|
on Economics of Ageing |
| By: | Pierre-Carl Michaud |
| Abstract: | In this paper, we analyze the link between the age at which individuals start receiving their pension from the Québec Pension Plan (QPP) and their disposable income (after taxes) once retired. Despite the fact that many choose to begin receiving their pension early, we show that those who do so achieve a particularly high replacement rate in retirement in Quebec. Is it a good decision to take the pension early? We exploit a predictive mortality model estimated on tax data, incorporating the effects of the Guaranteed Income Supplement (GIS) on pension deferral. We show that the heterogeneity in life expectancy is not sufficient to financially justify taking the pension early. We also demonstrate that the financial benefit of deferring the pension is significantly affected by the recovery of the GIS, which impacts more than 40% of contributors. Despite this impact, the alternative return, measured by the observed average effective return on savings, remains low by comparison, even without adjusting for the increased risk in an alternative investment. Dans cet article, nous analysons le lien entre l’âge de déclenchement de la rente de retraite du Régime de rentes du Québec (RRQ) et le revenu disponible (après impôts) une fois à la retraite. Malgré le fait que plusieurs déclenchent hâtivement la rente, nous montrons que ceux-ci atteignent un taux de remplacement à la retraite particulièrement élevé au Québec. Font-ils un bon choix de prendre la rente hâtivement? Nous exploitons un modèle prédictif de la mortalité estimé sur des données fiscales incorporant les effets du Supplément de revenu garanti (SRG) sur le report de la rente. Nous montrons que l’hétérogénéité d’espérance de vie n’est pas suffisante pour justifier financièrement un âge hâtif du début de la rente. Nous montrons que le gain financier du report est grandement affecté par la récupération du SRG, qui touche plus de 40% des cotisants. Malgré cet impact, le rendement alternatif mesuré par le rendement moyen effectif observé sur l’épargne demeure faible en comparaison, même sans ajustement pour le risque accru dans un placement alternatif. |
| Keywords: | Retirement pension, Mortality, Income, rente de retraite, mortalité, revenu |
| JEL: | H55 I14 J14 |
| Date: | 2024–11–12 |
| URL: | https://d.repec.org/n?u=RePEc:cir:cirwor:2024s-07 |
| By: | Morshed, Monzur |
| Abstract: | This paper highlights economic challenges of older workers in precarious employment in Bangladesh. With aging populations and evolving economies from agriculture to manufacturing, many of the older workers especially in informal work such as the garment sector in Bangladesh- face job insecurity, poverty wages, and little protection. For many older women, though it is more difficult because of gender issues such as lower lifetime wages compared to men and limited opportunities in the job market. The study calls for reform of social protection systems and anti-age discrimination legislation; re-skilling programmes; as well as greater cooperation between governments, employers and organizations to help older workers in vulnerable employment. |
| Date: | 2024–11–12 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:uh3py |
| By: | Rainer Kotschy; David E. Bloom; Andrew J. Scott; Rainer Franz Kotschy |
| 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 behaviour 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, chronological aging, physiological aging, physiological functioning, longevity |
| JEL: | I10 I30 J10 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11451 |
| By: | Bellés-Obrero, Cristina; La Mattina, Giulia; Ye, Han |
| Abstract: | The prevalence and determinants of intimate partner violence (IPV) among older women are severely understudied. This paper documents that the incidence of IPV remains high at old ages and provides the first evidence of the impact of access to income on IPV for older women. We leverage a Mexican reform that lowered the eligibility age for a non-contributory pension and a difference-in-differences approach. Women's eligibility for the pension increases their probability of being subjected to economic, psychological, and physical IPV. The estimated effects are found only among women in the short-term and are more pronounced for women who experienced family violence in childhood and those from poorer households. In contrast, we show that IPV does not increase when men become eligible for the non-contributory pension. Looking at potential mechanisms, we find suggestive evidence that men use violence as a tool to control women's resources. Additionally, women reduce paid employment after becoming eligible for the pension, which may result in more time spent at home and greater exposure to violent partners. |
| Keywords: | Non-contributory pension;intimate partner violence;retirement;Income |
| JEL: | I10 I12 I14 I31 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13830 |
| By: | Giulio Fella (Institute for Fiscal Studies); Martin B. Holm (University of Oslo); Thomas M. Pugh (Bank of Canada) |
| Date: | 2024–01–18 |
| URL: | https://d.repec.org/n?u=RePEc:ifs:ifsewp:24/02 |
