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on Economics of Ageing |
| By: | David M. Cutler; Ellen Meara; Susan Stewart |
| Abstract: | The growth of longevity in the U.S. and other countries has increased interest in raising the age of eligibility for public retirement benefits. The consequences of this policy depend on the health of the older adult population overall and by socioeconomic group. In this paper, we estimate how multiple dimensions of non-fatal health in older adults evolve over time and across cohorts – physical functioning, mental health, pain, and cognition. Our sample is individuals in the Health and Retirement Study who are aged 51 to 54 at baseline and are followed for up to two decades. We find that limitations in most domains have increased for younger cohorts, especially pain and cognitive impairment. People are more impaired in their 50s, where such impairment used to occur in one’s 60s. However, this appears to be a speeding up of impairment more than a long-term increase. Among people in their late 60s, health for later cohorts is similar to health for earlier cohorts. To evaluate the implications of these trends, we simulate the work capacity of adults just before reaching age 65 based on the health status of people at this age and the relationship between health and the labor force outcomes of younger people. Overall health among those age 62 to 64 remains high, despite impairment striking at younger ages. However, among people without high school degrees, less than half are predicted to have the capacity to work full time by age 62 to 64, and over a quarter are predicted to be receiving SSDI. |
| JEL: | I1 J01 J20 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33733 |
| By: | Joubert, Clement (World Bank); Kanth, Priyanka (World Bank) |
| Abstract: | Low- and middle-income countries are experiencing fast population aging and reductions in extreme poverty, increasing theoretical incentives to save for old age, but empirical evidence on household wealth accumulation over the life cycle is lacking. Using age-cohort-time decompositions on 18 years of micro-data from Pakistan, we show that the average household accumulates wealth equivalent to 5 years’ worth of consumption between the ages of 25 and 65. Furthermore, this is mostly in the form of illiquid residential housing and land in rural areas. Examination of housing acquisitions, renovations, and dwelling characteristics over the life cycle reveals that wealth accumulation in 2001-2018 resulted partly from active investment in housing and partly from capital gains. To the extent that keeping all wealth in the form of housing may be sub-optimal, this constrained ability to save for the long term could motivate the extension of contributory pension instruments to informal sector workers, the majority of the workforce in this setting. |
| Keywords: | social protection, savings, informality, aging |
| JEL: | D14 D15 J11 J26 J46 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17876 |
| By: | E Philip Davis; Dilruba Karim |
| Abstract: | The ageing of the population, driven by declining fertility and rising longevity, is an ineluctable process with major economic and financial implications. This literature survey seeks to provide an overview of effects of ageing on financial markets, focusing inter alia on effects on household saving and wealth, pension provision, the demand for individual financial assets, consequent effects on financial structure, effects on asset prices and interest rates, consequences for housing, effects on banking and financial stability, and international capital flows. The survey covers both the theoretical and empirical literature. Important underlying aspects are the lifecycle pattern of consumption and saving, and the pattern of risk preferences for older people, which may impact on all these areas. There are important policy implications, and further empirical work is warranted. |
| Keywords: | Ageing, personal finance, securities markets, financial structure, housing, international capital flows |
| JEL: | D14 J10 O16 |
| URL: | https://d.repec.org/n?u=RePEc:nsr:niesrd:568 |
| By: | Lin, Zhuoer; Qian, Yuting; Gill, Thomas M.; Hou, Xiaohui; Allore, Heather; Chen, Shanquan; Chen, Xi |
| Abstract: | Assistance with daily activities is crucial for persons living with dementia and disabilities, yet many face significant challenges in accessing adequate care and support. Using harmonized longitudinal survey data (2012-2018) from the United States, England, 18 European countries and Israel, and China, we found that at least one-fifth of persons with dementia and disabilities received no personal assistance for basic or instrumental activities of daily living (ADL/IADL), regardless of regional development level. Care gaps were widespread across both ADL and IADL limitations, as well as for informal and formal care. Disparities were evident, with less-educated individuals more likely to lack formal care, while those living alone often lacked informal support, resulting in the absence of any care. Alarmingly, care availability showed no improvement over time. Our findings underscore the urgent need for policies to address inequities and ensure critical access to care services for this vulnerable population worldwide. |
| Keywords: | global aging, dementia, disability, ADL, IADL, unmet need, elder care |
| JEL: | J14 J18 I11 I18 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1608 |
| By: | SUMIZAWA, Kazui |
