|
on Economics of Ageing |
| By: | Ilmakunnas, Ilari (The Finnish Centre for Pensions); Sten-Gahmberg, Susanna; Hakola, Timopekka |
| Abstract: | In 2017, Finland introduced a partial old-age pension scheme, allowing individuals to claim either 25 or 50 percent of their old-age pension after turning 61, irrespective of their employment status. Claiming a partial pension before the statutory retirement age results in a permanent reduction of the full old-age pension. Due to the rapid rise in consumer prices in 2022, individuals who claimed their pension before the end of 2022 benefited from a three-percentage points higher index adjustment in 2023, resulting in a permanently higher pension compared to those who claimed their pension in early 2023. In this study, we assess the causal effect of the financial incentive arising from the exceptional index adjustment on pension take-up using regression discontinuity design and full population register data. We also analyse differences in responses by socioeconomic status and gender. The extraordinary pension index adjustment increased the probability of claiming the partial old-age pension in the first month after becoming eligible for it by around 8 percentage points, or around 80 per cent. The effect is explained by individuals claiming a pension sooner than they would have in the absence of the exceptional index adjustment. Individuals with a higher pension accrual, higher earnings, or with upper tertiary education were more likely than others to respond to the index adjustment. |
| Date: | 2025–02–12 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:n3t2s_v2 |
| By: | Ilmakunnas, Ilari (The Finnish Centre for Pensions); Sten-Gahmberg, Susanna; Hakola, Timopekka |
| Abstract: | In 2017, Finland introduced a partial old-age pension scheme, allowing individuals to claim either 25 or 50 percent of their old-age pension after turning 61, irrespective of their employment status. Claiming a partial pension before the statutory retirement age results in a permanent reduction of the full old-age pension. Due to the rapid rise in consumer prices in 2022, individuals who claimed their pension before the end of 2022 benefited from a three-percentage points higher index adjustment in 2023, resulting in a permanently higher pension compared to those who claimed their pension in early 2023. In this study, we assess the causal effect of the financial incentive arising from the exceptional index adjustment on pension take-up using regression discontinuity design and full population register data. We also analyse differences in responses by socioeconomic status and gender. The extraordinary pension index adjustment increased the probability of claiming the partial old-age pension in the first month after becoming eligible for it by around 8 percentage points, or around 80 per cent. The effect is explained by individuals claiming a pension sooner than they would have in the absence of the exceptional index adjustment. Individuals with a higher pension accrual, higher earnings, or with upper tertiary education were more likely than others to respond to the index adjustment. |
| Date: | 2025–01–03 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:n3t2s_v1 |
| By: | Pimpertz, Jochen |
| Abstract: | Seit langem ist bekannt, dass die Bevölkerungsalterung eine zentrale Herausforderung für die Gesellschaft darstellt. Aber anders als in der Vergangenheit tritt der demografische Wandel nicht erst in ferner Zukunft ein, er wird jetzt wirksam. Denn die ersten Jahrgänge der Babyboomer-Generation stehen vor dem regulären oder vorzeitigen Eintritt in den Rentenbezug. Eine Verlängerung der Lebensarbeitszeit ist deshalb dringend geboten. Mit der Alterung der geburtenstarken Jahrgänge scheiden ab jetzt vermehrt Beschäftigte aus dem Erwerbsleben aus. Damit droht einerseits ein Rückgang des Arbeitskräftepotenzials, andererseits ein Anstieg der Finanzierungserfordernisse für Renten, Gesundheit und Pflege. Das erfordert immer höhere Beitragssätze, die sich auf die Entwicklung der Arbeitskosten negativ auswirken und die Beschäftigungsperspektiven am Standort Deutschland trüben. Entwickeln sich Sozialversicherungsausgaben und beitragspflichtige Einkommen immer weiter auseinander, droht eine Negativspirale. Langfristig führt kein Weg daran vorbei, den Renteneintritt über eine Dynamisierung der Regelaltersgrenze in ein höheres Lebensalter zu verschieben. Das käme aber zu spät, um die Folgen des Renteneintritts der ersten Babyboomer-Kohorten abzumildern - sowohl mit Blick auf die rasch steigende Rentenlast als auch mit Blick auf die drohende Lücke, die die geburtenstarken Jahrgänge auf dem Arbeitsmarkt hinterlassen. Die kommende Bundesregierung muss deshalb das verbleibende Zeitfenster nutzen und Fehlanreize zugunsten eines vorzeitigen Renteneintritts für alle heute noch im Erwerbsleben stehenden, rentennahen Jahrgänge beseitigen. Notwendig ist dazu eine Abschaffung des abschlagfreien vorgezogenen Rentenbezugs sowie eine Anhebung der Abschlaghöhe. Auf den Prüfstand gehört die unbegrenzte Hinzuverdienstmöglichkeit bei vorgezogenem Rentenbezug. Dann braucht es keine zusätzlichen Anreize zugunsten einer verlängerten Erwerbstätigkeit, denn das Rentenrecht "belohnt" einen späteren Rentenbezug systematisch. Eine erfolgreiche Armutsprävention gelingt über eine erfolgreiche Beschäftigungspolitik. Sozialpolitische Handlungsbedarfe gilt es konsequent an die bedürftigkeitsgeprüften Sicherungssysteme zu adressieren - die Höhe der individuellen Rente ist kein hinreichender Indikator für Hilfsbedürftigkeit. Eine nachhaltige Reformagenda braucht es auch für die gesetzliche Kranken- und Pflegeversicherung. Denn hier steigen die Finanzierungserfordernisse ebenfalls mit der alternden Versichertengemeinschaft. Gleichzeitig hat der Arbeitskräftemangel längst das personalintensive Gesundheitswesen erreicht. In der Medizin und in der Pflege kann es nicht mehr allein darum gehen, Finanzierungsquellen für wünschenswerte Versorgungsstandards zu erschließen. Gesundheitspolitik wird sich künftig am Machbaren, nicht am Wünschenswerten messen lassen müssen. |
