible anti-discrimination policy. In Japan, demographic pressure on labor demand and income requirements at the individual level is of significant importance. High and even higher employment rates for older people are not an automatic mechanism. They require good education and qualifications at the individual level as well as the opportunity and ability to engage in lifelong learning. Preventive healthcare is also required for a long working life, which, like education, is best started as early as possible. High employment rates among older people are not only favoured by individual employability, but also by the attractiveness of the labour market and thus the availability of employment for older workers. The more it is possible to address the skills and abilities of older workers, organize age-appropriate work and respond flexibly to employees' wishes, the greater the chance of retaining older workers in the labor market or of winning them back. Finally, regulations and support programs that provide incentives for employment in old age should also be considered. These include the flexibility of pension entitlement, more favorable labour law provisions for continued employment in old age, the longer period of unemployment benefit for older people, their inclusion in active labor market policy and a review of the regulations in the citizen's allowance that favor early retirement, such as the waiting periods for assets and housing." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; Island ; Japan ; Neuseeland ; Norwegen ; Schweden ; IAB-Open-Access-Publikation ; Auswirkungen ; Beschäftigungsform ; Betriebszugehörigkeit ; Dauer ; demografischer Wandel ; Erwerbsbeteiligung ; Erwerbspersonenpotenzial ; Erwerbsquote ; internationaler Vergleich ; Lohnhöhe ; ältere Arbeitnehmer ; OECD ; Rentenalter ; 1995-2022 |
| Date: | 2024–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabfob:202414(de) |
| By: | Foltyn, Richard (Dept. of Economics, Norwegian School of Economics and Business Administration); Olsson, Jonna (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | Using biennial data from the Health and Retirement Study, we estimate agedependent health dynamics and survival probabilities at annual frequency conditional on race, sex, self-reported health and other covariates. The estimates can be used to calculate heterogeneous life expectancies in the population. We show that the racial life expectancy gap remains large, even conditional on health, socioeconomic and marital status. Due to racial differences in health dynamics and mortality, married black men on average can expect to receive $6, 400 (or 8%) less in Social Security benefits in present value terms. Using a rich life cycle model, we estimate that this corresponds to a welfare loss of about 4%, whereas black married women’s welfare loss is primarily driven not by their own shorter life expectancy but the shorter life expectancy of their husbands. |
| Keywords: | Life expectancy; health dynamics; racial life expectancy gap; Social Security wealth; life cycle model |
| JEL: | C23 E21 I14 J14 |
| Date: | 2024–10–28 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2024_018 |
| By: | Lefebvre, Mathieu (University of Strasbourg); Pestieau, Pierre (Université catholique de Louvain, LIDAM/CORE, Belgium); Schoenmaeckers, Jérôme (Université de Liège) |
| Abstract: | The phenomenon of grandparents assuming the role of caretakers for their grandchildren is both substantial and on the rise, a trend partially attributed to mothers’ increasing participation in the workforce. While altruism is commonly believed to be the primary driver behind such caregiving, we propose to examine an additional motivation: the expectation among grandparents that they will receive care from their offspring in the event of their own incapacity. This paper aims to investigate this hypothesis from both theoretical and empirical perspectives. Initially, we construct a theoretical framework, delineating a Subgame Perfect Nash Equilibrium, wherein the grandparent first commits to caring for the grandchild, followed by the anticipation of receiving care from their adult child in scenarios of disability. Subsequently, we empirically test the feasibility of this model by analyzing data sourced from the Survey of Health, Ageing and Retirement in Europe (SHARE). Our results confirm that elderly who took care of their grandchildren receive more support from their children in the case of a loss of autonomy. |
| Keywords: | Long-term care ; Intergenerational transfers ; Informal care |
| JEL: | D13 J14 D64 |
| Date: | 2024–05–30 |
| URL: | https://d.repec.org/n?u=RePEc:cor:louvco:2024014 |
| By: | Bartels, Charlotte (DIW Berlin); Sierminska, Eva (Luxembourg Institute of Socio-Economic Research (LISER)); Schröder, Carsten (DIW Berlin) |
| Abstract: | There is growing interest in understanding how gender influences the accumulation of wealth. While prior studies focused on labor-related determinants, our research focuses on inheritances and gifts. Using unique survey data that oversamples the top 1% of wealth holders in Germany, we show that the gender wealth gap is small for individuals up to age 40, then widens, and declines for those past retirement age. Transfer amounts and their timing are important drivers of these differences: men tend to inherit larger sums than women during their working life. Women often outlive their male partners, thus receiving larger inheritances at older ages. |
