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on Economics of Ageing |
| By: | Andersen, Torben M; Bhattacharya, Joydeep; Wang, Min |
| Abstract: | In most economies, pension benefits are shielded from garnishment in the event of loan default. This paper argues that without such protection, pension programs fail to meet their primary goal of securing adequate retirement living standards. We examine an incomplete-markets, dynamically efficient economy where young borrowers face endogenous borrowing limits due to an inability to commit to repayment in middle age. By incorporating varying degrees of bankruptcy exemptions---specifically the protection of pension benefits---we demonstrate that pension policies effectively increase retirement consumption only when pension benefits receive some level of protection. In contrast, under exogenously set borrowing constraints, such policies enhance retirement living standards only when borrowing is restricted entirely. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19779 |
| By: | Schüler, Ruth M.; Seele, Stefanie |
| Abstract: | Die alternde Bevölkerung in Deutschland erhöht den Druck auf die sozialen Sicherungssysteme und verschärft (künftig) den Fachkräftemangel. Um die Lebensarbeitszeit zu verlängern, wurden in den letzten Jahren finanzielle Anreize geschaffen, insbesondere durch die Abschaffung der Hinzuverdienstgrenze für vorgezogene Renten und seit 2026 durch steuerliche Vorteile für Erwerbstätigkeit über die Regelaltersgrenze hinaus im Rahmen der "Aktivrente". Historisch war der Hinzuverdienst parallel zum vorzeitigen Rentenbezug stark begrenzt, und zwar auf 6.300 Euro jährlich bis zur Heraufsetzung der Hinzuverdienstgrenze im Jahr 2020. Dies führte dazu, dass viele Rentnerinnen und Rentner, die vorzeitig in Rente gegangen waren, bis zum Jahr 2020 eine geringfügige Beschäftigung wählten. Nach zweimaliger Heraufsetzung der Hinzuverdienstgrenze in den Jahren 2020 und 2021 wurde die Hinzuverdienstgrenze zum Jahresbeginn 2023 vollständig abgeschafft. Seitdem können vorzeitige Altersrentnerinnen und -rentner unbegrenzt hinzuverdienen, ohne dass der Hinzuverdienst mit der Rente verrechnet wird. Durch die Reformen der Hinzuverdienstgrenze ist das bisherige Prinzip, dass Rente Erwerbseinkommen ersetzt, aufgehoben, da nun ein paralleler Bezug von unbegrenztem Einkommen und voller Rente möglich ist. Seit dem vollständigen Wegfall der Hinzuverdienstgrenze 2023 nimmt die Zahl der vorzeitig Verrenteten mit einem sogenannten "großen Hinzuverdienst", der über die ehemals geltende Hinzuverdienstgrenze hinausgeht, zu. Gleichzeitig hat sich konjunkturell bedingt der Arbeitsmarkt seit 2023 eingetrübt, was auch die Beschäftigungschancen Älterer und im Besonderen die Chancen von Rentnerinnen und Rentnern, die bereits Einkommen in Form einer Rente beziehen, verschlechtern könnte. Eine Auswertung von Daten der Deutschen Rentenversicherung in der Vollerhebung für die Jahre 2018 bis 2024 zeigt, dass der Anteil der vorzeitigen Rentner mit großem Hinzuverdienst auch 2024 trotz Eintrübung des Arbeitsmarktes weiter steigt. Zwar schwächt sich die Dynamik im Vergleich zum Anstieg zwischen 2022 und 2023 ab. Trotzdem ist der Anstieg bei den vorzeitigen Rentnern weiterhin stärker als bei den Regelaltersrentnern. Wegen der Nachmeldungen von Beschäftigung ist davon auszugehen, dass die am aktuellen Rand für 2024 ausgewiesenen Werte noch untererfasst sind. Langjährig Versicherte und Altersrentnerinnen und -rentner, welche aufgrund einer Schwerbehinderung vorzeitig eine Altersrente beziehen, gehen seit dem Wegfall der Hinzuverdienstgrenze im Durchschnitt früher in Rente. Zudem erzielen sie mittlerweile vergleichbare Entgelte wie die Personen, die zum gesetzlichen Renteneintrittsalter in Rente gegangen sind. Das unterminiert das mit der Anhebung der Regelaltersgrenze verbundene Ziel, den Rentenbezug ins Alter zu verschieben. Zudem entscheidet sich seit 2020 ein höherer Anteil an Personen für einen vorzeitigen Renteneintritt mit Abschlägen. Unter der Prämisse, dass der Vorruhestand nicht ohne Zusatzlasten organisiert werden kann (Pimpertz, 2023), erhöht der Wegfall der Hinzuverdienstgrenze die Belastung der Gesetzlichen Rentenversicherung ausgabenseitig. |
| Abstract: | The ageing population in Germany is increasing pressure on the social insurance systems and will (in the future) exacerbate the shortage of skilled labour. To extend working lives, financial incentives have been created in recent years, in particular through the abolition of earnings limits for early retirees and, since 2026, through tax advantages for employment beyond the statutory retirement age under the so-called "active pension" (Aktivrente). Historically, additional earnings alongside early retirement were strictly limited, to €6, 300 per year until the earnings limit was raised in 2020. As a result, many retirees who took early retirement opted for marginal employment up to 2020. After the earnings limit was increased twice in 2020 and again in 2021, it was completely abolished at the beginning of 2023. Since