| Abstract: | In Germany, first cohorts of the baby boomer generation are about to enter regular or early retirement. This threatens a decline in labour supply on the one hand and an increase in expenditure for pensions, healthcare and long-term care on the other. As a result, contribution rates must continue to rise, which will have a negative impact on the development of labour costs and dampen employment growth in Germany. If social security expenditure and contributory income continue to diverge, a downward spiral is created. There is an urgent need to extend working life. Therefore, in the long term, there is no way around postponing retirement to a higher age by dynamizing the standard retirement age. However, this would be too late to mitigate the consequences of the retirement of the first baby boomer cohorts - both in terms of the rapidly increasing pension burden and the looming gap that the baby boomers are leaving behind on the labour market. The upcoming federal government must use the remaining window of opportunity to eliminate disincentives in favour of early retirement for all who are still working today. This requires the abolition of early retirement without deductions and an increase in the amount of the deduction. The unlimited possibility of earning additional income when drawing an early pension should be scrutinised. Then there is no need for further incentives in favour of extended employment, as pension law systematically 'rewards' later retirement. Poverty prevention is achieved through a successful employment policy. The need for social policy action must be consistently addressed to the means-tested security systems - the amount of an individual's pension is not a sufficient indicator of need for help. A sustainable reform agenda is also needed for statutory health and long-term care insurance. This is because the funding requirements are also increasing with the ageing community of insured persons. At the same time, the labour shortage has long since reached the labour-intensive healthcare sector. In medicine and nursing care, it can no longer just be a question of tapping sources of funding for desirable standards of care. In future, healthcare policy will have to be measured against what is feasible, not what is desirable. |
| Keywords: | Rente, Pflege, Kranken- und Arbeitslosenversicherung, Verteilung und öffentliche Finanzen |
| JEL: | H55 J11 J21 J26 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwkpps:311847 |
| By: | Amanina Binti Abdur Rahman |
| Abstract: | Against the backdrop of aging, Indonesia has started to address important policy challenges, including by gradually raising the retirement age. However, the increase in the retirement age and the prospect of longer employment of older persons raises concerns about its potential impact on the employment of younger persons. This paper is the first to analyze the relationship between the employment rate of older persons and the labor market outcomes of younger persons in Indonesia. Using data from the Indonesia Labour Force Survey (Sakernas) for 2016 to 2023, the analysis explores the relationship between the labor market outcomes – that is, the employment rates, unemployment rates, hours worked, and income – of younger persons and older persons. The findings show that overall, an increase in the employment rate of older persons is significantly associated with an increase in the employment rate of youth and prime-aged persons. The positive relationship is robust and is found across most of the specifications tested, that is, across genders, education levels, sectors, and within the formal sector. Encouragingly, there is no evidence of a significant negative relationship between the employment of older persons and younger persons. When there is a significant negative relationship between the employment of older persons and other employment outcomes of younger persons, the magnitude is small. These findings support the notion that raising the retirement age can address some of the challenges faced by an aging society. Finally, lifelong learning, upskilling, and reskilling are important to facilitate longer working lives by ensuring that older workers remain employable in a changing economy. |
| Date: | 2024–11–12 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10972 |
| By: | Breen, Casey |
| Abstract: | The Black-White mortality crossover is well-studied demographic paradox. Black Americans experience higher age-specific mortality rates than White Americans throughout most of the life course, but this puzzlingly reverses at advanced ages. The leading explanation for the Black-White mortality crossover centers around selective mortality over the life course. Black Americans who survived higher age-specific mortality risk throughout their life course are highly selected on robustness, and have lower mortality than White Americans in late life. However, skeptics argue the Black-White mortality crossover is simply a data artifact from age misreporting or related data quality issues. We use large-scale linked administrative data (N = 2.3 million) to document the BlackWhite mortality crossover for cohorts born in the early 20 th century. We find evidence the crossover is not a data artifact and cannot be uncrossed using sociodemographic characteristics alone. |