| Abstract: | This study examines public pension reform in a small open economy model where households fully finance education. Departing from previous studies that assume fully publicly funded education, we introduce loan interest subsidies on education in the presence of intergenerational transmission of human capital, which enables an earlier phase-out of pay as-you-go (PAYG) pensions in a Pareto-improving way. We extend the analysis to a closed economy where wages and interest rates are endogenously determined. By incorporating general equilibrium effects through factor prices, we show that loan interest subsidies make a Pareto-improving, gradual reduction of PAYG pensions feasible even in closed economies. This result highlights the efficiency gains from linking pension reform with educational loan support, in contrast to prior studies that overlook private education spending or factor price adjustments. |
| Keywords: | intergenerational transmission, human capital, loan interest subsidies, pay-as-you-go pension, pension reforms |
| JEL: | E62 H23 H55 |
| Date: | 2025–04–30 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124645 |
| By: | Hagiwara, Takefumi |
| Abstract: | This study theoretically analyzes population aging and its impacts on economic growth, wealth inequality, and fiscal sustainability. We introduce lifetime uncertainty to the overlapping generations model with heterogeneous households with varied intertemporal preferences, where unintended bequests caused by death are inherited by offspring. Aging can have both positive and negative impacts on economic growth and fiscal sustainability: saving-enhancing effects based on the life cycle theory and wealth-depletion effects caused by extended longevity. When aging advances, saving-enhancing effects are offset by wealth-depletion effects, which eventually outweigh the former. The results show an “inverted U-shaped” relationship between life expectancy and economic growth rate, or fiscal sustainability. Numerical simulation reveals that aging can produce a trade-off between economic growth and wealth inequality. We also show that a rise in deficit or government expenditure ratios exacerbate fiscal instability, economic growth, and wealth inequality under certain conditions. |
| Keywords: | Population Aging; Secular Stagnation; Inequality; Fiscal Sustainability |
| JEL: | D63 H63 J14 O11 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124598 |
| By: | Javier Olivera (Economics and Research Department, National Bank of Belgium); Warn N. Lekfuangfu (Universidad Carlos III de Madrid); Philippe Van Kerm, (University of Luxembourg) |
| Abstract: | Drawing on two data sources from across Europe, we show that both bequest motives of parents and children’s gender composition shape unequal divisions of bequests. First, the Survey on Health, Ageing and Retirement in Europe reveals that observed bequests are divided unequally when children differ in sex, caregiving, or income, with bequest motives strongest among mixed-sex children. Second, in a vignette experiment featuring alternative bequest motive scenarios and randomised gender compositions for two fictitious children, hypothetical bequests are most unequally divided under the exchange motive while children’s gender composition matters more under the altruistic motive. Fictitious parents favour daughters regardless of deservingness, granting the highest bequest share to a deserving daughter with a brother. In return, these patterns reinforce traditional gender norms. |
| Keywords: | Bequest, Intergenerational transfers, Gender, Vignette Experiment, Deservingness, Altruism, Exchange, Europe, HFCS, SHARE. |
| JEL: | H24 D31 D63 E62 H53 E25 J23 O33 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbb:reswpp:202505-476 |
| By: | D. Blanchet (CSR); M. CHABAUD (INSEE- RPS); T. OLIVIA (INSEE- PACA); J. RUBIN (INSEE- RPS) |
| Abstract: | La revalorisation des droits à retraite en fonction des prix est la règle qui prévaut dans le régime général , elle s’applique à la fois aux pensions en cours de service et aux salaires portés aux comptes, dont les 25 meilleures années servent de base au calcul de la première pension. Cette règle d’indexation rend l’évolution de la part des dépenses de retraite dans le PIB particulièrement sensible à la croissance économique, fragilisant le diagnostic sur les perspectives financières du système. Une réindexation pleine sur les salaires éviterait cette dépendance mais serait très coûteuse. Si on garde l’objectif d’éviter la dérive des dépenses, il faut que l’indexation sur les salaires soit accompagnée d’une prise en compte des variations du ratio cotisants/retraités. On explore différentes modalités de cette prise en compte, ainsi que leurs effets budgétaires et redistributifs. Ceci est examiné à la fois à l’aide d’une maquette d’un système en annuité stylisée, et par des microsimulations détaillées du modèle Destinie, lequel permet également d’examiner des effets des différentes règles sur la dispersion des droits et le risque de pauvreté des ménages de retraités. |
| Keywords: | Retraite, Indexation, Systèmes de retraite par points et en annuités |
| JEL: | H55 I3 J14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:nse:doctra:2025-08 |
| By: | Federico Felizzi |
| Abstract: | We investigate the economic impact of controlling the pace of aging through biomarker monitoring and targeted interventions. Using the DunedinPACE epigenetic clock as a measure of biological aging rate, we model how different intervention scenarios affect frailty trajectories and their subsequent influence on healthcare costs, lifespan, and health quality. Our model demonstrates that controlling DunedinPACE from age 50 onwards can reduce frailty prevalence, resulting in cumulative healthcare savings of up to CHF 131, 608 per person over 40 years in our most optimistic scenario. From an individual perspective, the willingness to pay for such interventions reaches CHF 6.7 million when accounting for both extended lifespan and improved health quality. These findings suggest substantial economic value in technologies that can monitor and modify biological aging rates, providing evidence for both healthcare systems and consumer-focused business models in longevity medicine. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2503.20357 |
