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on Economics of Ageing |
| By: | Lingguo Cheng (Institute for Advanced Research, Shanghai University of Finance and Economics, China); Hong Liu (China Economics and Management Academy, Central University of Finance and Economics, Beijing, China); Ye Zhang (School of Business, Nanjing University, Nanjing, China); Zhong Zhao (School of Labor and Human Resources, Renmin University of China, China) |
| Abstract: | This paper estimates the causal effect of income on health outcomes of the elderly and in vestigates underlying mechanisms by exploiting an income change induced by the launch of China's New Rural Pension scheme (NRPS). Using this policy experiment, we address the endogeneity of pension income by applying a fixed-effect model with instrumental variable correction. The results reveal that pension enrollment and income from the NRPs both have had a significant beneficial impact on objective measures of physical health and cognitive function of the rural elderly. Pension recipients respond to the newly acquired pension income in multiple ways: improved nutrition intake, better accessibility to health care, increased informal care, increased leisure activities, and better self-perceived relative economic situation. These in turn act as channels from pension income to health outcomes of the Chinese rural elderly. |
| Keywords: | Pension income, Health, Channels, Elderly, China |
| JEL: | H55 I12 I38 J14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:782 |
| By: | Sona Badalyan |
| Abstract: | This paper exploits a unique norm-shifting setting—a German pension reform that equalized retirement ages across genders—to examine how old-age employment propagates through workplace networks. The reform raised women’s earliest claiming age from 60 to 63 for cohorts born in 1952 onward. Using the universe of workgroups from social security records, I compare women whose peers were just above or below the reform cutoff. I find that women are more likely to remain employed at older ages when their peers do, with stronger effects in the regions of former West Germany, with its traditional gender norms. Gender-neutral pension reforms thus amplify their impact through peer influence, fostering regional convergence in late-career employment patterns. |
| Keywords: | aging, gender, peer effects, old age employment, social norms |
| JEL: | D85 H55 J14 J16 J22 J26 Z13 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:cer:papers:wp800 |
| By: | Hamid Noghanibehambari; Jason Fletcher |
| Abstract: | An old and debated line of research examines the income-mortality relationship and finds mixed evidence. In this paper, we re-evaluate previous studies using a new dataset and implementing a difference-in-difference model based on a Notch in Social Security retirement benefits to overcome selection and endogeneity issues. We employ Social Security Administration death records and find a positive income-longevity relationship. Moreover, we find more pronounced effects among low-educated individuals and people from low socioeconomic status families. Analyses using census data suggest that part of the reductions in retirement income are offset by wage income due to post-retirement labor force participation. Past age 80, the net adverse effects of the policy on both income and longevity become more pronounced. |
| JEL: | H40 H50 I1 I18 J1 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34199 |
| By: | Adam Lavecchia; James Stutely |
| Abstract: | This paper documents sharp bunching in third-party reported employment earnings at a basic exemption for social security contributions among older workers. Beginning in 2012, workers age 60-64 who were receiving a public pension were required to make social security contributions equal to 9.9 percent of their employment earnings above a basic exemption threshold of $3, 500. Using administrative data on third-party reported earnings and a differences-in- bunching estimator we document sharp bunching at the $3, 500 threshold. We argue that our results represent new evidence on the role of firms in mediating the earnings response to payroll taxes. |
| Keywords: | social security contributions, sharp bunching, employment earnings |
| JEL: | H20 H24 H25 H31 H32 H55 J22 J23 J38 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12112 |
| By: | Henrik Yde Andersen (Danmarks Nationalbank); Camilla Skovbo Christensen (Department of Economics, University of Copenhagen); Claus Thustrup Kreiner (Department of Economics, University of Copenhagen); Søren Leth-Petersen (Department of Economics, University of Copenhagen) |
| Abstract: | Many people forgo substantial economic gains by not responding to financial incentives, even in major decisions such as retirement savings and mortgage refinancing. But do the same people systematically fail to respond across financial contexts? We study this using a quasi-experimental setting that combines policy changes in pension incentives with shifts in mortgage refinancing incentives from interest rate fluctuations. Linking Danish administrative records, we uncover a striking independence between financial decisions: people who are inactive in one context are not systematically inactive in the other. One implication is that the costs of inaction are not concentrated among specific groups. |
