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on Economics of Ageing |
| By: | Bandoni Emil (Central Bank of Ireland and University College Dublin); Fugazza Carolina (University of Turin and CeRP-CCA) |
| Abstract: | A well-documented pattern in US household portfolio data is that the conditional risky share remains broadly stable throughout retirement. We ask whether rare but catastrophic health-expenditure shocks in retirement are sufficient to account for this pattern. We develop a parsimonious life-cycle portfolio-choice model in which rare health disasters, calibrated from Health and Retirement Study (HRS) evidence on severe long-term-care episodes and out-of-pocket medical spending, can absorb a large share of current retirement income and weaken the safe-asset role of pension income. Under this data-driven calibration, the model reproduces the nearly flat risky-share profile observed in the Survey of Consumer Finances and generates a negative health gradient consistent with HRS panel evidence, without bequest motives, housing, annuity choice, endogenous health investment, or recursive preferences. |
| Keywords: | life-cycle portfolio choice, disaster risk, long-term care, health risk, out-of-pocket medical spending |
| JEL: | D15 E21 G11 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:tur:wpapnw:109 |
| By: | Medina, Juan Pablo; Pedersen, Michael; Reyes-Tagle, Gerardo |
| Abstract: | This paper studies the long-term macroeconomic and fiscal implications of population aging in Chile using a semi-structural, multi-sector macro-fiscal model that links demographic dynamics, labor market behavior, sectoral production, fiscal revenues, age-related public expenditures, and government debt. Beyond the application to Chile, the contribution lies in the integrated nature of the framework, which allows for a consistent analysis of how demographic change propagates through the economy to affect fiscal sustainability. Chile provides a particularly relevant case given the speed of its demographic transition, the growing importance of publicly financed pension benefits, and the central role of consumption taxation, as well as a production structure in which mining plays a key role in shaping fiscal capacity. |
| Keywords: | stochastic simulations |
| JEL: | E62 H30 H55 H68 J11 J26 E17 Q33 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14734 |
| By: | Peter A. Diamond |
| Abstract: | Public pension systems are long-term social contracts operating under persistent economic, demographic, and political uncertainty. Periods of turbulence, marked by financial shocks, changes in longevity, and shifting labour markets, test the capacity of pension institutions to adapt while maintaining adequacy, equity, and legitimacy. Building on earlier joint work on pension economics and reform with Nicholas Barr, this chapter analyses the role of automatic and semi-automatic adjustment mechanisms in public pension design. Drawing on comparative experience from Sweden, Canada, and the United States, we examine mechanisms for maintaining financial balance, the incorporation of life expectancy into retirement age and benefit design, and the accumulation and drawdown phases of defined contribution pensions. We argue that well-designed automatic mechanisms can discipline political decision-making and improve resilience, but only if they are proportionate, transparent, and attentive to distributional and intergenerational consequences. In turbulent times, good pension design does not eliminate the need for political choice; rather, it structures that choice so that adjustment can occur without repeated crises. |
| JEL: | H55 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35693 |
| By: | Joan Costa-Font; Sergi Jiménez-Martín; Cristina Vilaplana Prieto |
| 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: | cost per QALY, life satisfaction, long-term care, long-term care subsidies, long-term care supports, mental health, mortality, old age care, Spain, survival |
| JEL: | I18 J14 J16 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1593 |
| By: | Doorley, Karina; Gubello, Michele |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:esr:wpaper:wp829 |
| By: | Octavio Granado |
| Abstract: | En la liquidación del Presupuesto de la Seguridad Social, en la parte del sistema de pensiones, las prestaciones que no son estrictamente la pensión de jubilación suponen el 26, 3% del conjunto de prestaciones contributivas, a las que habría que sumar otro porcentaje, el de las pensiones de incapacidad “transubstanciadas” en pensiones de jubilación a partir de los 65 años, que por ejemplo entre las que cobran complementos a mínimo son la cuarta parte de las de jubilación. En ese caso, estaríamos hablando de un porcentaje superior al 30% del gasto en pensiones. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:fda:fdaeee:eee2026-27 |
| By: | Tatar, Balint; Wieland, Volker |
| Abstract: | The German economy has been in stagnation for some time while the government is faced with high and rising costs of the social security system, defence and interest on debt. Structural reforms are needed to stabilize the social system and to strengthen potential growth. The recent reform package proposed by the German Pensions Commission represents an important step forward. Among other changes, it introduces a capital-funded element, which will help stabilize the existing pay-as-you-go statutory pension system. However, this will be financed by an increase of social security contributions on the order of 2 percentage points, which will dampen economic growth. According to our analysis using a large-scale structural macro model, the increase in contribution rates raises the cost of labour and may reduce GDP all else equal by approximately 0.6 percent in the medium term. The three economies in the model are calibrated to Germany, the rest of the euro area and the rest of the world. Spillover effects to the rest of the euro area remain very small. Our findings should not be understood as an argument against the much-needed pension reform, but should rather be taken to further strengthen the case for additional growth-oriented supply-side reforms. |
| Keywords: | pension system reform, social security contribution, macroeconomic modelling, GDP growth |
| JEL: | E27 E63 H55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:imfswp:343583 |
| By: | Charles Yuji Horioka |
| Abstract: | In this paper, we discuss bequests and other intergenerational transfers and what impact they have on the consumption, saving, and labor supply behavior of households. We show that bequests and other intergenerational transfers are prevalent in most countries, that they are sometimes motivated by altruism and sometimes by selfishness, that they affect the consumption and saving behavior of households to some extent, especially that of elderly households, that they affect the labor supply behavior of households, especially that of bequest recipients, and that they have important policy implications. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1288r |
