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on Economics of Ageing |
| By: | Agar Brugiavini; Ludovico Carrino; Gloria Moroni; Rinaldo Naci; Giacomo Pasini |
| Abstract: | This chapter examines the incidence and economic burden of cognitive impairment among older individuals in Italy within the long-term care (LTC) system. Using SHARE Wave 9 data (2022), cognitive impairment is measured through standardized memory and numeracy tests, classifying 8.6% of individuals aged 65+ as cognitively impaired. Cognitive decline rises sharply with age and is strongly associated with higher care needs, particularly intensive formal care. While both physically and cognitively impaired individuals rely heavily on informal care, cognitively impaired individuals receive substantially more hours of care. Total LTC costs amount to $35.3 billion (1.66% of GDP), with cognitively impaired individuals accounting for the largest share of expenditures. Informal care represents a greater financial burden than formal care across all groups. The findings highlight significant unmet care needs and underscore the urgent necessity of policy reforms and healthy ageing strategies to ensure LTC sustainability. |
| JEL: | D10 I13 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35441 |
| By: | Winikoff, Justin B.; Winkler, Richelle L.; Cromartie, John; Curtis, Katherine J. |
| Abstract: | Population and demographic change can create both challenges and opportunities for rural communities. This report studies migration and aging patterns across U.S. counties from 1980 to 2020 using detailed data on age-specific migration across the rural-urban continuum. As of 2020, nonmetropolitan counties were significantly older (35 percent over age 55) than metropolitan counties (29 percent over age 55) due to age-specific migration over the previous three decades that saw younger people moving towards more urban areas and older people towards rural places. Nonmetropolitan counties lost prime working age people (age 25–54) in the 2010s despite attracting them previously. Furthermore, fewer retirement-aged people moved to nonmetropolitan counties in the 2010s than in previous decades as part of a national trend of lower migration, despite the large number of Baby Boomers reaching retirement age that decade. Rural retirement and recreation destination typology counties experienced in-migration among people aged 30–79, while farming and manufacturing typology counties saw net out-migration at younger ages. Using a decomposition analysis, this report finds that population aging in the 2010s was driven almost entirely by aging in place, rather than migration like in previous decades. Counties to which older people moved tended to be correlated with better economic and health indicators (but higher housing costs) than those counties younger people moved away from or those that experienced significant aging in place. These insights help inform policymaker decisions related to rural prosperity. |
| Keywords: | Community/Rural/Urban Development, Consumer/Household Economics, Health Economics and Policy, Labor and Human Capital, Research Research Methods/Statistical Methods |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:ags:uersib:410263 |
| By: | Gaia Bagnasco; Pieter Bakx; Stijn Coremans; Bram Wouterse |
| Abstract: | We analyze the association between cognitive impairments and long-term care use in the 65+ population in the Netherlands. For this, we use data from the Lifelines Cohort Study that are linked to administrative records available through Statistics Netherlands. We find that, among those with cognitive impairments, long-term care use is concentrated in a subgroup: 42% of those with cognitive impairments do not use any long-term care. At the same time, individuals with cognitive impairments who use long-term care have high expenditures, in particular when living in nursing homes. Further analyses reveal that many individuals with cognitive impairments report functional limitations and that cognitive impairment is associated with long-term care use above and beyond these impairments. These findings highlight the importance of taking cognitive impairments into account when seeking to explain the determinants of long-term care use in research and when tailoring long-term care programs to the needs of the elderly when considering policy reforms. |
| JEL: | I10 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35538 |
| By: | Andreas Irmen (DEM, Université du Luxembourg); Yuanhua Xu (DEM, Université du Luxembourg); |
| Abstract: | "A sustained decline in hours worked per worker reduces pension benefits in a pay-as-you-go (PAYG) pension system while simultaneously weakening productivity growth through learning. We study these effects in an overlappinggenerations model with endogenous labor supply, where two-period-lived individuals have preferences proposed by Boppart and Krusell (2020). Production is subject to a learning externality: supplying more hours raises a worker’s productivity and generates knowledge spillovers to co-workers. The implied Marshallian labor supply is hump-shaped. Despite these nonlinearities, the model admits closed-form transitional dynamics and a unique, stable steady state. Along the balanced growth path, pension benefits grow more slowly than wages because higher wages induce workers to supply fewer hours. The resulting slowdown in learning further dampens both wage and pension growth. Ignoring the endogenous labor supply response substantially overestimates both pension growth and the rate of return of the PAYG system. Due to the learning externality and social discounting, the planner’s and the equilibrium allocations differ. A PAYG pension system financed by a proportional contribution rate applied to individual labor earnings cannot implement the planner’s allocation. By contrast, a PAYG system with lump-sum contributions and benefits combined with a wage subsidy for workers, can." |