| Keywords: | Tax incentives for pension savings, Mortgage refinancing, inaction |
| JEL: | G51 H24 |
| Date: | 2025–09–16 |
| URL: | https://d.repec.org/n?u=RePEc:kud:kucebi:2511 |
| By: | Matteo Buttarazzi; Tiziano De Angelis; Gabriele Stabile |
| Abstract: | This paper addresses the problem of determining the optimal time for an individual to convert retirement savings into a lifetime annuity. The individual invests their wealth into a dividend-paying fund that follows the dynamics of a geometric Brownian motion, exposing them to market risk. At the same time, they face an uncertain lifespan influenced by a stochastic mortality force. The latter is modelled as a piecewise deterministic Markov process (PDMP), which captures sudden and unpredictable changes in the individual's mortality force. The individual aims to maximise expected lifetime linear utility from consumption and bequest, balancing market risk and longevity risk under an irreversible, all-or-nothing annuitization decision. The problem is formulated as a three-dimensional optimal stopping problem and, by exploiting the PDMP structure, it is reduced to a sequence of nested one-dimensional problems. We solve the optimal stopping problem and find a rich structure for the optimal annuitization rule, which cover all parameter specifications. Our theoretical analysis is complemented by a numerical example illustrating the impact of a single health shock on annuitization timing, along with a sensitivity analysis of key model parameters. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.13091 |
| By: | Hyunduk Suh; Nathaniel A. Throckmorton |
| Abstract: | This paper examines how very low fertility rates in East Asia might affect inflation in the face of fiscal limits. In a calibrated overlapping-generations model, low fertility rates cause the debt-to-GDP ratio to rise, which can push the tax rate to a political ceiling and force either monetary accommodation or reduced transfers to retirees. The fiscal limit creates inflationary pressure relative to a scenario with no fiscal limit, adding to our understanding of possible inflation outcomes in aging economies. Korea faces the strongest demographic headwind and is projected to experience the earliest fiscal limit and highest inflation rates, with inflation projected to peak roughly 10 years later and 2.5pp higher with a fiscal limit than without one. Taiwan’s more favorable initial fiscal conditions help reduce inflationary pressure, and China benefits from a delayed demographic transition that leads to lower inflation, despite worse initial fiscal conditions than Taiwan. In all countries, a higher tax rate ceiling or older retirement age effectively reduce peak inflation. |
| Keywords: | low fertility; demographic transition; population aging; East Asia; overlapping generations model; fiscal sustainability; inflation projections |
| JEL: | J11 H63 E52 E63 J13 |
| Date: | 2025–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:cwm:wpaper:171 |
| By: | Jonathan Cribb (Institute for Fiscal Studies); Anna Henry (Institute for Fiscal Studies); Heidi Karjalainen (Institute for Fiscal Studies) |
| Date: | 2025–09–17 |
| URL: | https://d.repec.org/n?u=RePEc:ifs:ifsewp:25/34 |
| By: | Svetlana Pashchenko (University of Georgia); Ponpoje Porapakkarm (National Graduate Institute for Policy Studies) |
| Abstract: | Three key drivers of savings are life-cycle, precautionary, and bequest motives. What is their relative quantitative importance? We revisit this question focusing on the role of preferences and institutions. We address the challenge of disentangling the effects of different saving motives on one's decisions by considering many aspects of people's behavior both before and after retirement. We illustrate why this approach is informative about the underlying preference parameters, and hence allows us to uncover the relative strength of different motives. Our decomposition exercises reveal that bequest motive is the key driver of savings starting from the middle-age and long before retirement. We also find that life-cycle motive and precautionary motive due to medical expense shocks play a minor role. The former result is due the crowding out effect of Social Security. The latter is due to the combined effect of health insurance and the means-tested transfers. |
| Keywords: | precautionary savings, bequest, institutions, social security, Preferences |
| JEL: | D81 D91 J32 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:hka:wpaper:2025-008 |
| By: | Tae Ung Gang; Seyoung Park; Yong Hyun Shin |
