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on Economics of Ageing |
| By: | Andersen, Torben M; Borgbjerg, Anne Katrine; Maibom, Jonas |
| Abstract: | We analyze how pension wealth influences retirement timing using 25 years of Danish administrative panel data on wealth and labor market status. Exploiting early-career variation in firm-specific mandatory pension contribution rates, we study labor supply decisions from age 55 onward. Greater pension wealth accelerates labor market exit: at age 63, the elasticity is about 0.3—an additional 100, 000 DKK (15, 000 USD) at age 55 reduces earnings by 1% at age 63. Effects intensify near statutory retirement age, driven by self-support and early occupational pension withdrawals. Mandatory savings raise retirement wealth but induce earlier exit, underscoring key behavioral responses for pension policy design. |
| Keywords: | Pension wealth |
| JEL: | J32 J26 J22 D14 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21013 |
| By: | María Cadaval-Sampedro; Santiago Lago-Peñas; Xoaquín Fernández-Leiceaga; Alejandro Domínguez-Lamela |
| Abstract: | The paper analyses the impact of demographic ageing on age-related public expenditure in the EU-27 over the period 1992-2024. The analysis covers healthcare, long-term care (LTC), and pensions. The results reveal three patterns. First, demographic effects are heterogeneous across countries, driven by short-run responses that vary by spending category—limited in healthcare, absent in LTC. Second, advanced ageing (80+) tends to be more important for long-run dynamics, especially in healthcare. Third, Central and Eastern European economies show weaker or delayed responses, while Western and Nordic countries exhibit stronger adjustments, more evident in healthcare and LTC than in pensions, reflecting the decisive role of institutional design. |
| Keywords: | Ageing, public expenditure, demographic change, European Union |
| JEL: | E60 E62 H20 H51 H55 J11 J14 |
| Date: | 2026–07–08 |
| URL: | https://d.repec.org/n?u=RePEc:ida:wpaper:wp2614 |
| By: | Bartscher, Alina; Mann, Katja |
| Abstract: | More and more countries around the world switch from defined-benefit, pay-as-you-go pension systems to funded, defined-contribution systems. This implies substantial wealth accumulation, yet simultaneously exposes individuals to investment risk. While it seems natural to expect that individuals' investment decisions in pension and non-pension accounts are related, there is little empirical evidence. We compile a new microdataset on Danish savers and document how pension and non-pension investment decisions are linked. We find substantial positive spillover effects between risk-taking in pension and non-pension investments. High-return pension savers also earn the highest return on their non-pension savings, driven by active risk choices. Pension and non-pension investment choices are often made at the same time. An important reason for this are joint responses to individual and aggregate events. Additionally, there are direct spillover effects from changes in stock market policies to pension savings behavior, and vice versa. |
| JEL: | D14 G11 G51 G41 E21 J26 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20930 |
| By: | Brülhart, Marius; Eyquem, Aurélien; Martínez, Isabel Z.; Rubolino, Enrico |
| Abstract: | We study how inheritance affects labor supply over the life cycle, and we quantify its aggregate impact. Tracking earnings histories around some 135, 000 inheritances and 5, 000 lottery wins, we exploit the quasi-random timing and size of these events to identify labor supply responses with high precision. Earnings responses are negative at all ages but peak between ages 55 and 64, largely due to early retirement. Inheritances generate smaller impact responses than comparable lottery wins, consistent with anticipation effects. Our estimates match the predictions of a life-cycle model with endogenous labor supply and early retirement. Aggregating model-based responses across the population, our point estimate of the GDP cost of inheritance is 1.1%. The timing, size, and anticipation of inheritance all contribute to shaping its macroeconomic consequences. |
| JEL: | J22 D31 D64 G51 H31 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20837 |
| By: | Ahammer, Alexander; Halla, Martin; Heckl, Pia; Winter-Ebmer, Rudolf |
| Abstract: | Long-term unemployment among older workers is particularly difficult to overcome. We study the impacts of a large-scale job guarantee program that offered up to two years of fully subsidized employment to long-term unemployed individuals aged 50 and above. Using a sharp age-based discontinuity in eligibility, we find that participation increased regular, unsubsidized employment by 43 percentage points two years after the program ended. The gains are driven by transitions into new firms and industries, rather than continued subsidized employment, and we find no evidence of displacement effects for non-participants or spillovers to family members. The program had no measurable short-run health effects. |
| Keywords: | Long-term unemployment; Temporary job guarantee; Subsidized employment; Health status |
| JEL: | J64 J08 J78 I14 H51 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20939 |
| By: | Bingley, Paul; Kreiner, Claus; Serena, Benjamin Ly |