| Keywords: | "Endogenous Labor Supply, Pay-As-You-Go Pensions, Learning, Endogenous Growth, Overlapping Generations." |
| JEL: | D15 H55 J22 O33 O41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:luc:wpaper:26-12 |
| By: | Costa-Font, Joan (London School of Economics); Jimenez-Martin, Sergi (Universitat Pompeu Fabra); Vilaplana, Cristina (University of Murcia) |
| Abstract: | We estimate the health and wellbeing effects of subsidized access to long-term care (LTC). Our analysis exploits the staggered implementation of Spain’s 2007 System of Autonomy and Care for Dependent People (SAAD), which expanded publicly funded and universal LTC subsidies and supports, as well as its subsequent reform. Using two decades worth of administrative and survey data and leveraging exogenous regional and individual-level variation in program exposure, we find that access to SAAD benefits reduces the care receiver’s depressive symptoms by about 1 percentage point, increases its survival probability by 2.6–3 percentage points, and raises its life satisfaction by 0.24–0.50 scale points. Cost-effectiveness estimates indicate that the implied cost per quality-adjusted life year (QALY) gained lies below commonly accepted efficiency thresholds for public health spending in Europe. These findings document sizeable health returns and efficiency gains from publicly subsidized LTC provision |
| Keywords: | long-term care subsidies, long-term care supports, old age care, Spain, mortality, cost per QALY, survival, mental health, life satisfaction |
| JEL: | I18 J14 J16 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18890 |
| By: | Hyeran Chung; Haena Lee; Sita Slavov |
| Abstract: | Health shocks are a major driver of retirement. However, the existing literature on this topic tends not to consider the marital context in which retirements occur. Using the 1992-2022 Health and Retirement Study and staggered difference-in-differences methods, we investigate how spousal health shocks impact retirement transitions. We also investigate whether these effects differ by gender and health insurance status. We consider multiple definitions of health shocks, including self-reported health declines, additional diagnoses, hospitalizations, increases in out-of-pocket medical spending, and functional deterioration. Our results suggest that the probability of retirement increases by 1.2 to 1.3 percentage points (12 to 13 percent) after a spouse’s new health condition diagnosis or hospitalization. These retirements tend to occur earlier than anticipated. They also tend to be concentrated among women and respondents with employment-based health plans that include retiree coverage for their spouse. |
| JEL: | D13 D15 I10 J14 J26 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35477 |
| By: | Yueman Fen; Wenyuan Li; Mengyi Xu; Pengyu Wei |
| Abstract: | This paper studies the investment and insurance strategies of defined-contribution (DC) pension plans under the mean-variance framework. We consider a stochastic environment with time-varying interest rates, contributions, and mortality risk. The DC plan members are allowed to decide their bond and stock allocations, as well as their life insurance coverage. Adopting the martingale approach, we derive the closed-form optimal strategies and the mean-variance efficient frontier. Further numerical analysis investigates how mortality improvements affect investment and insurance decisions, as well as the sensitivity of the optimal decision to market parameters. Our analysis suggests that longevity raises expectations of future contributions, allowing pension members to adopt a less risky investment strategy. Meanwhile, insurance strategy shifts toward early adulthood to protect the high value of future income and decreases significantly at later ages. Moreover, we conduct sensitivity analyses on the target expected wealth, market price of risk, and contribution growth. These findings provide practical guidance for pension members on investment and offer insights for the design of DC pension plans. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.04532 |
| By: | Matthias Rodemeier (Bocconi University); Jared Gars (University of Florida); Justin Holz (University of Michigan); Egon Tripodi (Hertie School); Juan Miguel Villa (Inter-American Development Bank) |
| Abstract: | Governments increasingly encourage socially desirable behavior with probabilistic incentives. We study such “Pigouvian lotteries” in a retirement-savings field experiment with 387, 000 workers in Colombia’s public pension system. The lotteries induce sharp bunching at qualification thresholds, but workers mostly meet them by retiming rather than increasing deposits, leaving overall savings largely unaffected. Lotteries further crowd out valuable life and disability insurance and disproportionately reward wealthier savers. A welfare analysis shows that, once we account for these unintended consequences, lotteries reduce welfare. Our findings illustrate that behavioral spillovers across time and choice domains can reverse the verdict on behavioral public policies. |