then, early retirees have been able to earn unlimited additional income without it being offset against their pension. As a result of these reforms, the previous principle that pensions replace earned income has effectively been abolished, since it is now possible to receive both unlimited income and a full pension simultaneously. Since the complete removal of the earnings limit in 2023, the number of early retirees with so-called "high additional earnings, " i.e. earnings exceeding the former limit, has increased. At the same time, however, the labour market has deteriorated since 2023 due to cyclical factors, which may also reduce employment opportunities for older workers, particularly for retirees who already receive pension income. An analysis of German Pension Insurance full-sample data for the years 2018 to 2024 shows that the share of early retirees with high additional earnings continued to rise in 2024 despite the deterioration in the labour market. Although the pace of growth has slowed compared with the increase between 2022 and 2023, it remains stronger among early retirees than among retirees at the statutory retirement age. Due to delayed employment reporting, it can be assumed that the figures reported for 2024 are still somewhat underestimated. Persons with long contribution histories and retirees with severe disabilities have, on average, been retiring earlier since the abolition of the earnings limit. Moreover, they now earn income comparable to those who retired at the statutory retirement age. This undermines the objective associated with raising the statutory retirement age, namely increasing the effective working life. In addition, since 2020 a higher proportion of individuals has opted for early retirement with benefit reductions. Early retirement thus increases expenditure pressure on the statutory pension insurance system. |
| JEL: | H55 J14 J26 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwkrep:342425 |
| By: | Sergi Jiménez-Martín |
| Abstract: | We estimate causal effects of the 2011 Spanish pension reform—which raised the normal retirement age (NRA) from 65 to 67, conditioning access on accumulated contribution years—on retirement timing, exit route, and premature mortality. Using data from the Muestra Continua de Vidas Laborales we find that the reform delayed retirement by about eight months on average for fully treated individuals belonging to the 1948-1957 cohorts, the cohorts observable in our data. Because the reform phases in gradually until the 1962 cohort—the first to face the fully phased-in rules, which then apply unchanged to all later cohorts—the total effect will be larger as more intensely affected cohorts complete their working lives. The dominant response is a reallocation away from retirement at and before age 65 toward retirement after 65, and is markedly larger for women, who are less likely to meet the long-career exemption. The reform raises premature mortality, significantly so for men; the implied gender differential widens the male mortality excess and narrows the female survival advantage, though sample-weighted gaps are sensitive to the large share of male controls. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:fda:fdaeee:eee2026-23 |
| By: | Curi, Claudia (Free University of Bozen/Bolzano); Dibiasi, Andreas (Free University of Bozen/Bolzano); Nicolini, Francesco (Free University of Bozen/Bolzano); Ploner, Matteo (University of Trento); Tonin, Mirco (Free University of Bozen/Bolzano) |
| Abstract: | Using original survey data from working-age individuals in Northern Italy, we study longevity beliefs and other key knowledge components relevant for retirement decisions. We find substantial dispersion in population longevity beliefs, with 40% of individuals misestimating life expectancy by more than five years, and highly fragmented knowledge across domains. Providing actuarial life expectancy information -- tailored by age, gender, and county of residence -- does not affect beliefs about individuals’ own longevity or retirement plans, reflecting a disconnect between beliefs about one’s own longevity and that of others. We compare our results with forecasts provided by 262 academic experts. On average, experts accurately anticipate the levels and correlations of longevity literacy with other knowledge components, but they mispredict a strong updating response of own longevity expectations to the provision of population information that deviates markedly from what we observe in the data. |
| Keywords: | subjective longevity, expert forecasts, financial literacy, retirement |
| JEL: | D83 J26 D15 G50 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18863 |
| By: | Astrid Krenz; Holger Strulik |