| Abstract: | Socioeconomic inequality in longevity is typically measured using a single socioeconomic indi-cator such as education or income. We combine multiple indicators—education, income, occu-pation, wealth, and IQ scores—and apply machine learning to measure inequality in longevity. Using Danish population-wide data spanning 40 years, we track mortality for the 1942–44 birth cohorts from age 40 onwards to estimate life expectancy by socioeconomic status. Individuals at the top of the socioeconomic distribution live nearly 25 years longer than those at the bottom. The socioeconomic gradient in life expectancy becomes 50–150% steeper when using multiple indicators. |
| Keywords: | Inequality |
| JEL: | I14 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20836 |
| By: | Nicola Bianchi, Matteo Paradisi |
| Abstract: | Demographic shifts are reshaping the U.S. labor market, as the share of the population within the working age has begun to decline. This paper addresses the implications of this decline with a focus on within-firm dynamics. As longer lifespans and improved health lead more older workers to delay retirement, experienced employees are increasingly concentrated in high-paying managerial and leadership roles. The gap in management representation between workers over 50 and those under 30 has widened substantially over time, reflecting a growing age divide at the top of the wage distribution. While this greater availability of experienced workers can be beneficial for firms in the short-term, it can also generate “congestion effects†that can slow the advancement of younger cohorts. Reduced opportunities o move into high-paying and managerial jobs limit younger workers\' earnings growth and ability to make key life investments, and this congestion constrains the development of future managerial talent. The authors argue that this divide is best understood as a shift in fortunes across generations, where gains from experience for older workers come at the cost of decreased opportunities for younger workers. As firms benefit from potential short-term productivity gains, they also neglect long-term investments in the next generation of the labor force. The central task for firms and policymakers is thus to ensure that the benefits of longer and more productive careers for older workers do not come at the expense of the dynamism and opportunities that younger workers need to thrive. |
| Keywords: | labor markets, generational workforce shifts |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:cxx:wpaper:the-age-divide-in-the-american-workplace-3 |
| By: | Jansen, Kristy; Klingler, Sven; Ranaldo, Angelo; Duijm, Patty |
| Abstract: | Pension funds use interest rate swaps to hedge the interest rate risk arising from their liabilities. Analyzing regulatory data on Dutch pension funds, we show that pension funds with worse funding ratios, indicating greater fragility, use swaps more aggressively. These swap positions expose pension funds to the risk of margin calls, which can exceed 6% of their total assets, when interest rates rise. Pension funds respond to realized margin calls by selling safe government bonds with medium-term maturities. This procyclical selling behavior adversely affects the prices of the sold bonds and thereby exposes pension funds to market liquidity risk. |
| Keywords: | Pension funds; Fixed income; interest rate swaps; Liability Hedging; Liquidity risk; Price impact |
| JEL: | E43 G12 G18 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21095 |
| By: | Auclert, Adrien; Malmberg, Hannes; Rognlie, Matthew; Straub, Ludwig |
| Abstract: | We introduce an asset supply-and-demand approach to analyze the trajectory of US aggregate wealth, real interest rates, and fiscal sustainability. Our framework uses micro-founded and easy-to-implement sufficient statistics to quantify how shifts in demographics, inequality, and other forces affect asset market equilibrium. From 1950 to the present, rapid population aging, rising income inequality, increasing foreign demand for US assets, and declining productivity growth all contributed to a surge in asset demand. Asset supply initially fell, then turned around sharply, mainly driven by increases in government debt and the value of capitalized profits. Overall, asset demand won the race, and interest rates fell. Looking ahead to 2100, population aging will continue to strongly push up asset demand, but at current tax and benefit levels, asset supply will win the race, as rising entitlement costs push up government debt even more. While rising asset demand creates space for debt to eventually reach 250% of GDP without higher interest rates, stabilizing debt at any level requires a permanent fiscal adjustment of at least 10% of GDP. |
| Keywords: | Demographic change; R-star |
| JEL: | E21 E22 E43 H68 J11 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20813 |
| By: | Hu, Bo; Hancock, Ruth; Wittenberg, Raphael; Mayorga, Joaquín; Pauschardt, Julia |
| Abstract: | This paper presents updated projections prepared for the Department of Health and Social Care of demand for long-term care for older people and younger adults in England to 2043 and associated future expenditure. The projections were produced using updated versions of the Care Policy and Evaluation Centre’s aggregate long-term care projections models and the CARESIM microsimulation model developed by Ruth Hancock. The projections cover publicly funded social care for both older people and younger adults and privately funded social care for older people. The key findings of the research are: • Public expenditure on social services for older people is projected to rise under the current funding system from £12.4 billion in 2023 to £25.3 billion in 2043 at constant 2023 prices and under a set of base case assumptions about trends in the drivers of longterm care demand and in the unit costs of care