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on Economics of Ageing |
| By: | Zhiyang Jia; Herman Kruse; Trond Christian Vigtel (Statistics Norway) |
| Abstract: | This paper investigates the welfare effects of two types of pension reforms aimed at addressing challenges due to aging populations. The study uses a framework by Kolsrud et al. (2024), decomposing welfare into consumption smoothing and fiscal externality effects. Norwegian administrative data is used to study the welfare effects of two reforms. The first is a hypothetical budget-neutral reform steepening pension incentives, which rewards late retirees. The second is the 2011 Norwegian old-age pension flexibility reform. We find that the first (hypothetical) reform is regressive. Based on consumption differences, such a reform incurs substantial consumption smoothing costs and results in significant overall welfare costs (0.4–0.5 NOK per 1 NOK transferred), highlighting the negative welfare impact of heavily penalizing early retirement. Conversely, the 2011 Norwegian old-age pension flexibility reform, which lowered the eligibility age (from age 67 to age 62) had a near-zero effect on total labor supply. Quasi-experimental evidence suggests this reform shifted the consumption distribution upwards and resulted in welfare gains, estimated at around NOK 138, 000 per affected individual. |
| Keywords: | Pension reform; welfare effects; consumption; retirement; pension claiming age |
| JEL: | J26 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:ssb:dispap:1025 |
| By: | Cristina Bellés-Obrero; Manuel Flores Mallo; Pilar García-Gómez; Sergi Jimenez-Martin; Judit Vall Castelló |
| Abstract: | This chapter studies social security reforms and trends in inequalities among older workers over the last decades in Spain. Its main goal is to analyze the redistributive impact of the various pension reforms on older income inequality. Compared to the rules in 1985, recent pension reforms have led to an average increase on Social Security Wealth of approximately 18, 000€ for men and 15, 000€ for women. This represents a ten and eight percent increase, respectively. This effect is mostly driven by the mechanical or direct effect (e.g. via benefit adjustments), while changes in retirement probability (secondary or behavioral effect) are close to zero. Furthermore, we find striking differences across income quartiles, for both men and women. In both cases, there is a clear income gradient, where the richest quartile has benefitted the most with an increase close to twenty percent, or over €50, 000, for both men and women. Conversely, the change for the poorest income quartile for men and the two poorest income quartiles for women is close to zero or even slightly negative. This is likely due to the effect of minimum benefits (that mark the generosity of the system, see Boldrin et al, 1999) that automatically absorb any other effect for low-income individuals. |
| JEL: | D31 H55 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34577 |
| By: | Adriaan Kalwij; Arie Kapteyn |
| Abstract: | Since the early 2010s, the state pension age (SPA) is one of the main public policy instruments in the Netherlands for inducing people to postpone retirement. The SPA has gradually increased from 65 years in 2012 to 66 years and 4 months in 2021. In the context of the Dutch old-age social security system, an increase in the SPA is hypothesized to decrease the retirement probability and to increase inequality in pension benefits entitlements. Empirical support for the two hypotheses is found with data on individuals aged 55–69 over the period 2011-2021. Inequality in old-age social security wealth has increased after 2015 for non-retirees. However, the findings do not support that this increase is because of the SPA increase. |
| JEL: | H0 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34569 |
| By: | Antoine Bozio; Maxime Tô; Julie Tréguier |
| Abstract: | This study analyzes the distributional effects of French pension reforms from 1993 to 2014 across different socioeconomic groups. Using administrative data for individuals born between 1934 and 1950, we examine the impact on social security wealth (SSW) across lifetime earnings deciles and genders. Our methodology incorporates differential life expectancy and exploits the PENSIPP model for counterfactual scenarios. Results show that reforms generally decreased SSW across all income groups, with regressive tendencies. The 1993 reform had the most significant impact, reducing SSW by over 15% for men in the lowest earnings decile compared to 5% for the highest. Subsequent reforms had milder effects. These findings contribute to understanding the long-term consequences of pension reforms on inequality and inform future policy decisions in countries facing similar demographic challenges. |
| JEL: | H55 J14 J26 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34576 |