| By: | Takemasa Oda (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan (currently, Japan Center for Economic Research, E-mail: takemasa.oda@jcer.or.jp)) |
| Abstract: | This paper quantitatively evaluates the long-run effects of changes in inflation on the real economy, with a focus on deflation and population aging in Japan. It develops an overlapping generations model that incorporates household demand for safe assets. The model features two channels through which a decline in inflation affects the real economy in the long run, that is, the Mundell-Tobin effect and the redistribution effect. Calibrated to the Japanese economy, the model shows that a decline in inflation does more damage to young households and impairs capital accumulation, thus reducing output and social welfare, and moreover, that the damage can be magnified by population aging. This result could provide a certain rationale for central banks to pursue and maintain a positive rate of inflation in an aging economy. |
| Keywords: | Demographics, life cycle, deflation, Mundell-Tobin effect, redistribution, overlapping generations model |
| JEL: | E21 E31 J11 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ime:imedps:24-e-14 |
| By: | Paul Makdissi (Department of Economics, University of Ottawa, Canada); Myra Yazbeck (Department of Economics, University of Ottawa, Canada) |
| Abstract: | This paper develops a framework for decomposing inequality of opportunity into racial stratification and social class components. We derive novel dominance conditions that enable robust rankings of joint distributions of income and birth circumstances, and develop additional dominance criteria for restricted classes of indices reflecting either pro-poor or meritocratic perspectives. Our framework includes an estimation approach and statistical tests for these stochastic dominance conditions, ensuring practical application with survey data. Using Health and Retirement Study data, we analyze inequality of opportunity in earnings among aging U.S. populations between 2010-2020. While social class-based inequality decreased for certain classes of indices, the racial stratification component increased, driving overall rising inequality of opportunity. |
| Keywords: | Inequality of opportunity, stochastic dominance, stratification. |
| JEL: | I31 I32 Z13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ott:wpaper:2503e |
| By: | Julia Peter (Friedrich Schiller University Jena); Jana Schuetz (Jonkoping International Business School) |
| Abstract: | Financial literacy is an important prerequisite for making informed financial decisions, but it remains low, especially among women and older people. Internalized stereotypes can undermine confidence and subsequently affect behavior in financial matters, leading to suboptimal decisions. This paper investigates how stereotype salience affects confidence in financial literacy. In an information provision experiment, we inform respondents about age or gender differences in numeracy to examine the impact on financial literacy, confidence, hypothetical investment and saving decisions, and demand for information and education. We find that being informed about age differences has no significant effect. In contrast, being informed about gender differences increases the confidence of male respondents through a stereotype boost, while leaving female respondents largely unaffected. |
| Keywords: | survey experiment, numeracy, gender stereotypes, age stereotypes |
| JEL: | C90 D91 G53 I24 J16 |
| Date: | 2025–05–16 |
| URL: | https://d.repec.org/n?u=RePEc:jrp:jrpwrp:2025-0007 |
| By: | Angela Wyse; Bruce D. Meyer |
| Abstract: | We examine the causal effect of health insurance on mortality using the universe of low-income adults, a dataset of 37 million individuals identified by linking the 2010 Census to administrative tax data. Our methodology leverages state-level variation in the timing and adoption of Medicaid expansions under the Affordable Care Act (ACA) and earlier waivers and adheres to a preregistered analysis plan, a rarely used approach in observational studies in economics. We find that expansions increased Medicaid enrollment by 12 percentage points and reduced the mortality of the low-income adult population by 2.5 percent, suggesting a 21 percent reduction in the mortality hazard of new enrollees. Mortality reductions accrued not only to older age cohorts, but also to younger adults, who accounted for nearly half of life-years saved due to their longer remaining lifespans and large share of the low-income adult population. These expansions appear to be cost-effective, with direct budgetary costs of $5.4 million per life saved and $179, 000 per life-year saved falling well below valuations commonly found in the literature. Our findings suggest that lack of health insurance explains about five to twenty percent of the mortality disparity between high- and low-income Americans. We contribute to a growing body of evidence that health insurance improves health and demonstrate that Medicaid’s life-saving effects extend across a broader swath of the low-income population than previously understood. |
| JEL: | H0 I1 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33719 |
