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on Economics of Ageing |
| By: | Lindsay Jacobs; Suphanit Piyapromdee |
| Abstract: | Partial and reverse retirement are two key behaviors characterizing labor force dynamics for individuals at older ages, with half working part-time and over a third leaving and later re-entering the labor force at some point. The high rate of exit and re-entry is especially puzzling when considering the flat and declining wage profiles observed at older ages and uncertainty about future re-employment. Using Health and Retirement Study (HRS) data, we document the timing and prevalence of these behaviors and show that reverse retirees resemble permanent retirees across many observables, but differ notably in reported job stress and polygenic scores linked to stress sensitivity. To understand what drives these behaviors, we develop and estimate a dynamic model of retirement that incorporates uncertainty in wages and health, along with a novel “burnout-recovery†process representing the accumulation and dissipation of work-related stress. The model replicates key patterns in the data, accounting for over two-thirds of reverse retirement and 40 percent of transitions to part-time work—patterns that cannot be explained by health or wealth shocks alone. Our findings suggest that reverse retirement is largely a predictable response to recoverable stress rather than a reaction to shocks. Policy simulations show that part-time subsidies and sabbaticals enhance labor force attachment and welfare by reducing burnout, while eliminating the Retirement Earnings Test raises re-entry but also increases stress exposure. Together, these findings highlight the central role of stress dynamics in shaping retirement behavior and inform the design of policies to support work at older ages. |
| Keywords: | Retirement; Mental Health; Burnout |
| JEL: | J26 I12 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:pui:dpaper:238 |
| By: | Yang, Tianli (Renmin University of China); Zhao, Zhong (Renmin University of China) |
| Abstract: | This paper examines the impact of Long-Term Care Insurance (LTCI) policy on the development of elderly care enterprises in China. Employing a policy shock and a difference-in-differences design, we find that the implementation of LTCI significantly promotes the the number of new entries and survival rate of elderly care enterprises, particularly for individual businesses, enterprises in the health and social work industry, and those located in eastern regions. Notably, service-only LTCI policy exhibits stronger effect on the development of elderly care enterprises compared to policy combining service and cash benefits. Mechanism analysis suggests that LTCI stimulates market demand for formal elderly care services and increases government expenditures on social security and healthcare, both of which drive the development of elderly care enterprises. We also find that LTCI policy boosts labor demand in the elderly care industry. Overall, our empirical findings suggest that LTCI can help address the shortage of long-term care services and enhance family welfare. |
| Keywords: | elderly care enterprises, long-term care insurance, China |
| JEL: | H55 I28 J14 J26 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18104 |
| By: | Lavecchia, Adam M. (McMaster University); Stutely, James |
| Abstract: | This paper documents sharp bunching in third-party reported employment earnings at a basic exemption for social security contributions among older workers. Beginning in 2012, workers age 60-64 who were receiving a public pension were required to make social security contributions equal to 9.9 percent of their employment earnings above a basic exemption threshold of $3, 500. Using administrative data on third-party reported earnings and a differences-in- bunching estimator we document sharp bunching at the $3, 500 threshold. We argue that our results represent new evidence on the role of firms in mediating the earnings response to payroll taxes. |
| Keywords: | sharp bunching, social security contributions, employment earnings |
| JEL: | H20 H24 H25 H31 H32 H55 J22 J23 J38 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18106 |
| By: | Jurado, Elvis |
| Abstract: | This study investigates the long-term macroeconomic and welfare impacts of transitioning from a Pay-As-You-Go to a fully funded pension system, specifically within the Ecuadorian economic context. The study is motivated by financial and demographic challenges that threaten the sustainability of the current pension structure. Understanding the effects of such a transition is essential for informed implementation. The research has two primary objectives: first, to simulate this reform under various economic shocks, particularly changes in oil income and interest rates given that variability in oil revenues directly affects the economy as oil is Ecuador’s main source of income; and second, to evaluate how the timing of the changes influences welfare outcomes across generations. The analysis is based on a transition from a Pay-As-You-Go system to a Fully Funded system, allowing