| Abstract: | Healthy life expectancy is conventionally computed by combining life-table mortality with independently observed health information. This paper proposes an alternative approach that computes healthy life expectancy from mortality schedules alone. Building on the empirical regularities that adult mortality follows Gompertz's law and that mortality is related to the frailty index by a power law, we introduce Mortality-Implied Continuous Health-Equivalent Life Expectancy (MICHELE). The framework is validated using the Health and Retirement Study, where MICHELE closely reproduces directly observed Continuous Health-Equivalent Life Expectancy, and using Healthy Life Expectancy from the Global Burden of Disease Study, where mortality-implied health weights explain almost all age-related variation in disability-based health weights. The results suggest that mortality schedules contain substantially more information about the biological aging process underlying healthy longevity than has generally been recognized and provide a simple approach for estimating healthy life expectancy when comparable health data are unavailable. |
| Keywords: | healthy life expectancy, health data, frailty index, Gompertz law, mortality, biological aging |
| JEL: | I10 I12 J10 J11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12868 |
| By: | Xue, Xindong (Zhongnan University of Economics and Law); Ye, Chunchen (Hubei Academy of Healthcare Security Reform and Development); Rocco, Lorenzo (University of Padova) |
| Abstract: | We study the effect of retirement on social capital in urban China. Using three waves of the China Family Panel Studies (2018–2022) and a fuzzy regression discontinuity design based on China’s statutory retirement ages, we document that retirement does not raise or lower social capital uniformly but reallocates it. Retirement causes bridging social capital to fall and bonding social capital to rise. The reallocation is concentrated among men, whose pre-retirement networks are more heavily workplace-centered. As governments around the world postpone statutory retirement ages in response to population ageing, our estimates imply that pension reforms carry social externalities of opposing sign that fiscal accounting omits. |
| Keywords: | retirement, social capital, fuzzy regression discontinuity, bridging and bonding social capital |
| JEL: | J26 Z13 I31 D91 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18822 |
| By: | Qian, Yuting (Yale University); Gavulic, Kyle (Yale University); Chen, Xi (Yale University) |
| Abstract: | A documented diagnosis only benefits patients who know about it. Using nationally representative Health and Retirement Study data linked to Medicare claims (1998–2020), we quantify the gap between clinically documented dementia diagnoses and patients' own reports. Among self-respondents with probable dementia and a claims-based diagnosis, 67 percent do not report having been diagnosed—more than double the average underreporting rate for arthritis, hypertension, diabetes, and depression among the same population—and underreporting is highest in the early disease stage, precisely when decision-making capacity is greatest. Underreporting is more prevalent among individuals who live alone, are dually eligible, have less education, and are non-Hispanic Black, and less prevalent among Medicare Advantage enrollees and patients seen by dementia specialists, consistent with roles for stigma, social vulnerability, and provider disclosure incentives. Underreporting predicts lower post-diagnosis care engagement and a lower likelihood of establishing a will or trust, suggesting information frictions undermine the returns to early detection. |
| Keywords: | dementia, underreporting, diagnostic disclosure, Medicare, aging, cognitive decline, end-of-life planning |
| JEL: | I11 I12 I14 J14 D83 I18 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18819 |
| By: | Foltyn, Richard; Olsson, Jonna |
| Abstract: | Using biennial data from the Health and Retirement Study, we estimate age-dependent health dynamics and survival probabilities at annual frequency conditional on race, sex, self-reported health and other covariates. The estimates can be used to calculate heterogeneous life expectancies in the population. We show that the racial life expectancy gap remains large, even conditional on health, socioeconomic and marital status. Due to racial differences in health dynamics and mortality, married black men on average can expect to receive $6, 400 (or 8%) less in Social Security benefits in present value terms. Using a rich life cycle model, we estimate that this corresponds to a welfare loss of about 4%, whereas black married women’s welfare loss is primarily driven not by their own shorter life expectancy but the shorter life expectancy of their husbands. |
| JEL: | C23 E21 I14 J14 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19654 |
| By: | Kotschy, Rainer; Bloom, David; Scott, Andrew |