| Abstract: | This paper investigates the interactions among consumption/savings, investment, and retirement choices with income disaster. We consider low-income people who are exposed to income disaster so that they retire involuntarily when income disaster occurs. The government provides extra income support to low-income retirees who suffer from significant income gaps. We demonstrate that the decision to enter retirement in the event of income disaster depends crucially on the level of income support. In particular, we quantitatively identify a certain income support level below which the optimal decision is to delay retirement. This implies that availability of the government's extra income support can be particularly important for the low-income people to achieve optimal retirement with income disaster. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.12874 |
| By: | Stefano Boscolo (University of Bologna); Renata Bottazzi (Institute for Fiscal Studies); Riccardo Conti (Sogei S.p.A); Carlo Mazzaferro (Institute for Fiscal Studies) |
| Date: | 2025–09–18 |
| URL: | https://d.repec.org/n?u=RePEc:ifs:ifsewp:25/35 |
| By: | Krenz, Astrid; Strulik, Holger |
| Abstract: | At any given age, adult men die at a higher rate than women. In many developed countries, increasing excess mortality of men has been demonstrated for cohorts born in the late nineteenth century and thereafter. The decline in infectious diseases is believed to have contributed to the increase in male excess mortality. Here, we focus on India during 1990–2019, a period in which the Indian states experienced, to varying degrees, the epidemiological transition. We show that male excess mortality evolves positively over the observation period, is greater in later-born cohorts, and is strongly associated with the decline in infectious disease mortality. We propose a simple theory that explains these facts by a greater influence of infections on the biological aging of women compared to men. We calibrate the model with Indian data and show that it can replicate the feature of rising male excess mortality over time and birth year of cohorts. |
| Keywords: | epidemiological transition; male excess mortality; biological aging; India |
| JEL: | J11 J16 N35 |
| Date: | 2025–09–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129467 |
| By: | Lingguo Cheng (School of Business, Nanjing University, Nanjing, China); Hong Liu (China Economics and Management Academy, Central University of Finance and Economics, Beijing, China); Ye Zhang (School of Business, Nanjing University, Nanjing, China); Ke Shen (School of Social Development and Public Policy, Fudan University, Shanghai, China); Yi Zeng (Center for Healthy Aging and Development Studies, National School of Development, Peking University, Beijing, China; Center for the Study of Aging and Human Development, Geriatrics Division of School of Medicine, Duke University, Durham, NC, USA) |
| Abstract: | This paper investigates the effects of China's New Cooperative Medical Scheme (NCMS) on health outcomes and healthcare expenditure of the elderly in rural China, using panel data from the 2005 and 2008 waves of the Chinese Longitudinal Healthy Longevity Survey. We employ a strategy that combines propensity score matching with a difference-in-differences approach to address selection bias. Results show that the NCMS has significantly improved the elderly enrollees' activities of daily living and cognitive function but has not led to better self-assessed general health status. We find no significant effect of NCMS on mortality for the previously uninsured elderly in NCMS counties, although there is moderate evidence that it is associated with reduced mortality for the elderly enrollees. We also find that the elderly participants are more likely to get adequate medical services when sick, which provides a good explanation for the benefcial health effects of NCMS. However, there is no evidence that the NCMS has reduced their out-of-pocket spending. Further more, we also find that low-income seniors benefit more from NCMS participation in terms of health outcomes and perceived access to health care, suggesting that the NCMS helps reduce health inequalities among the rural elderly. |
| Keywords: | China, health insurance, health outcome, health spending, the elderly |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:781 |
| By: | Ai, Jingyi; Chen, Xi; Feng, Jin; Xie, Yufei |
| Abstract: | The study examines the early effects of cognitive-impairment (CI) friendly communities on health care utilization among older adults in Shanghai, China. By exploiting the rollout of CI-friendly communities and employing a difference-indifferences approach, we evaluate the impact of CI-friendly communities. We find that CI-friendly communities significantly increase the probability and frequency of visiting cognition-disease-related departments (CRD) by 0.7 (13.73%) percentage points and 0.02 (17.24%) times, respectively. In particular, the effect is more pronounced for individuals not previously received CRD care. The dominant mechanisms may include information and early screening effects. Additionally, CI-friendly communities affect health care utilization in other positive ways, such as reducing emergency room (ER) visits and promoting primary care use. |
| Keywords: | CI-friendly community, health care utilization, awareness of cognitive impairment |
| JEL: | I18 J14 I11 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1666 |