for a more flexible response to demographic and fiscal pressures. To achieve this, a calibrated Overlapping Generations model is employed, integrated with a Small Open Economy framework and tailored to Ecuadorian data. This model allows for simulation of the pension reform under different macroeconomic conditions and transition scenarios. Findings suggest that while a fully funded system may increase welfare in the new steady-state equilibrium relative to a PAYG system reflecting the right timing for replacing the social security system under a general equilibrium model positive economic shocks can produce large welfare gains. However, welfare outcomes during the transition period remain highly sensitive to shocks, which in some scenarios can cause net losses for certain generations. The impact varies depending on the type of shock and the timing of reform implementation. These results highlight the importance of timing and economic context when designing pension policy. A poorly timed reform could reduce expected benefits, even if long-term outcomes appear favorable. |
| Keywords: | Overlapping Generations, Welfare, Smal Open Economy, Demography, Ageing |
| JEL: | C61 C63 E21 E24 I31 |
| Date: | 2025–08–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125793 |
| By: | Grant Miller (Institute for Fiscal Studies); Nieves Valdés (Universidad Adolfo Ibáñez); Marcos Vera-Hernandez (Institute for Fiscal Studies) |
| Date: | 2025–09–08 |
| URL: | https://d.repec.org/n?u=RePEc:ifs:ifsewp:25/31 |
| By: | Masaya Yasuoka (School of Economics, Kwansei Gakuin University) |
| Abstract: | In macroeconomics, the Ramsey model and the two-period overlapping generations (OLG) model are regarded as standard frameworks. The latter is widely used due to its simplicity and its ability to explain a variety of economic phenomena. Although three-period models also exist, they are often constrained by analytical limitations, such as the inability to incorporate capital accumulation. As multi-period models, the altruism-based Ramsey model and the continuous-time OLG model have been developed; however, neither is well-suited for analyzing independent decision-making across generations, elderly labor supply, or pay-as-you-go pension schemes. Against this background, this paper constructs a four-period model consisting of youth, middle age, early old age, and late old age. By incorporating Romer-type capital externalities, it analytically derives the complex capital accumulation equations and theoretically demonstrates the existence, stability, and potential multiplicity of steady states. |
| Keywords: | Overlapping Generations Model, Dynamics of Capital Stock |
| JEL: | E0 H2 J1 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:kgu:wpaper:297 |
| By: | Raphael Chinchilla; Thomas D. Rueter; Timothy R. McDade; Peter R. Fisher; Emmanuel Candes; Trevor Hastie; Stephen Boyd |
| Abstract: | This paper proposes a simulation-based framework for assessing and improving the performance of a pension fund management scheme. This framework is modular and allows the definition of customized performance metrics that are used to assess and iteratively improve asset and liability management policies. We illustrate our framework with a simple implementation that showcases the power of including adaptable features. We show that it is possible to dissipate longevity and volatility risks by permitting adaptability in asset allocation and payout levels. The numerical results show that by including a small amount of flexibility, there can be a substantial reduction in the cost to run the pension plan as well as a substantial decrease in the probability of defaulting. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.13350 |
| By: | Heger, Dörte; Herr, Annika |
| Abstract: | In diesem Forschungsprojekt zur Versorgung von Langzeitpflege in Deutschland werden fünf Perspektiven zu Personalmangel, Pflegekapazitäten sowie Auswirkungen auf Pflegequalität in Pflegeheimen beleuchtet. Die erste Perspektive betrachtet demografische, sozio-ökonomische und strukturelle Faktoren, die zur Entwicklung des Pflegepersonalmangels beigetragen haben. Die Ergebnisse zeigen im Bereich der Fachkräfte im stationären, aber auch im ambulanten Bereich eine deutliche Zunahme an offenen Stellen und identifizieren strukturelle, sozio-ökonomische sowie über den Bereich der Altenpflege hinausgehende Faktoren. Darüber hinaus wird der Zusammenhang zwischen Pflegepersonalmangel und Pflegekapazitäten analysiert. Hierbei zeigt sich, dass eine höhere Zahl ausgeschriebener Stellen mit einem geringeren Personal-Gepflegten-Verhältnis einhergeht sowie fehlende Fachkräfte durch Hilfskräfte ersetzt werden. Die zweite Perspektive betrachtet wie der Personaleinsatz die Pflegequalität beeinflusst. Die Ergebnisse zeigen, dass eine höhere Anzahl an examinierten Pflegefachkräften zu besseren Pflegequalitätsergebnissen für Pflegeheimbewohner führt, während Pflegehilfskräfte keinen Einfluss auf die beobachteten objektiven Qualitätsmaße haben. Die dritte Perspektive widmet sich der Analyse der Nachfrage nach ambulanter und stationärer Pflege sowie der Qualität