| Keywords: | wealth accumulation, wealth inequality, gender wealth gap, inheritances, gender economics |
| JEL: | D31 D63 J16 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17324 |
| By: | Eduardo Andrade; Otaviano Canuto |
| Abstract: | Most high-income countries will experience declines in their populations over the next few decades. Some negative consequences of aging are on the horizon: greater fiscal imbalances and risks of economic stagnation. Immigration may by a way for those countries to mitigate the tendency. On the source side of immigration flows, brain drain is a risk. The policy paper presents the case of Japan, a nation that has grappled with the consequences of a declining and aging population for several years, as an example for other countries destined to confront similar circumstances in the forthcoming decades. Population aging is a strong trend in place. Some negative consequences of aging are on the horizon: greater fiscal imbalances and the risk of economic stagnation. Most high-income countries will experience a decline in their populations over the next few decades, and immigration is a way to offset this tendency. On the source side of immigration flows, ‘brain drain’ is a risk. |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pp_03-24 |
| By: | Heaney, Tiarnán |
| Abstract: | A large literature argues that resource constraints inhibit human capital accumulation. We test this hypothesis using the introduction of the Old Age Pension in Ireland in 1908, evaluating its spillover on school enrolments within multigenerational households. Exploiting the OAP's age-based and means-test criteria, we identify the causal effect of the cash transfer on enrolments for children aged 14 to 16 using data from the 1901 and 1911 Censuses of Ireland. The OAP increased the school enrolments of the poorest children by 8 per cent, while no effect is detected for wealthier households. This suggests that when poverty constrains schooling, unconditional cash transfers amplify a household's demand for education by reducing the opportunity costs of schooling. |
| Keywords: | schooling, poverty, old age pension, cash transfer, human capital, economic history of Ireland |
| JEL: | D31 H55 I25 J18 J24 N33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:qucehw:305271 |
| By: | Mauri Kotamaki (Turku School of Economics, University of Turku, Finland); Jonne Lehtimaki (Turku School of Economics, University of Turku, Finland) |
| Abstract: | This paper investigates the impact of population ageing on the economic and fiscal performance of Finland, a small open economy, which has undergone a rapid and significant demographic shift since 2010. By employing the Synthetic Control Method (SCM) to create a counterfactual scenario without ageing while also controlling for a major part of structural changes in the industrial and business environments, we find that in 2019, Finlandâs real GDP per capita would have been 15.9% to 27.5% higher, productivity 8.4% to 13.9% higher, and general government debt 26.0 to 28.4 percentage points lower. Our findings are further validated by an instrumental variable approach, which supports the SCM results. |
| Keywords: | Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Fiscal Policy, Studies of Particular Policy Episodes, Demographic Economics |
| JEL: | E6 E61 E62 E65 J1 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:tkk:dpaper:dp168 |
| By: | Charles Yuji Horioka (Center for Computational Social Science and Research Institute for Economics & Business Administration (RIEB), Kobe University, Asian Growth Research Institute, National Bureau of Economic Research, and Institute of Social and Economic Research, Osaka University, JAPAN) |
| Abstract: | The primary objective of this paper is to explore the determinants of the level of, and trends over time in, Japan's household saving rate, with emphasis on the impact of the age structure of the population, and to make projections about future trends therein. The paper finds that Japan's household saving rate has not always been high either absolutely or relative to other countries, contrary to popular belief, and that, if we confine ourselves to the postwar period, it was only during the 25-year period from 1961 to 1986 that it exceeded 15%. Past and future trends in Japan's household saving rate can largely be explained by changes in the age structure of her population, but declines in the saving rate of retired elderly households is a more important explanation for the recent decline in the household saving rate. However, it is likely that other factors such as the unavailability of consumer credit, the unavailability of social safety nets, high rates of economic (income) growth, tax breaks for saving, saving promotion policies, and high and rising land and housing prices are also partial explanations for why Japan's aggregate household saving rate was so high during the 1961-86 period and why it declined so much subsequently. As for future trends in Japan's aggregate household saving rate, it is likely to fall even further though not necessarily at a rapid rate. |
