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on Economics of Ageing |
| By: | Virginia Sánchez-Marcos; Javier Fernández-Blanco |
| Abstract: | Social Security retirement programs are designed to provide full insurance against longevity risks through a progressive scheme. In line with previous work on earnings and race, we document, using HRS data, 2.5- and 5.5-year life-expectancy gaps by wealth and health at age 56, respectively. Such significant differences in life expectancy reduce the progressivity feature of the program. We examine the welfare costs of ignoring life expectancy conditional on wealth and health at the claiming age in a parsimonious way, by adding a wealth- or health-based correction factor to the current program. We build a rich life-cycle model in which married men decide their savings, labor supply and benefits-claiming age, and are heterogeneous in many dimensions, in particular in their fixed health type. We find that the welfare losses of ignoring differences in life expectancy by wealth and health at the claiming age are equivalent to a permanent consumption fall of 2.22% and 0.30%, respectively. Moreover, the effects are very heterogeneous across health types. |
| Keywords: | health, labor force participation, Life Expectancy, retirement benefits, Wealth |
| JEL: | J22 I14 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1556 |
| By: | Criscent Birungi; Cody Hyndman |
| Abstract: | The decision to annuitize wealth in retirement planning has become increasingly complex due to rising longevity risk and changing retirement patterns, including increased labor force participation at older ages. While an extensive literature studies consumption, labor, and annuitization decisions, these elements are typically examined in isolation. This paper develops a unified stochastic control and optimal stopping framework in which habit formation and endogenous labor supply shape retirement and annuitization decisions under age-dependent mortality. We derive optimal consumption, labor, portfolio, and annuitization policies in a continuous-time lifecycle model. The solution is characterized via dynamic programming and a Hamilton-Jacobi-Bellman variational inequality. Our results reveal a rich sequence of retirement dynamics. When wealth is low relative to habit, labor is supplied defensively to protect consumption standards. As wealth increases, agents enter a work-to-retire phase in which labor is supplied at its maximum level to accelerate access to retirement. Human capital acts as a stabilizing asset, justifying a more aggressive pre-retirement investment portfolio, followed by abrupt de-risking upon annuitization. Subjective mortality beliefs are a key determinant in shaping retirement dynamics. Agents with pessimistic longevity beliefs rationally perceive annuities as unattractive, leading them to avoid or delay annuitization. This framework provides a behavior-based explanation for low annuity demand and offers guidance for retirement planning jointly linking labor supply, portfolio choice, and the timing of annuitization. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.02816 |
| By: | Hong Beng Lim; Mengyi Xu; Kenneth Q. Zhou |
| Abstract: | Extant literature on fair pricing methods for actuarial contexts has primarily focused on the regression setting. While such approaches are well-suited to short-term products, it is unclear how they generalize to long-term products, whose pricing essentially relies on estimating transition rates in multi-state models. To address this gap, we propose a unified framework that recasts the estimation of any given multi-state transition model as a set of Poisson regression problems. This reformulation enables the direct application of existing fair pricing methods, which together constitute our proposed methodology. As an illustration, we apply the framework to a fair pricing exercise for a stylized long-term care insurance product using data from the University of Michigan Health and Retirement Study (HRS), focusing on a post-processing approach. We further explain how the framework readily accommodates pre-processing and in-processing fairness methods. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.04791 |
| By: | Judith Méndez (School of Government and Public Transformation, Tecnológico de Monterrey); Héctor J. Villarreal (School of Government and Public Transformation, Tecnológico de Monterrey); Hermilo Cortés (School of Government and Public Transformation, Tecnológico de Monterrey) |
| Abstract: | This research develops a dynamic and stochastic partial equilibrium model with overlapping generations to simulate the effects of health condition, whether good or poor, on household consumption and indebtedness. While fiscal imbalances caused by pension system structures are currently a pressing issue, the effects of population health status will increasingly become evident in a country’s economy, particularly in consumption levels and indebtedness due to higher healthcare expenditures. Household savings levels would be under pressure to cope with unexpected expenses such as out-of-pocket health expenditures. In the model, these outof-pocket expenses are covered through a subsidy, and the government does not directly provide health services but operates a transfer scheme that partially insures households against catastrophic out-of-pocket health expenditures. In order to show the model’s capabilities, México will be used as case study. The results display a consumption pattern gap that worsens due to poor health conditions. Additionally, income levels stagnate around the same age at which the proportion of health-related expenditure needs begin to rise and increase relative to income levels. Long-term fiscal sustainability is at risk, not only due to the lack of current attention, but also resources allocated to adults and elderly could limit investment in the health of new generations, thereby compromising human capital in the future. |