| Keywords: | retirement savings; prize-linked savings; paternalism; informality; household finance; |
| JEL: | D14 D91 H55 C93 G52 |
| Date: | 2026–09–09 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:582 |
| By: | Ding Ding; Xiang Fang; Bryan Hardy; Karen K. Lewis |
| Abstract: | The pension sector is an important investor group in global financial markets and a key holder of government and corporate debt. This article examines the evolution of pension fund asset allocations around the globe and documents two important structural changes. First, pension investors have shifted portfolio share allocations away from fixed income securities. This trend is robust across Defined Contribution (DC) and Defined Benefit (DB) programs as well as country groups. Second, pensions have instead shifted allocations into riskier investments within mutual funds as well as alternative investments. We hypothesize that a global decline in interest rates is one potential driver of this change. Using a global sample, we show that declining local currency government bond yields are associated with lower bond pension portfolio shares and higher holdings shares of mutual funds and foreign assets. We discuss the potential implications of these trends for borrowing costs. The declining holding share of pensions as a long-term investor group implies financing costs are less sensitive to new debt issues, but more sensitive to global uncertainty. |
| JEL: | F34 G11 G15 G23 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35507 |
| By: | Petri Böckerman; Ohto Kanninen; Sami Jysmä |
| Abstract: | This pre-analysis plan outlines the research design for estimating the causal effects of the Finnish guarantee pension—a minimum income floor for pension recipients—on mortality, morbidity, and prescription drug use. The 2011 reform generated a discrete change in the slope of the benefit schedule for low-income pensioners, creating a plausibly exogenous source of variation. We exploit this reform using a Difference-in-Kinks (DiK) estimator that compares changes in outcome gradients around the policy kink before and after the reform. The analysis is conducted using comprehensive Finnish administrative data from population registers, hospital records, prescription drug reimbursement databases, and pension and tax registers. Primary outcomes include all-cause mortality, inpatient hospital days, and annual prescription drug co-payments. Secondary analyses focus on alcohol-related mortality and mental-health-related medication use. We further examine the potential heterogeneity of the effects by gender. The PAP pre-specifies the hypotheses, outcome definitions, sample restrictions, identification assumptions, and estimation equations. All analyses will be implemented without additional controls, and all deviations from the pre-analysis plan will be transparently documented in the final study. |
| Keywords: | Guarantee pension, Difference-in-Kinks (DiK), Mortality, Morbidity |
| JEL: | I18 I38 H55 J14 C21 |
| Date: | 2025–12–03 |
| URL: | https://d.repec.org/n?u=RePEc:pst:wpaper:357 |
| By: | Ahmed Ación López; Carlos Vidal-Meliá |
| Abstract: | Spain’s delayed-retirement rules allow eligible workers to choose between a permanent pension supplement, a statutory lump sum, or a mixed option. This paper evaluates whether exchanging the life-contingent supplement for the lump sum is actuarially neutral and examines how behavioral and institutional channels affect the financial comparison. The analysis combines income-stratified mortality, a simulation grid of 280 institutionaldemographic profiles, and population weights derived from the 2024 Continuous Sample of Working Lives (MCVL). Under dynamic segmented mortality, the baseline MCVLweighted ratio of the lump sum to the actuarial present value of the foregone supplement is 0.512, and none of the simulated profiles reaches actuarial neutrality. The shortfall is larger for women and higher-pension profiles because the lump-sum formula is concave in pension entitlement and does not incorporate longevity differences. Tax treatment, policy risk, and present-oriented discounting can make commutation financially defensible for some profiles. In the most favorable combined scenario, profiles reaching financial indifference represent 39.38% of the MCVL-weighted population and contain 8.0 percentage points of the observed 24.02% lump-or-mixed take-up rate. Under the central CRRA specification, the MCVL-weighted certainty-equivalent gap is 3.0%, although this welfare result is conditional on the maintained assumptions. The findings support clearer actuarial information and a review of the statutory formula, while distinguishing formula non-neutrality from the rationality of individual choices. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:fda:fdaeee:eee2026-25 |
| By: | Hamid Noghanibehambari; Jason Fletcher |