| By: | Nikolova, Milena; Angelini, Viola |
| Abstract: | As populations age, longer working careers become more essential, and technological advancements may prolong or shorten career spans. We examine how exposure to industrial robots, information and communication technology (ICT), and artificial intelligence (AI) relate to retirement expectations among workers in 20 European countries. To this end, we link individual-level data from the European Working Conditions Survey (2005-2024) with lagged technology-exposure measures. Technology exposure shows li[le systematic association with preferred retirement timing. Nevertheless, robots and especially AI are linked to the perception of being able to work until age 60. These associations vary across workers and tasks, suggesting that job design and worker adaptation determine whether technology supports longer working lives. |
| Keywords: | retirement, expectations, technological change, robots, ICT, AI |
| JEL: | I31 J26 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1813 |
| By: | Hanika, Sebastian; Focacci, Chiara Natalie |
| Abstract: | This paper examines how occupational restructuring within local labour markets shapes the employment opportunities of older workers. Using longitudinal Swedish register data covering workers across 69 functional local labour markets between 2017 and 2023, we show that greater occupational restructuring is associated with greater occupational narrowing among older workers. This relationship is moderated by local labour market characteristics. Thicker and more dynamic labour markets, with greater occupational diversity and job churning, provide broader opportunities for occupational adjustment. The findings highlight the importance of regional opportunity structures for old-age employment in ageing economies. |
| Date: | 2026–09–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:ws57n_v1 |
| By: | YiLi Chien; Hyungsuk Lee; Junsang Lee |
| Abstract: | Can governments use a carry-trade strategy to offset the fiscal costs of population aging? We examine this question through the consolidated balance sheet of Korea’s public sector, combining the assets and liabilities of the government, public pension and investment funds, and the central bank. The consolidated balance sheet reveals increasing reliance on a carry trade in which risky, increasingly foreign assets are financed with safe, low-yielding domestic liabilities. This strategy has generated a favorable return spread and strengthened public net worth. However, present-value accounting shows that projected government and pension deficits substantially exceed the public sector’s accumulated financial wealth. A VAR-based simulation similarly indicates that persistent structural deficits eventually overwhelm the returns from public assets and drive consolidated net worth deeply negative. Financial repression can delay this deterioration but cannot restore fiscal sustainability; moreover, it shifts the cost disproportionately to less financially sophisticated depositors. Neither the carry trade nor financial repression can substitute for fiscal and pension reform. |
| Keywords: | consolidated balance sheet; carry trade; financial repression; fiscal sustainability |
| JEL: | E58 E62 E63 G11 G12 H63 |
| Date: | 2026–08–29 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlwp:103774 |
| By: | Chiara Canta (TBS - Toulouse Business School); Helmuth Cremer (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | We study the optimal long-term care (LTC) policy when informal care can be provided by children in exchange for monetary transfers from their elderly parents. We consider a bargaining model with single-child families, where daughters have lower labor market wages, and bargaining power within the family varies by the child's gender. In the laissez-faire scenario, daughters always provide more informal care than sons. When their bargaining weight is smaller, they also experience lower welfare; however, this may be reversed if their bargaining weight is sufficiently high. The first-best outcome involves redistribution from families with sons to families with daughters and can be implemented through a gender-specific schedule of public LTC benefits and state-contingent transfers to adult children. Gender neutrality disadvantages families with daughters and may even leave daughters worse off than under laissez faire. It also leads to a distorted allocation of care within families with daughters and affects the distribution of transfers in all families. |
| Keywords: | informal care, Long-term care, strategic bequests, family bargaining, gender-neutrality |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05746561 |
| By: | Juan Carlos Gutiérrez-Betancur (Escuela de Finanzas, Economía y Gobierno, Universidad EAFIT) |
| Abstract: | El diseño de políticas públicas en materia pensional y de salud en Colombia se ha fundamentado históricamente en la presunción de un envejecimiento poblacional homogéneo. Sin embargo, la transición demográfica del país no es un proceso lineal ni simétrico. La evidencia proyectada revela una profunda divergencia espacial: mientras ciertas regiones periféricas aún transitarán por la madurez de su bono demográfico, otros departamentos experimentarán una contracción severa de su base productiva y un ensanchamiento crítico en las edades avanzadas. Esta asimetría en el choque demográfico impone la necesidad urgente de abandonar las métricas de expectativa de vida ancladas a promedios nacionales, las cuales invisibilizan la vulnerabilidad socioeconómica subnacional. Resulta imperativo transitar hacia marcos de valoración que cuantifiquen de manera estricta el riesgo de longevidad extremo, reconociendo que legislar bajo el supuesto de homogeneidad territorial no solo subestima la presión fiscal, sino que configura un sistema de subsidios cruzados financieramente insostenible. |
| Keywords: | Transición demográfica; envejecimiento poblacional; riesgo de longevidad; razón de dependencia; mortalidad; sistema pensional; política pública; silver economy |
| JEL: | J11 J14 H55 J26 C53 R23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:col:000122:023626 |
| By: | Shuaizhang Feng; Lars Lefgren; Jieyi Liu; Brennan Platt; Xiaoyu Xia |
| Abstract: | We study age discrimination in a labor market with a job ladder, where worker productivity is revealed over time. Using data from a large Chinese recruitment platform that links job postings, applications, and employer responses, we document sharp declines in applications and callbacks at posted age cutoffs. Discrimination operates in both directions: older applicants are disadvantaged in entry-level jobs, while younger applicants are less likely to be hired into managerial roles. A model of statistical discrimination with imperfect signal screening explains these patterns. Consistent with the model, older applicants to entry-level jobs are negatively selected relative to their peers. |
| JEL: | J71 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35709 |