| Keywords: | Macroeconomic Equilibrium, Health Economics, Overlapping Generations, Life-Cycle Model, Out-of-Pocket Expenditures, Fiscal Sustainability, Population Aging, Income Inequality, Health Shocks, Precautionary Savings, Mexico |
| JEL: | H83 K42 C38 O33 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:gnt:wpaper:25 |
| By: | David C. Grabowski; Jonathan Gruber; Brian E. McGarry |
| Abstract: | We measure the impact of increased immigration on mortality among elderly Americans, who rely on the immigrant-intensive health and long-term care sectors. Using a shift-share approach we find a strong impact of immigration on the size of the immigrant care workforce: admitting 1, 000 new immigrants would lead to 142 new foreign healthcare workers, without evidence of crowd out of native health care workers. We also find striking effects on mortality: a 25% increase in the steady state flow of immigrants to the US would result in 5, 000 fewer deaths nationwide. We identify reduced use of nursing homes as a key mechanism driving this result. |
| JEL: | I18 J61 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34791 |
| By: | Marcela Meléndez; Nicolas Peña Tenjo; Laura Tenjo |
| Abstract: | Colombia has a complex legal framework meant to protect the population against basic risks through a combination of contributory and non-contributory social insurance. The population is almost perfectly split between them, with eligibility to participate in the latter determined by poverty. Health insurance works relatively well under both. In contrast, protection against old age works poorly. Only 20 out of every 100 workers fulfil the requirements for a contributory pension because of a high informality rate (56 per cent) and frequent worker transitions in and out of formality. |
| Keywords: | Colombia, Social protection, Insurance, Social assistance, Labour market |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2026-9 |
| By: | Asya Bellia (Bocconi University); Valeria Bellini (Generali S.p.A); Agar Brugiavini (Ca’ Foscari University of Venice); Raluca Elena Buia (Ca’ Foscari University of Venice); Diego Ciccone (Generali S.p.A); Silvia D’Arrigo (Ca’ Foscari University of Venice); Vincenzo Galasso (Bocconi University); Francesco Geremia (Generali S.p.A); Federica Martinelli (Generali S.p.A); Chiara Signorello (Generali S.p.A) |
| Abstract: | By employing micro-data from the SHARE survey and the ISTAT Multipurpose survey, we assess the unmet demand for long term care of older Italians and identify the groups of individuals that are at higher risk of lack of protection. We measure frailty/dependence based on an adaptation of the Katz index, which makes use of the number of limitations in the activities of daily living ADL. We propose different models to identify the determinants of the probability of experiencing frailty in later life and introduce a novel concept of "pre-frailty". Our results indicate that lower levels of education, being a woman and residing in Southern Italy are associated with increased likelihood of being pre-frail/frail. Living alone significantly affects dependence as measured by frailty or pre-frailty at older ages. The potential demand for long term care services is compared with the existing coverages, both public and private: a marked and widespread lack of protection emerges for people who are mostly in need, with very high potential costs for individuals, households and society at large. |
| Keywords: | frail, prefrail, long-term care, activities of daily living, SHARE, unmet demand for care |
| JEL: | I13 I14 J38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2026:03 |
| By: | Brenzel-Weiss, Janosch; Koeniger, Winfried; Valladares-Esteban, Arnau |
| Abstract: | We calibrate a lifecycle portfolio-choice model of homeowners facing uninsurable income risk to show that tax deductions for mortgage interest payments and voluntary pension contributions have sizable effects on household portfolios and macroprudential risks. The deductions reduce the after-tax cost of debt and increase the after-tax return of pension savings so that the mortgage incidence increases and portfolios shift from home equity and liquid assets towards pension savings. Because the consumption responses to a house-price decline are heterogeneous, the distribution of household debt shapes the quantitative effect of the tax deductions on the homeowners' resilience after a house price bust. |
| Keywords: | Mortgage amortization, Tax incentives, Household consumption, Portfolio choice, Housing busts, Economic stability, Macroprudential policy |