| Abstract: | Analysis of population aging is typically framed in terms of chronological age. However, chronological age itself is not necessarily deeply informative about the aging process. This paper reviews literature and conducts empirical analyses aimed at investigating whether chronological age is a reliable proxy for physiological functioning when used in models of economic behavior and outcomes. We show that chronological age is an unreliable proxy for physiological functioning due to appreciable differences in how aging unfolds across people, health domains, and over time. We further demonstrate that chronological age either fails to predict economic variables when used in lieu of physiological functioning, or that it predicts additional effects on economic behavior and outcomes that are largely unrelated to physiological aging. Continued reliance on chronological age as a proxy for physiological functioning might impede the ability of societies to fully harness the benefits of increasing longevity. |
| Keywords: | Population aging; Longevity |
| JEL: | I10 I30 J10 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19655 |
| By: | R. Anton Braun; Karen A. Kopecky |
| Abstract: | Long-term care is costly. About 45 percent of 65-year-old Americans will require formal long-term care assistance during their lifetime and one in twelve will incur out-of-pocket expenses of $200, 000 or more. Surprisingly, only 10 percent of retirees have private long-term care insurance. We use a quantitative structural model to show that an obstacle to increasing coverage is disagreement across the income distribution: scaling back Medicaid expands the private market and benefits the affluent but imposes large welfare losses on the poor, while universal public insurance does the opposite. We then show that making Medicaid the primary rather than the secondary payer of longterm care costs, while retaining its means tests, raises welfare for nearly all Americans. Private insurers respond by offering smaller, more profitable policies, and total coverage against long-term care risk rises with only a modest increase in public expenditures. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:cnn:wpaper:26-012e |
| By: | Costa-Font, Joan; Wang, Wanying |
| Abstract: | Although flexible employment policies can help employed individuals balance caregiving and paid work, limited evidence has been devoted to examining the effect of working flexibly on the supply of care to older adults. In this paper, we study the impact of flexible working conditions on the supply of informal adult care and mental health. We exploit variation from the 2014 expansion of the Right to Request Flexible Work (RRFW) to employees in the UK. Our findings point to a gendered response to increased employment flexibility. We document a 1.3-percentage-point increase in the likelihood that men provide informal care within the household, alongside less regular daytime work, greater control over working hours, and higher engagement in home production. In contrast, among potential female caregivers, we find that the reform reduced the probability of high-intensity caregiving, which is typically incompatible with employment or related activities. We document that the increased workplace flexibility not only encourages caregiving but also helps reduce gender disparities in unpaid care. We additionally find suggestive evidence of improved mental health outcomes, particularly among men. |
| Keywords: | flexible working;informal care;right to request flexible work;mental health;United Kingdom |
| JEL: | J14 J22 |
| Date: | 2026–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:140228 |
| By: | Hansson, Åsa (The Ratio Institute); Lundberg, Kristoffer (The Ratio Institute) |
| Abstract: | Declining fertility is reshaping the demographic outlook of advanced economies, yet its long-run macroeconomic consequences remain poorly understood. Using a dynamic microsimulation model calibrated to the Swedish economy, this paper examines how alternative fertility and migration scenarios affect population dynamics, dependency ratios, GDP, GDP per capita, and economic growth between 2025 and 2100. We find that lower fertility initially raises GDP per capita through a temporary demographic dividend, but these gains are eventually offset by population ageing, a shrinking labor force, and slower economic growth. Under current fertility rates, GDP in 2100 is projected to be around 13 percent lower than under a stable demographic scenario, while lower fertility combined with lower migration reduces GDP to less than half that level. The findings highlight the importance of demographic structure for long-run economic prosperity and sustainable public finances. |
| Keywords: | Fertility; demographic change; economic growth; welfare state; microsimulation |
| JEL: | E24 H55 J11 |
| Date: | 2026–08–10 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ratioi:0391 |
| By: | Haibo Li; Estelle X Liu; Yinqiu Lu; Anne Oeking |
| Abstract: | This paper explores how demographic shifts, particularly population aging, are reshaping banking in Asia-Pacific’s bank-dominated financial systems. Using household surveys as well as bank-level and country-level panel data, we show that aging populations are associated, with shifts in bank portfolios away from traditional loans (with lower loan-to-deposit and loan-to-asset ratios), driven by changes in households’ financial behavior. These changes affect banks’ funding structures, profitability, and risk profiles, with implications for financial stability. We also provide new evidence on cross-border dynamics, showing that demographic divergence spurs asset reallocation toward younger economies. Our findings highlight evolving risks and supervisory challenges as demographic transitions unfold unevenly across economies. |