| Abstract: | Many previous studies have used cross-cohort comparisons and a focus on in utero exposure to document the lingering effects of the 1918 influenza pandemic on survivors’ outcomes later in life. A subset has examined impacts on old-age health and mortality, finding mixed results. This paper contributes to the literature by extending the analysis to evaluate early-life and childhood exposure to the pandemic on old-age longevity along with a set of candidate mechanisms. We employ Social Security Administration death records linked to the full-count 1940 census and employ event-study and difference-in-difference regressions to compare longevity of cohorts with different age-at-exposure who were born in cities with high versus low exposure based on 1918 influenza-related mortality. Our treatment-on-treated calculations suggest that cohorts with age-at-exposure of 3-8 and 9-11 experience 6.4 and 11.2 months reductions in old age longevity; importantly, we note that these cohorts are often used as “controls” in the broader literature. While our main analysis focuses on males due to data constraints, supplementary results suggest smaller and less precise effects for females. An analysis of census data suggests reductions in health, education and socioeconomic scores as potential mechanisms. |
| JEL: | I1 J10 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35471 |
| By: | Dan Black; Anna Malinovskaya; Seth Sanders |
| Abstract: | In this project we attempted to model the tax induced migration of older Americans. We did this by linking the ACS to the MARF file to study the timing of migration. We show that the MARF file can successfully follow people across time and space and create population statistics on migration by characteristics observed in the ACS. Two issues make this strategy of limited use for studying tax incentivized migration. First, while the MARF allows longitudinal analysis of migration, the cross-sectional nature of the ACS does not allow us to observe the antecedents especially retirement. Second, the asset measures available in the ACS are poor proxies of wealth and make it difficult to conduct a designed based analysis when classifying individuals by their tax incentive to move is important. We suggest that more detailed asset data is needed to accomplish this goal. We also attempted to study migration of older individuals by linking individuals age 56-61 observed in Census 2000 to their records in Census 2010 and documented their 10-year migration patterns by wealth (proxied by housing wealth) and the tax rate of their origin and destination states. In this report, we present our findings on the 10-year migration patterns of these older individuals originating from California, New York, and Illinois. |
| Keywords: | ACS, MARF, Decennial Census 2000 and 2010 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:cen:tnotes:26-34 |
| By: | Lane, Edward |
| Abstract: | Proposals to privatize Social Security through personal investment accounts rest on the assumption that equity markets will deliver real returns of 6 to 7 percent, exceeding what the current program can pay. This paper examines that claim from actuarial, financial, and fiscal perspectives and finds it fails in each. Actuarially, Social Security is not an investment account but a package of inflation-indexed insurance benefits, retirement, disability, survivor, and family coverage, delivered through a progressive formula; no private portfolio replicates this package at comparable cost. Financially, the paper applies the inelastic markets hypothesis (Gabaix and Koijen, 2021), which holds that a dollar of net equity inflow raises total market capitalization by roughly five dollars, to a 2005-style carve-out diverting approximately $330 billion annually into automatic, price-insensitive equity purchases. Under this framework, valuations rise approximately 28 percent above baseline within a decade, compressing forward returns by nearly one percentage point annually and generating roughly $15 trillion in capital gains accruing predominantly to the top decile of households. Crucially, the classical framework of Diamond and Geanakoplos (2003), in which bond issuance offsets equity flows and prices barely move, reaches the same policy verdict by a different route: the equity risk premium shrinks as risk spreads across the workforce, eliminating the excess return the proposal requires. Both models therefore undermine the projected returns, and neither changes the real economics of retirement, which is funded by future production, not financial claims. Fiscal analysis in the functional finance and Modern Monetary Theory traditions confirms that personal accounts financed by government borrowing create no new national saving. The paper concludes that if broader asset ownership is the goal, the appropriate instrument is a voluntary, low-cost add-on savings vehicle layered atop an intact Social Security system, not a carve-out of the payroll tax. In preparing this paper, the author used an AI assistant (Anthropic's Claude and Perplexity, powered by GPT-5.1) for drafting, editing, and formatting support. All analysis, arguments, and conclusions are the author's own, and all references and figures were verified against primary sources. |
| Keywords: | Social Security, Privatization, Personal Accounts, Inelastic Market Hypothesis, Equity Risk Premium, Asset Pricing, Wealth Distribution, Supeannuaation, Functional Finance, Modern Monetary Theory, Modern Money Theory |
| JEL: | H5 H51 H53 H55 I38 |
| Date: | 2026–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:130383 |
| By: | LANE, Edward |