| JEL: | D14 D15 D31 E21 G11 G21 H24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cfswop:336755 |
| By: | Tiancheng Wang; Krishna Sharma |
| Abstract: | We develop an iterative framework for economic measurement that leverages large language models to extract measurement structure directly from survey instruments. The approach maps survey items to a sparse distribution over latent constructs through what we term a soft mapping, aggregates harmonized responses into respondent level sub dimension scores, and disciplines the resulting taxonomy through out of sample incremental validity tests and discriminant validity diagnostics. The framework explicitly integrates iteration into the measurement construction process. Overlap and redundancy diagnostics trigger targeted taxonomy refinement and constrained remapping, ensuring that added measurement flexibility is retained only when it delivers stable out of sample performance gains. Applied to a large scale public employee retirement plan survey, the framework identifies which semantic components contain behavioral signal and clarifies the economic mechanisms, such as beliefs versus constraints, that matter for retirement choices. The methodology provides a portable measurement audit of survey instruments that can guide both empirical analysis and survey design. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.02604 |
| By: | Mathias Celis; Kris Boudt; Mona Bassleer; Wouter Duyck; Stijn Schelfhout; Nicolas Dirix (-) |
| Abstract: | In an online vignette study involving 15, 593 participants, we investigated the effectiveness of various nudging interventions, including defaults, pre-commitment strategies, evaluative labels, social norms, and their combinations, on annuity uptake decisions within the occupational pension scheme. Participants decided how to allocate their pension funds between a lump sum and an annuity using a continuous decision slider, offering a more flexible alternative to traditional binary choices. Our findings revealed a small but statistically significant effect of pre-commitment strategies on annuitization. However, contrary to expectations, all other interventions (defaults, social norms, evaluative labels, and their combinations) showed no significant effect on annuity uptake. Notably, we observed a consistent decision pattern across all conditions. On average, across all conditions, 51.2% of participants opted for less than 5% annuity uptake, 34.5% chose a mix, with a significant peak of 13% at exactly 50% annuity uptake, and 14.3% selected more than 95% annuity. This clustering around round numbers suggests a "round number bias" influenced by the 0–100% continuous scale used, where participants gravitated towards cognitively straightforward, salient options. These findings align with recent debates questioning the general effectiveness of nudging interventions, particularly in complex financial decisions, often involving deeply rooted preferences. The present study highlights the limitations of nudges in shifting behavior as our study also underscores the need for a better understanding of the driving forces behind annuity uptake rationales to effectively influence annuity uptake decisions. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:26/1134 |
| By: | Patrick Aubert (IPP - Institut des politiques publiques); Carole Bonnet (INED - Institut national d'études démographiques) |
| Abstract: | Ce document présente une synthèse des résultats du projet de recherche « Règles de réversion : effectivité et implications », réalisé dans le cadre d'une convention de partenariat entre le COR, l'IPP et l'Ined. Ce projet s'intéresse aux politiques de réversion au sein du système de retraite français. Il a été pensé dans le cadre d'un projet de recherche Ined-IPP plus large, le projet MARITAL, financé par l'Agence Nationale de la Recherche à partir de l'automne 2025 et qui porte sur les interactions entre comportements conjugaux et système de retraite et sur le rôle de la situation conjugale dans la formation des inégalités au sein des retraités. En particulier, une des interrogations à laquelle devrait répondre ce projet porte sur la manière dont la protection financière que représente la pension de réversion pour les conjoints peut affecter les comportements conjugaux des seniors. Mais pour cela, deux étapes sont nécessaires au préalable : d'abord, la réglementation en matière de réversion est-elle effectivement et pleinement mise en œuvre ? En particulier, une fois la réversion liquidée, évolue-t-elle vraiment, comme le prévoit la réglementation, en cas de changement ultérieur de situation conjugale ou de ressources, ce qui pourrait influer sur les comportements conjugaux ? Ensuite, à quel montant de réversion les retraités actuels pourront-ils prétendre, compte tenu des règles en vigueur aujourd'hui – connaître l'ampleur de la réversion future étant nécessaire pour évaluer le degré de protection financière apporté (ou non) par la réversion pour les individus actuellement en couple à la retraite. |
| Keywords: | retraite, réversion, veuvage |
| Date: | 2025–10–16 |
| URL: | https://d.repec.org/n?u=RePEc:hal:ipppap:halshs-05415418 |