| Date: | 2024–08–23 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:ax9u3_v1 |
| By: | Martin Hackmann; Jörg Heining; Roman Klimke; Maria Polyakova; Holger Seibert; Maria A. Polyakova |
| Abstract: | We leverage decades of administrative data and quasi-experimental variation in the introduction of universal long-term care (LTC) insurance in Germany in 1995 to examine whether health insurance expansions can stimulate local economies. We find that the LTC insurance rollout led not only to sizeable growth of the target LTC sector, but also to an aggregate fall in unemployment and an increase in the labor force participation. Quantitatively, a 10 percentage point increase in the share of insured LTC patients led to 4 more nursing home workers per 1, 000 individuals age 65 and older (12% increase). Wages did not rise in the LTC sector or other sectors of the economy. The quality of newly hired nursing home workers declined, but this had no negative effect on old-age life expectancy. Overall, the insurance expansion brought lower-skilled workers into new jobs rather than reallocating workers away from other productive sectors. Our marginal value of public funds (MVPF) analysis suggests that the reform paid for itself when taking the positive fiscal externalities in the labor market into account. To understand which market primitives underpin our findings and to inform the external validity of our results, we develop and estimate a general model of labor markets with product-market subsidies in the presence of wedges, such as income taxes. Our model simulations show that the aggregate welfare effects of insurance expansions are theoretically ambiguous and depend centrally on the magnitude of frictions in input markets. |
| Keywords: | health insurance expansion, long-term care, aggregate economic impact, labor market effects, stimulus, moral hazard, welfare analysis |
| JEL: | D58 H51 I13 I31 I38 J14 J23 J64 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11665 |
| By: | Nolan, Brian; C. Palomino, Juan |
| Abstract: | Research on gender wealth gaps is hampered by the fact that most surveys gather information on wealth at the household or family level rather than for individuals. It is also limited in coverage, often not including pension wealth. Here we exploit the rich data on individual wealth including pension wealth obtained by the British Wealth and Assets Survey (WAS) to assess the gender wealth gap in Great Britain between 2006-08 and 2018-20, with a particular focus on the prominent role of private pension wealth. We find that in 2018-20 mean wealth for women was 29.5% lower than for men when pension wealth was included versus only 12.6% lower when it was not. Decomposition analysis shows that differences between men's and women's observed socioeconomic characteristics account for about 45% of the private pension wealth gap, with differences in labour market experiences (labour income, career gaps and part-time jobs) playing a key role. We also find an increase in the gender pension gap over time that is associated with the increasing proportion of pension wealth in Defined Contribution rather than Defined Benefit schemes. Financial and business wealth is also an important contributor to the overall wealth gap, and like pension wealth its contribution increases towards the top of the distribution. |
| Keywords: | wealth, gender gap, pension |
| JEL: | D31 D63 D64 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2024-03 |
| By: | Motta, Matt (Boston University School of Public Health); Callaghan, Timothy; Ross, Jennifer; Gargano, Lisa; Yokum, David Vincent (North Carolina) |
| Abstract: | Infection with Respiratory Syncytial Virus (RSV) is associated with tens of thousands of hospitalizations in a typical year. Most US adults are not likely to experience severe cases of RSV infection, but adults aged 60 or older are at elevated risk of experiencing hospitalization or death due to RSV. While RSV vaccines are available for adults aged 60 or older, and have been shown to significantly reduce the likelihood that older adults experience severe cases of RSV, less than one quarter of those eligible have opted to receive the vaccine. In the context of RSV vaccination, Reversal Narrative (RN) messages share stories about individuals who previously refused to receive the vaccine, but – in response to personal negative health outcomes (“regret” RN messaging) and/or new scientific information (“rationalizing” RN messaging) – ultimately changed their mind. In a large and nationally representative survey (N = 1, 300) of US adults, as well as a state-representative survey (N = 850) of a highly vaccinated US state, we demonstrate that unvaccinated adults over the age of 60 are significantly more likely to intend to receive an RSV vaccine when exposed to regret-focused (but not rationalizing) RN messaging. We conclude by discussing the viability of RN messaging as a vaccine promotion tactic, and consider how researchers might partner with health communicators to explore their viability in a wide range of health contexts. |
| Date: | 2024–10–15 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:q34kj_v1 |
| By: | Philippe d'Astous; Vyacheslav Mikhed; Sahil Raina; Barry Scholnick |