unter Kapazitätsbeschränkungen. Das ist zweigeteilt und konzentriert sich 1) Auf die regionale Variation der Nachfrage nach Pflegeheimen gegeben das Angebot und die Pflegebedürftigkeit und 2) auf die Qualität ambulanter Pflegedienste bei steigender regionaler Dichte, wobei für die Nachfrage kontrolliert wird. Die vierte Perspektive zeigt den Zusammenhand zwischen Krankenhausverweildauer und professionellem Pflegeangebot. Unsere Auswertungen zeigen, dass die Verweildauer für Menschen, die erstmal eine Pflegeheimplatz suchen, höher ist als für Menschen, die bereits vor dem Krankenhausaufenthalt bereits im Pflegeheim lebten oder die nach dem Krankenhausaufenthalt wieder in die eigene Häuslichkeit zurückkehren können. Die fünfte Perspektive untersucht den Effekt von Einzelzimmerquoten. Die Analysen zeigen, dass höhere Einzelzimmeranteile mit einer signifikanten Reduzierung der Kapazitäten in Pflegeheimen einhergehen und sich die Nachfrage in Richtung informeller Pflege verlagert. Insgesamt verdeutlichen diese Perspektiven die Komplexität der Pflegelandschaft und unterstreichen die Dringlichkeit, innovative Lösungen zu finden, um die Qualität der Pflege zu sichern und den wachsenden Herausforderungen der alternden Gesellschaft gerecht zu werden. |
| Abstract: | This research project on long-term care provision in Germany, examines five perspectives on staffing shortages, care capacities, and their impact on the quality of care in nursing homes. The first perspective examines potential demographic, socioeconomic, and structural factors that have contributed to the development of the nursing staff shortage. The results show a considerable increase in vacancies for skilled nurses in nursing homes but also for ambulatory care, and identify structural and socioeconomic factors as well as factors without a direct link to LTC. We further analyze the relationship between a shortage of care personnel and care capacities. Our findings reveal that a higher number of advertised positions is associated with a lower staff-to-patient ratio and that nursing homes compensate for the lack of skilled staff by hiring auxiliary staff. The second perspective second perspective examines how staffing influences care quality. The results show that a higher number of registered nurses leads to better care quality out-comes for nursing home residents, while nursing assistants have no influence on the observed objective quality measures. The third perspective focuses on analyzing the demand for both home and institutional care, as well as quality under capacity constraints. The project focusses on 1) regional variation in demand for nursing homes given supply and care needs and 2) the home health care providers’ quality when density increases controlling for changes in demand. The fourth perspective shows the relationship between hospital length of stay and available professional care. Our analyses show that the length of stay is higher for individuals who seek a nursing home placement for the first time than for individuals who were already living in a nursing home before their hospital stay or who return to their own homes. The fifth perspective examines the impact of introduced single-room quotas. Our initial analyses indicate that higher shares of single rooms correlate with a significant reduction in care capacities in nursing homes and a shift in demand towards informal care. Overall, these perspectives underscore the complexity of the care landscape and emphasize the urgency of finding innovative solutions to ensure the quality of care and meet the growing challenges of an aging society. |
| Keywords: | Abschlussbericht, DFG-Projekt, Langzeitpflege, Pflegequalität, Gesundheitsökonomie |
| JEL: | I11 I13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esrepo:325315 |
| By: | Christine Ho (School of Economics, Singapore Management University) |
| Abstract: | This Special Issue brings together nine papers that examine how families allocate time and money across generations. Spanning aging societies in East Asia to informal settlements in the Pacific, the contributions employ diverse methodological approaches, from natural experiments and policy variation to administrative data linkage and cross-generational panel surveys. The findings converge on a central insight: intergenerational transfers of time and money are not merely cultural practices, but systematic responses to changing economic environments and institutional frameworks. Family decisions are critical to the provision of long-term care, investment in children’s human capital, and the transmission of preferences, opportunities, and well-being across generations. Together, these studies highlight the importance of household economics for understanding and addressing the policy challenges of demographic transition, rising care demands, and the complex interplay between family resources and intergenerational outcomes. |
| Keywords: | Intergenerational Transfers; Long-term Care; Fertility; Investment in Children; Intergenerational Tr |
| JEL: | D13 D64 I14 J13 J14 J22 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ris:smuesw:021527 |