| By: | Beatriz Muriel H. (Directora Ejecutiva de INESAD); Alejandro Herrera J. (Investigador asociado de INESAD); M. Cecilia Lenis A. (Investigadora junior de INESAD) |
| Abstract: | This paper uses a multidimensional framework that incorporates constraints of accessibility, affordability, and acceptability to examine the determinants of effective access to the contributory component of Bolivia’s pension system. Using nationally representative household surveys from 2005 and 2019, we evaluate the influence of labor-market segmentation, financial capacity, informational barriers, and sociocultural factors on workers’ likelihood of affiliation. To address key empirical challenges, including nonlinearity, non-random selection into employment, and perfect or near-perfect prediction, we estimate Probit, Heckprobit, and Firth–Logit models and compute gender-specific average marginal effects. The results indicate persistent structural barriers across periods and settings. Self-employment, unpaid work, and low or unstable earnings consistently reduce affiliation. Informational constraints and distrust were decisive in 2005, while digital access became a critical determinant by 2019. Sociocultural factors, particularly Indigenous identity, also emerged as significant acceptability constraints in the later period. Gender differences in affiliation mainly reflect disparities in employment status, income, and access to information, rather than heterogeneous behavioral responses. Overall, the findings underscore the need for integrated policies that address informational gaps, financial constraints, and labor-market segmentation to bolster access to the contributory component of Bolivia’s pension system. |
| Keywords: | Pension systems, social protection, informality, labor markets, gender gaps, access barriers, selection models, nonlinear probability models. |
| JEL: | J26 H55 J21 C35 D14 O54 I38 J16 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:adv:wpaper:202509 |
| By: | Toama Boke Aime ARNAULD; Junichi FUJIMOTO; Minchung HSU |
| Abstract: | Japan faces a dual demographic challenge: persistently low fertility and underutilization of female labor. This paper develops a quantitative life-cycle model with heterogeneous agents to study how the spousal tax system and the social norm of unequal gender division of childcare jointly shape marriage, fertility, and women’s labor supply decisions. The model incorporates endogenous marriage, fertility, and female labor participation choices, calibrated to Japanese data, and evaluates a series of counterfactual policy experiments. We find that the spousal tax treatment is a key disincentive to women’s labor market participation. Eliminating tax benefits and deductions increases female labor supply but reduces marriage and fertility. Childcare subsidies partly offset these effects by raising household resources and encouraging women’s market participation, though their effectiveness is limited in the presence of restrictive social norms. Once the childcare norm is relaxed, however, subsidies become more effective: they simultaneously raise fertility, stabilize marriage, and boost women’s labor supply across all life stages. These findings suggest that achieving both higher fertility and higher female labor force participation in Japan requires a dual strategy: financial support for childrearing and broader institutional and cultural reforms. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26014 |
| By: | Denise Polonio |
| Abstract: | Diante do envelhecimento da população global, notadamente no Brasil, onde se observa um aumento constante do número de idosos, o mercado imobiliário precisa evoluir e atender às novas exigências sociais e econômicas. Dados do IBGE revelam que a parcela de brasileiros com 60 anos ou mais deve saltar de 15% em 2020 para cerca de 25% em 2040, evidenciando uma notável transformação demográfica.Tal cenário gera uma carência por moradias que atendam às necessidades específicas dessa faixa etária, que em grande parte são dispendiosas ou carecem de qualidade arquitetônica. Para facilitar o acesso à moradia para essa população, é crucial desenvolver alternativas inovadoras de financiamento. Embora a aposentadoria ofereça uma certa segurança ao financiador, o risco persiste, especialmente em face de imprevistos, como o falecimento do contratante antes da quitação do financiamento. Nesse quadro, instrumentos como seguros de vida e invalidez, garantias imobiliárias e títulos de crédito podem minimizar esses riscos, tornando os empréstimos mais interessantes para os bancos.A implementação de modelos de financiamento customizados, aliada a projetos de construção sustentáveis e acessíveis, em consonância com as normas da ONU e os 17 Objetivos de Desenvolvimento sustentável (ODS) da Agenda 2030, é indispensável. Tais medidas fomentam moradias seguras, integradoras e ecologicamente responsáveis, abrindo caminho para um futuro mais sustentável e justo para o setor imobiliário brasileiro. |
| Keywords: | aging population; envelhecimento; financiamento imobiliário; inclusão social; real estate financing; Resilience; Resiliência; social inclusion; sustainability; Sustentabilidade |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:lre:wpaper:lares-2025-115 |