| Abstract: | America's demographic challenge is not simply that the population is aging or that population growth is slowing. It is that the nation's principal economic, political, and social institutions were built during eight decades of sustained demographic expansion and continue to operate under assumptions of growing workforces, expanding tax bases, rising student enrollments, and robust family support networks. This paper argues that the central issue through 2050 is therefore one of institutional adaptation rather than demographic change alone. The paper develops an integrated analytical framework that examines how demographic deceleration propagates through federal entitlement programs, labor markets, education, political representation, state and local government finance, housing, healthcare, and household caregiving. It introduces the concept of a K-shaped nation to explain why similar demographic pressures produce increasingly unequal outcomes across regions and communities. Communities with strong fiscal resources, diversified economies, and resilient institutions are generally better positioned to adapt, while those with weaker institutional capacity face self-reinforcing cycles of population loss, labor shortages, service contraction, and fiscal stress. A central finding is that the burden of demographic adjustment progressively shifts downward through American society. Federal fiscal pressures become state budget challenges. State constraints become municipal service reductions. Municipal limitations increasingly become household responsibilities. At each stage, the institution receiving the burden typically possesses fewer financial, institutional, and human resources than the institution passing it along. The paper distinguishes between financial constraints and real resource constraints. While fiscal policy can redistribute claims on future output, it cannot by itself create caregivers, healthcare capacity, housing, or functioning local institutions. Immigration can expand the working-age population within a relatively short period, whereas fertility policies require decades to affect labor supply. Artificial intelligence may increase productivity in many sectors but is unlikely to eliminate shortages in occupations requiring sustained physical presence, including caregiving, nursing, construction, and other essential services. The paper concludes that America's demographic future is unusually predictable because the cohorts that will shape the next two decades have largely already been born. The principal policy challenge is therefore not forecasting demographic change, but adapting institutions built for an era of continuous growth to one of demographic deceleration and, in many places, demographic contraction. Whether demographic change becomes a manageable transition or an increasingly unequal redistribution of economic and social burdens will depend largely on the nation's capacity for institutional adaptation. |
| Keywords: | Demographic Change; Population Aging; Institutional Adaptation; K-Shaped Nation; Institutional Capacity; Social Security; Medicare; Medicaid; Long-Term Care; Labor Force; Immigration; Artificial Intelligence; State and Local Government Finance; Regional Divergence |
| JEL: | E2 E24 E6 E62 E66 J0 J00 J1 J10 J11 J13 J18 J21 J23 J24 J48 |
| Date: | 2026–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:130381 |
| By: | Harrington, Rosamund; Lindquist, Marissa; Darzins, Susan; Trotter, Mark; Drogemuller, Robin; Olsen, Heidi; Pepping, Gert-Jan (Australian Catholic University); Kuys, Suzanne |
| Abstract: | Abstract Background and Objectives: Intergenerational farming activities, including care of plants, animals, and surrounding environments, enable connection with nature and participating generations. This systematic review aimed to determine health and wellbeing impacts of intergenerational farming activities for older adults, children/youth and community; key factors contributing to establishment, engagement in, and sustainability of intergenerational farming programs: and whether they support ‘ageing-in-place'. Research Design and Methods: A systematic search was undertaken of five databases. Studies could be qualitative and/or quantitative, involve an intergenerational activity/program inclusive of older adults and children/youth, report health and wellbeing outcomes and be written in English. Adopting a social ecological lens, qualitative data were synthesised and reported thematically. Quantitative data were descriptively presented. Results: Twenty-two studies were included. Seven themes relating to health and wellbeing impacts were identified: physical health benefits, psychological benefits, positive relationships and interpersonal skills, community and belonging, purposeful work or learning, environmental engagement, and connection to culture. Factors impacting establishment, engagement in, and sustainability of activities included planning and implementation considerations, partnerships, agency and anticipated future opportunities/benefits. No studies reported if, or how, intergenerational farming activities support ‘ageing-in-place’. Discussion and Implications: Intergenerational farming activities appear to offer holistic health and wellbeing benefits, reflecting Indigenous approaches to healing through connections to land, culture, and community. Establishing sustainable programs requires planning, training and partnerships. More robust research utilising objective measures is required to support findings. Further investigation is needed. Furthermore, studies investigating how intergenerational farming supports ‘ageing-in-place’ is recommended. |
| Date: | 2026–08–25 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:2ubky_v1 |