services. • Public expenditure on social services for younger adults is projected to rise under the current funding system from £13.5 billion in 2023 to £21.7 billion in 2043 at constant 2023 prices and under a set of base case assumptions about trends in the drivers of longterm care demand and in the unit costs of care services. These findings need to be treated with some caution. They are based on a set of assumptions about future socioeconomic and demographic trends. They relate to current patterns of care and the current funding system and do not take account of any of the funding reforms which have been proposed in recent years. They do not allow for the potential impact of rising expectations or other behavioural changes. Our estimates for the base year of 2023/24 take account of mortality during the COVID-19 pandemic years through use of 2023/24 data on service users and expenditure, but the projections do not take account of the potential future long-term impacts of the pandemic on excess deaths, numbers of service users, or social care expenditure. Nor do they take account of the implementation of the Employment Rights Bill or of Fair Pay Agreements. |
| JEL: | I10 I18 H51 J14 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138891 |
| By: | Blanchard, Pablo; Fleitas, Sebastian; González Valdenegro, Rodrigo |
| Abstract: | We study the equilibrium welfare effects of using state-owned enterprises (SOEs) to discipline market power. We estimate a dynamic equilibrium model of Uruguay’s individual capitalization pension system, where a high-quality SOE competes with private firms in the presence of worker inertia. We find that the presence of a SOE lowers equilibrium fees and increases investment returns. Replacing it with a private firm would more than double its fee and raise private firms’ fees by 8 percent. Reducing inertia mitigates but does not offset privatization. Comparing policy instruments, we show that direct price regulation yields higher welfare gains than competition through an SOE. |
| Keywords: | Regulation |
| JEL: | L51 N2 H4 L21 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21152 |
| By: | Nynke de Groot (National Healthcare Institute); Bas van der Klaauw (Vrije Universiteit Amsterdam) |
| Abstract: | Active labor market programs targeted at older unemployed workers are often believed to be ineffective. We exploit a large-scale randomized experiment involving approximately 50, 000 older unemployed workers to evaluate an intensive job search assistance program that focuses on exploiting the social network. Participation in the program increases exits from unemployment insurance by 4.4 percentage points. Program participation reduces cumulative benefit payments by about €715, exceeding the program costs of €470. Participants compensate the reduced benefits receipt with higher earnings. We find that participants change their job search behavior according to the content of the program, and that both the trainer and the training group composition affect the program effectiveness. |
| Keywords: | Randomized experiment, older unemployed workers, ALMP, job search assistance, social network |
| JEL: | C93 J14 J64 |
| Date: | 2026–05–21 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20260018 |
| By: | Luiu, Carlo; Wandera, Amos; Bukachi, Vera; Day, Rosie |
| Abstract: | Despite significant discussions on transport inequalities in African cities, older people's mobility needs remain under-researched. To gain a deeper understanding of such issues, this study focuses on older people living in Kenyan informal settlements and uses the capability approach to investigate their options for mobility, activities and locations, barriers, coping strategies and unfulfilled mobility needs. The study employs a qualitative approach comprising four focus groups with 24 participants and a follow-on community engagement workshop with people aged above 50 years old living in the informal settlement of Kibera in Nairobi. The results indicate that older people face significant challenges in their everyday mobility. Living with poor health conditions, level of poverty, lack and poor quality of walking infrastructure, personal safety and ageist behaviour are the main factors shaping and affecting their mobility. The capability approach offers a framework to understand older people’s mobility practices and implications for wellbeing. It enables an analysis of how mobility is shaped by their needs, constraints and decision-making processes, and how this translates into participation in life. It also offers an exploration of how mobility enables and supports a wider capability set, outlining its multidimensional social impacts. |
| Date: | 2026–06–15 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:fkh7z_v1 |
| By: | Arthi, Vellore; Richardson, Gary; Van Orden, Mark |
| Abstract: | From 1900 to 1940, ordinary working- and middle-class families saved for retirement and contingencies via ordinary life insurance policies. These policies combined insurance and savings in a single financial instrument that paid its face value to insured individuals who survived until maturity and to beneficiaries if the insured died before the maturity date. The popularity of these policies peaked before WWII when a substantial share of all households and most of the middle class invested in them. This paper explains why these policies were the most popular savings vehicle of their day. Ordinary life policies were well suited to the early twentieth-century economic environment. They had good returns; low risks; tax advantages; and little correlation with returns of competing investments, like bank deposits, building and loan shares, postal savings deposits, real estate, or stocks. The policies protected households from poverty in old age, from the premature death of their breadwinner, and from other risks including disability and deflation. Understanding how households saved in the past has implications for a wide range of literatures in the social sciences. |