| Keywords: | Population aging; demographic change; bank balance sheets; household financial behavior; cross-border asset allocation |
| Date: | 2026–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/150 |
| By: | Bairoliya, Neha; Gallipoli, Giovanni; McKiernan, Kathleen |
| Abstract: | Late-life uncertainty and end-of-life (EOL) motives drive demand for death-contingent liquidity, affecting saving, insurance, and labor decisions. Using data on wills, life insurance, and bequest intentions, we document EOL motives across households. Our life-cycle model incorporates precautionary, survivor, and warm-glow motives, exploiting differences between liquid wealth and life insurance to identify preferences. We analyze how these motives interact with Social Security's illiquid annuity and evaluate reforms, including replacing annuity benefits with guaranteed death-contingent payouts or expanding actuarially fair access to life insurance. Both reforms enable portfolio de-risking by shifting resources toward guaranteed EOL liquidity, generating substantial welfare gains for single, low-wealth individuals. |
| JEL: | D31 G11 G51 G52 J26 E21 H55 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19739 |
| By: | Tiwari, Shubham; Goli, Srinivas; Skirbekk, Vegard |
| Abstract: | This paper investigates whether survey measurement error in welfare rankings conceals the true extent of socioeconomic health inequality among older adults in India, using nationally representative LASI Wave 1 data. We develop an anchor-calibrated composite economic ranking that corrects systematic underreporting in self-reported income and gross asset values using consumption and a PCA wealth index as stable anchors. Probit models, doubly robust IPWRA estimators, and Erreygers-corrected concentration indices are estimated across five health outcomes and seven welfare specifications. Raw income produces null or directionally misleading gradient estimates for most outcomes, including a sign reversal in the income–self-rated health association. Anchor calibration consistently recovers larger and more plausible gradients, with concentration index amplification ranging from 12% to 46% across outcomes, while for multimorbidity, raw income entirely masks a statistically significant pro-rich gradient. Decomposition analysis reveals that education is the dominant driver of functional and subjective health inequality, whereas direct SES is the dominant driver of nutritional inequality. Results survive robustness checks across alternative anchor weights, thresholds, and estimators and imply that inequality-monitoring systems based on raw income systematically understate health disparities among older Indians. |
| Keywords: | Health Inequality, Welfare Measurement, Anchor-Calibration, Concentration Index, Older Adults, LASI, Socioeconomic Gradients, India |
| JEL: | I14 I18 D31 C81 J14 C21 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:342195 |
| By: | Ursula Berresheim; Marina Hoch |
| Abstract: | The United States faces record-low fertility rates amid persistently high housing costs and a con strained housing supply. One factor may be the limited downsizing of empty-nesters and retirees, which concentrates housing among elderly cohorts and restricts access for young families during their prime childbearing years. This paper investigates the link between low fertility and the high elderly housing concentration. In the U.S. context, we document a strong association between low fertility and both high elderly housing concentration and low housing supply elasticity. To quantify the underlying mechanisms, we develop a general equilibrium overlapping generations model with endogenous fertility and housing. In the model, two channels dominate: liquidity constraints among young households, which prevent them from accessing housing large enough to comfortably raise children, and habit formation amongoldercohorts, whichdiscouragesdownsizingandfosterselderly housing concentration. We conduct counterfactual policy analysis aimed at raising fertility through a reduced elderly housing concentration. An increase in property taxation reduces elderly housing concentration, but depresses fertility and welfare. Liquidity-focused interventions are more effective: a targeted transfer to young parents simultaneously raises fertility, reduces concentration, and gener ates large welfare gains. Yet, the cohort-specific welfare decomposition shows that these gains come partly at the expense of older cohorts. |
| Keywords: | Fertility, Housing Markets, Housing Wealth Concentration, Demographic Change, Housing Affordability, Taxation |
| JEL: | J13 R31 E21 R21 J11 R38 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_771 |