| Abstract: | Using wealth windfalls from lottery winnings and matched employer-employee tax files, we compare the effect of additional wealth on the entrepreneurial activity of older and younger individuals. We find that additional wealth leads older winners (aged 55 and older) to reduce business ownership and scale. In contrast, additional wealth leads younger winners to increase business ownership and performance. We also show that extra lottery wealth reduces the wage labor supply of both younger and older individuals. Thus, while younger lottery winners reduce wage labor to increase entrepreneurship, older lottery winners reduce both wage labor and entrepreneurship to retire. |
| Keywords: | Wealth, Age, Entrepreneurship, Labor Supply |
| JEL: | G5 G51 J22 L26 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:rsi:irersi:17 |
| By: | Majchrowska, Aleksandra; Roszkowska, Sylwia |
| Abstract: | We examine how demographic changes impact the transmission of minimum wage increases to inflation. The minimum wage growth can raise the prices of goods and services and accelerate inflationary processes. At the same time, a shrinking workforce and changes in its structure could lead to changes in the impact of minimum wage increases on the economy. We use the minimum wage augmented Phillips curve framework extended with the demographic variables. We employ the sample of 21 European Union countries in 2003-2023 and panel data techniques. Our study proves that the strength of the minimum wage pass-through effects on inflation depends on demographic factors. Aging of the workforce and shrinking workforce size weakens the impact of minimum wage increase on inflation. Contrary, a lower proportion of the less educated working-age population strengthens the minimum wage pass-through effects on inflation. Our results have important implications for macroeconomic, minimum wage, and education policies. |
| Keywords: | population ageing, shrinking workforce, minimum wage, inflation |
| JEL: | J11 J31 J38 |
| Date: | 2025–01–21 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123506 |
| By: | Shabana Mitra (Indian Council for Research on International Economic Relations (ICRIER)); Anjhana Ramesh |
| Abstract: | Projections indicate that in the next three decades the country's demographic will change, requiring more elderly and child care. On average, women in India spend 30 percent of the day in unpaid care work. This leaves them with little time to dedicate to paid labour. Boosting women's participation in the workforce is essential for narrowing gender inequalities. This requires efficient and functional care infrastructure. In order to provide care infrastructure to all, it is vital to bring both the private and the public sector together. Having child and elderly care facilities at work relieves dual-income households and encourages female labour force participation. This policy brief provides an overview on gender gaps in unpaid domestic care work, the state of care infrastructure in India and the role of private sector in providing care infrastructure. Keeping the unique position of India, it also suggests the way forward. |
| Keywords: | female worker, unpaid work, domestic work, private sector, icrier |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bdc:ppaper:35 |
| By: | Alexandru Cojocaru; Nikandrova, Arina; Michael M. Lokshin |
| Abstract: | A widely held view in the media and among some researchers is that younger people are more worried about climate change and more willing to support the climate agenda than older generations. Such a “climate change age gap” is often explained by the longer time younger people expect to live under worsening climatic conditions. This paper develops a theoretical model that proposes an alternative explanation for the relationship between age and attitudes toward climate change. The empirical analysis is based on data from 38 countries in Europe, Central Asia, and the Middle East from the 2023 round of the Life in Transition Survey. The findings demonstrate a positive relationship between the respondents’ age and their concerns about climate change. Older people are more likely to object to higher taxes to finance public policies in general, including climate change policies, but even this result is sensitive to the framing of climate action questions. |
| Date: | 2024–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10918 |
| By: | Tóth, Csaba G. |
| Abstract: | This study introduces a novel approach to decomposing population change by identifying the separate contributions of fertility, mortality, net migration, and initial age structure using stable population theory. Its strength lies in the additivity of the results: the contributions of these factors, along with the interaction effect, sum to equal the total population change. In addition, identifying the direct impact of initial age structure on population change offers new insights into the drivers of population dynamics. Central and Eastern Europe was one of the regions hit most by population decline between 1990 and 2020; however, it was marked by significant variation across countries. By decomposing population change, we found that the positive impact of the relatively young initial age structure in the CEE region was as large as the population-reducing effect of negative net migration, while the positive impact of mortality improvement offset one-third of the population-reducing effect of low fertility. On the other hand, the initial age structure had a crucial role in explaining differences in country-level population change during the study period. |
| Date: | 2025–01–28 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:3qn82_v1 |