| By: | Guy Lacroix; Pierre-Carl Michaud |
| Abstract: | We provide empirical evidence on the effectiveness of a tax measure aimed at increasing the employment rates of older workers in Quebec, Canada. We use several data sources and various identification strategies. First, we use a Quebec-Ontario difference-in-differences design and do not detect robust effects on employment for most age groups except for those aged 60 to 64, but the common trend assumption is found not to hold. For this last group, we use an alternative identification strategy that exploits the variation in treatment intensity over time using longitudinal administrative tax data for Quebec only. Doing so, we do not find any effect on transitions in or out of the labour force. We do find a small positive effect on earnings (intensive margin) but a negative one on the affected workers’ net tax liability. Finally, addressing the invalid comparison with Ontario, we investigate the impact of the credit using a staggered adoption design exploiting differences across cohorts within Quebec. The results are consistent with the alternative approach. We conclude that the tax measure does not appear to be a cost-effective way of raising public revenues nor of increasing the employment rates of older workers. Nous fournissons des preuves empiriques sur l'efficacité d'une mesure fiscale visant à augmenter les taux d'emploi des travailleurs plus âgés au Québec, Canada. Nous utilisons plusieurs sources de données et différentes stratégies d'identification. Tout d'abord, en appliquant la méthode des différences-en-différences entre le Québec et l'Ontario nous ne trouvons pas d'effets robustes sur l'emploi pour la plupart des groupes d'âge, à l'exception de ceux âgés de 60 à 64 ans, mais l'hypothèse de tendance commune ne semble pas être vérifiée. Pour ce dernier groupe, nous utilisons une stratégie d'identification alternative qui exploite la variation de l'intensité du traitement au fil du temps en utilisant les données administratives longitudinales sur les impôts pour le Québec seulement. Ce faisant, nous ne trouvons aucun effet sur les transitions ni d'entrée dans la population active ni de sortie de la population active. Nous constatons néanmoins un léger effet positif sur les revenus (marge intensive) mais un effet négatif sur la charge fiscale nette des travailleurs affectés. Enfin, pour remédier à la comparaison invalide avec l'Ontario, nous étudions l'impact du crédit en utilisant une modélisation «d'adoption échelonnée» (staggered adoption design), exploitant les différences entre les cohortes au sein du Québec. Les résultats sont cohérents avec l'approche alternative. Nous concluons que la mesure fiscale ne semble pas être approche efficiente d'augmenter les revenus de l'État ni d'augmenter les taux d'emploi des travailleurs plus âgés. |
| Keywords: | older workers, labour market participation, tax incentives, travailleurs plus âgés, participation au marché du travail, incitations fiscales |
| JEL: | J14 J16 H31 |
| Date: | 2024–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:cir:cirwor:2024s-06 |
| By: | Baker, Emma; Beer, Andrew; Leishman, Chris; Vij, Akshay; Stone, Wendy; Morey, Claire; Veeroja, Piret; Indraratna, Kavishka; Dunn, James R; Pomeroy, Steve |
| Abstract: | Three out of five Australian renters say they expect they will never own their own home — a significant shift that requires rethinking of tax and housing systems so that governments’ support all Australians in a two tier housing market (of owners and renters) into retirement, according to new AHURI research. The policy challenge is to make renting a good, long-term housing outcome for renters, particularly lower-income, older renters with limited superannuation. The research highlights that in the Australian Housing Aspirations (AHA) survey a large majority (78%) of private rental tenants aspired to own their own home, while the research survey found three out of five (59%) private renters don’t think they will ever be able to afford to buy a home of their own. Currently, homeowners receive tax concessions that are not available to renters. Examples include no capital gains tax on the sale of the primary residence (which becomes a form of wealth accumulation) and no tax on the imputed rental income of owner occupied housing. Conversely, renters are required to pay rent after income tax. A fairer housing and tax system (for retirement investment) could see some lower income private renters compensated for living long-term in the sector. This support could come through the provision of non-property investment opportunities (to reduce households’ need to 'rentvest') or targeted superannuation benefits. Sustained underinvestment in social housing stock has also had long-term negative implications for all Australians and additional public housing construction is needed as a priority, together with policies to support private developers increasing the supply of affordable housing. In addition, a more immediate goal for policy development is to reform legislation controlling private tenancies so as to have better protections for tenants. |
| Date: | 2024–10–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:ftqx6 |