| Keywords: | Age structure of the population; Household consumption; Household saving; Japanese economy; Life-cycle hypothesis; Population ageing; Public pensions; Saving promotion; Social safety nets; Wealth accumulation |
| JEL: | D10 D11 D12 D14 D15 D64 E21 H55 J14 J26 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:kob:dpaper:dp2024-36 |
| By: | Koen Caminada; Kees Goudswaard; Qingqi Liu; Chen Wang; Jinxian Wang |
| Abstract: | Relative poverty has, in general, become a popular source of interest for research and the public. However, only a few studies have focused on the determinants of relative poverty among the elderly in a comparative setting over time. To fill in this gap, this study decomposed relative poverty among the elderly in 21 European countries, namely Austria, Belgium, Czech Republic, Denmark, France, Finland, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Romania, Solvakia, Spain, Sweden, Switzerland, and the United Kingdom, based on micro data from the Luxembourg Income Study from around 1995 to around 2022. Various counterfactuals were constructed and simulated. The results showed that relative poverty among the elderly has decreased and is mainly associated with changes in the distribution of pubic pensions, followed by changes in the distribution of private pensions. Labor market factors, especially earnings, have become more povertydecreasing over time in most of the countries under study. Finally, the demographic structure played a positive role in driving relative poverty among the elderly. |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:lis:liswps:882 |
| By: | Fan, Simon (Lingnan University); Pang, Yu (Macau University of Science and Technology); Pestieau, Pierre (Université catholique de Louvain, LIDAM/CORE, Belgium) |
| Abstract: | This paper develops an overlapping generations model analyzing parenting choices from a life cycle perspective. Young parents educate their children to foster their human capital development. Strict discipline requires minimal time from parents yet but can strain intergenerational relations. Pedagogical practice preserves familial bonds but demands significant time and effort, adversely affecting parental income. As parents age, they desire caregiving support from their adult children, who may bring earlier conflicts with their parents into the care environment. We suggest that the prevalence of strict discipline declines when the probability of living into old adulthood increases. We then incorporate health investments into the model to endogenize longevity and investigate the transitional dynamics of life expectancy, parenting styles, and human capital stock. Moreover, we examine how the interaction between parenting styles and monetary transfers induces children’s provision of eldercare in a bargaining framework. We characterize multiple stationary Markov perfect equilibria, shedding light on the observed diversity in parenting across different cultures. |
| Keywords: | Parenting ; longevity ; old-age support ; human capital ; health investment |
| JEL: | I19 I21 J14 |
| Date: | 2024–06–22 |
| URL: | https://d.repec.org/n?u=RePEc:cor:louvco:2024018 |
| By: | Perelman, Sergio (Université de Liège); Pestieau, Pierre (Université catholique de Louvain, LIDAM/CORE, Belgium) |
| Abstract: | Il n’y a pas un siècle on parlait à peine des retraites. C’était le temps où l’espérance de vie ne dépassait pas 65 ans. Avec l’allongement de la durée de la vie, les retraites sont devenues une priorité de la politique sociale. L’allongement de la vie a continué. Il a donné lieu à l’émergence d’incapacités liées au grand âge. On s’est alors intéressé à la dépendance et à la perte d’autonomie réclamant des soins de longue durée. Depuis peu l’attention s’est porté sur la dernière étape de notre existence, la fin de vie. L'expression ‘fin de vie’ est on ne peut pas plus ambiguë. A quel moment peut-on parler de fin de vie ? Pour un jeune adulte qui meurt dans un accident de la route, elle ne dure qu’un instant. Pour une personne souffrant de ce qu’on appelle pudiquement une longue maladie, elle peut durer des mois, voire des années. Dans de nombreux pays, on parle de fin de vie lorsqu’il n’y a plus d’espoir. A partir de là, s’enclenche un programme de soins qui prend une toute autre nature et un mode de remboursement extrêmement généreux. On a donc deux définitions de la fin de vie. Soit elle commence lorsqu’il n’y a plus d’espoir, ce qui n’empêche pas de recourir à des traitement plus ou moins agressifs visant à prolonger la vie. Soit elle commence lorsque le patient entre dans un programme de soins palliatifs ou tout autre programme apparenté. Cette dernière définition est plus restrictive. On notera que dans certains pays anglo-saxons les termes soins de fin de vie (end of life EOL) et soins palliatifs sont interchangeables. En fin de vie, la nature des soins change. La famille devrait prendre une place cruciale. Les pouvoirs publics ont un rôle nouveau, tant financier que légal. La manière dont la fin de vie est abordée varie sensiblement selon les pays. Dans cet article, nous nous proposons de comparer les façons dont cette problématique est traitée en France et dans les pays voisins. |
| Date: | 2024–06–17 |
| URL: | https://d.repec.org/n?u=RePEc:cor:louvco:2024015 |