| By: | Sanny Boy Domingo Afable (Max Planck Institute for Demographic Research, Rostock, Germany); Megan Evans (Max Planck Institute for Demographic Research, Rostock, Germany); Kaarina Korhonen; Yana C. Vierboom (Max Planck Institute for Demographic Research, Rostock, Germany); Pekka Martikainen (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany); Hill Kulu (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Closer distance between parents and their children facilitates intergenerational contact and exchanges of support in later life. There are mixed narratives and evidence regarding the divergence—or convergence—of intergenerational proximity in ageing societies. In this study, we examine the trends and structural drivers of intergenerational distance and co-residence in a rapidly ageing high-income society. We analyse register data from Finland, a country commonly characterised by weak family ties and a strong social welfare system. Using fine-scale geographic units and real-world navigation data to compute travel times, we examine the proximity of parents aged 60-69 to their children aged 18+ from 2003 to 2017, specifically analysing trends in distance and co-residence between fathers and sons, fathers and daughters, mothers and sons, and mothers and daughters. We then decompose the contribution of changing sociodemographic composition of the population on changes in these outcomes. We find that while co-residence is low (10% with sons and 5% with daughters in 2017), more than half of Finnish parents live within 30 minutes by car journey to their nearest, non-coresident child, with parents living 5 minutes farther away from their daughters than their sons. From 2003 to 2017, the average distance to the nearest, non-coresident child increased by 10% to 19% or 2-5 minutes, with father-daughter distance showing the greatest increase. While this suggests that ageing parents and adult children are living farther apart, we find that compositional changes—including educational expansion and increased divorce rates among parents, as well as the decline in co-residence with sons—underlie this geographic divergence. |
| Keywords: | Finland, ageing, human geography, residential mobility, spatial distance |
| JEL: | J1 Z0 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2025-011 |
| By: | Kuhn, Sarah (Institute for Employment Research (IAB), Nuremberg, Germany); Schwengler, Barbara (Institute for Employment Research (IAB), Nuremberg, Germany); Seibert, Holger (Institute for Employment Research (IAB), Nuremberg, Germany); Wiethölter, Doris (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "The demographically induced decline in labour force potential will vary from region to region and according to skill level. Particularly in rural areas and in eastern Germany, young employees will not be able to compensate for the retirements of the babyboomer generation. Foreign workers are playing an increasingly important role in compensating for the labour shortage, especially at the helper and skilled labour level." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; Ostdeutschland ; Westdeutschland ; IAB-Open-Access-Publikation ; Ausländerbeschäftigung ; ausländische Arbeitnehmer ; Auswirkungen ; Beschäftigtenstruktur ; Beschäftigungsentwicklung ; demografischer Wandel ; Einwanderer ; Erwerbspersonenpotenzial ; Altersstruktur ; regionaler Vergleich ; qualifikationsspezifische Faktoren ; Arbeitskräftemangel ; 2015-2024 |
| Date: | 2025–05–13 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabkbe:202508 |
| By: | Tomoya Mori (Institute of Economic Research, Kyoto University); Daisuke Murakami (Institute of Statistical Mathematics) |
| Abstract: | This study develops a statistical model that integrates economic agglomeration theory and power-law distributions of city sizes to project future population distribution on 1-km grid cells. We focus on Japan - a country at the forefront of rapid population decline. Drawing on official population projections and empirical patterns from past urban evolution in response to the development of high-speed rail and highway networks, we examine how ongoing demographic contraction and expected reductions in distance frictions may reshape urban geography. Our analysis suggests that urban economies will consolidate around fewer and larger cities, each of which will experience a flattening of population density as the decentralization of urban populations accelerates, while rural areas are expected to experience further depopulation as a result of these spatial and economic shifts. By identifying sustainable urban cores capable of anchoring regional economies, our model provides a framework for policymakers to manage population decline while maintaining resilience through optimized infrastructure and resource allocation focused on these key urban centers. |
| Keywords: | Population decline, Cities, Agglomeration, Sustainability, Distance friction, Power law |
| JEL: | R11 R12 R23 R58 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:kyo:wpaper:1117 |
| By: | Hamermesh, Daniel S. (University of Texas at Austin) |
| Abstract: | This study examines publications in three leading general economics journals from the 1960s through the 2020s, considering levels and trends in the demographics of authors, methodologies of the studies, and patterns of co-authorship. The average age of authors has increased nearly steadily; there has been a sharp increase in the fraction of female authors; the number of authors per paper has risen steadily; and there has been a pronounced shift to articles using newly generated data. All but the first of these trends have been most pronounced in the most recent decade. The study also examines the relationships among these trends. |
| Keywords: | sociology of economics, co-authors, authorship |
| JEL: | A14 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17863 |