| JEL: | N21 N22 N31 N32 G22 G51 G52 J32 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20779 |
| By: | James Wabenga Yango |
| Abstract: | This paper develops a general equilibrium overlapping-generations model with endogenous fertility, in which firms accumulate both physical and artificial intelligence (AI) capital, and uses it to study the macroeconomic transmission of two structural disturbances: an AI technology shock and a longevity shock. The AI shock acts as a capital-demand disturbance: it raises all rates of return, most sharply the return to AI capital, reallocates investment from physical to AI capital, and produces a front-loaded output expansion that decays monotonically. The longevity shock acts as a saving-supply disturbance: it deepens the aggregate capital stock, compresses returns and the real interest rate, and generates hump-shaped, persistent dynamics. The two shocks move fertility in opposite directions: AI raises it modestly through an income effect, while longevity lowers it by strengthening the life-cycle saving motive and the cost of childrearing. A forecast-error variance decomposition attributes most aggregate volatility to the longevity shock, while the AI shock dominates the variance of the return to AI capital. Fertility is strongly countercyclical and almost perfectly negatively correlated with hours worked, placing household time allocation at the center of the mechanism. Robustness checks across the capital share, the shock persistence, and the utility specification show that only an empirically implausible labor-AI elasticity reverses the wage and fertility signs. A welfare analysis finds the AI shock welfare-improving under complementarity, whereas longevity produces a short-run welfare loss that recedes as capital deepening raises wages, since households initially compress consumption and fertility to finance a longer retirement. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.22037 |
| By: | Tiwari, Shubham; Goli, Srinivas; Skirbekk, Vegard |
| Keywords: | Health Inequality, Welfare Measurement, Anchor-Calibration, Concentration Index, Older Adults, Socioeconomic Gradients, India |
| JEL: | I14 I18 D31 C81 J14 C21 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:341701 |
| By: | Bence Bardóczy; Akshay Shanker; Mateo Velásquez-Giraldo |
| Abstract: | The sequence-space Jacobian (SSJ) method of Auclert et al. (2021a) has made heterogeneous-agent models far easier to solve, fueling an explosion of applications. But even SSJ strains against capacity constraints when state spaces grow very large, as in economies with overlapping generations of heterogeneous agents (HA-OLG). We show how to exploit the special properties of age—finite planning horizons and deterministic transitions between ages—to compute the Jacobians of a general class of HA-OLG models orders of magnitude faster. We provide rigorous proofs, age-specific Jacobians that decompose aggregate dynamics across cohorts, an application to the dynamic general-equilibrium effects of secularly declining birth rates, and an accessible cookbook for adopting our method. |
| Keywords: | life cycle; heterogeneous-agent models; sequence-space Jacobian; population aging; R-star |
| JEL: | C61 C63 D15 |
| Date: | 2026–06–24 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:103447 |
| By: | Lisa Dettling, Luke Pardue |
| Abstract: | Low fertility and population aging have shaped the U.S. federal government’s spending and revenue patterns, contributing in large part to the growing federal debt. This paper examines the role of these trends in shaping America’s current fiscal position and the potential for a reversal of these trends to relieve domestic fiscal pressures. The authors find that the dramatic rise in fertility rates during the Baby Boom has led to a marked rise in old-age entitlement spending, as this cohort entered retirement. Rising life expectancies have also been a significant driver of increased entitlement spending and will continue to place pressure on federal deficits and debt in the coming decades. This paper then evaluates how near-term fertility trends would affect the federal budget under a baseline scenario of continued low fertility and an alternative scenario in which the US returns to a replacement-level total fertility rate in 2026. Under both scenarios, deficits and debt are projected to remain on an unsustainable path through 2055, as changes in the fertility rate today would take multiple decades to meaningfully impact the size of the working-age population. In fact, the budget outlook is somewhat worse under the replacement fertility scenario, and demonstrably so if we factor in the costs of pronatalist policies that might be needed to achieve replacement fertility. In the outlook beyond 30 years, higher fertility would gradually improve the fiscal position. However, given the current unsustainable trajectory of the US federal debt, it is possible that changes in tax or spending policy would need to occur before the fiscal benefits of higher fertility rates could be realized. |
| Keywords: | public finance, demographics |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:cxx:wpaper:low-fertility-and-fiscal-sustainability-4 |