| By: | Tharp, Derek (University of Southern Maine) |
| Abstract: | Nearly one-fourth of Americans claim Social Security at age 62, while only one-in-ten wait until age 70—a pattern that has long puzzled economists who argue delay is financially optimal. This paper develops a series of dynamic programming models to examine whether early claiming reflects mistakes or rational responses to preferences overlooked in standard analyses. Three behavioral factors are incorporated: a claim-retire linkage (a preference to claim benefits at retirement rather than managing a separate "bridge" period); front-loaded consumption preferences (a desire to spend more in the early, active years of retirement); and source-dependent utility (greater comfort spending from regular income like Social Security than drawing down a retirement portfolio). Using Epstein–Zin recursive utility with stochastic investment returns, medical expenditure shocks, mortality risk, policy risk, and bequest motives, results show that incorporating these empirically documented factors substantially lowers optimal claiming ages. Under the full behavioral specification, claiming at 62 is optimal for households with up to $800, 000 in initial wealth—a wealth level that encompasses the vast majority of Americans approaching retirement. Results are qualitatively robust to alternative assumptions about mortality, bequest strength, tax treatment, and spousal or survivor benefits. These findings suggest that widespread early claiming may reflect genuine preferences rather than financial mistakes, though individual circumstances—including wealth, employment status, tax situation, and personal preferences—may provide incentives toward delay. Rather than uniformly prescribing delay, advisors should assess clients' goals, circumstances, and preferences and tailor recommendations accordingly. |
| Date: | 2025–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:wx6jn_v1 |
| By: | Kirschenmann, Karolin; Knebel-Seitz, Caroline |
| Abstract: | How do retirees choose among home equity release products? Despite housing wealth being households' largest asset, little is known about preferences for different equity release products. We conduct a survey experiment comparing home annuities, reverse mortgages, and an opt-out option among the German adult population. We find that presentation format (simultaneous vs. sequential) does not affect product choices. The majority of participants prefer no equity release product. Among those selecting equity release, home annuities are preferred over reverse mortgages. Individual characteristics, in particular risk tolerance, bequest motive, and financial literacy predict choices. The latter highlights the importance of consumer education given the complexity of these long-term financial decisions. |
| Keywords: | Equity release products, reverse mortgage, home annuity, retirement planning, financial literacy |
| JEL: | D14 G20 G51 G53 J26 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:333933 |
| By: | Giulia Klinges; Alain Jousten; Mathieu Lefebvre |
| Abstract: | Over the years, the Belgian social security system has undergone substantial reform with a prime focus on increasing older worker labor force participation. The paper explores the effect of past reforms on inequality in old age. We distinguish two separate effects: The mechanical effect considers the change in inequality and expected benefit levels due to the reforms for a fixed retirement age distribution. The behavioral effect accounts for the endogenous change caused by changes in the incentives to work. Our results show that mechanically, reforms have led to losses in expected benefits for all but the lowest income quintile. Behavioral changes had a positive but orders of magnitude smaller effect. Overall, inequality decreased as a result of reforms. |
| JEL: | D63 H55 I38 J26 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34579 |
| By: | Charles Yuji Horioka; Luigi Ventura |
| Abstract: | We analyze the saving motives of European households using micro-data from the Household Finance and Consumption Survey, which is conducted by the European Central Bank. We find that the rank ordering of saving motives differs greatly depending on what criterion is used to rank them. We find that the precautionary motive is the most important saving motive of European households when the proportion of households saving for each motive is used as the criterion to rank them but that the retirement motive is the most important saving motive of European households if the quantitative importance of each motive is taken into account. Moreover, the generosity of social safety nets seems to affect the importance of individual saving motives, with saving for the retirement motive being less important in countries with generous public pension benefits and saving for the precautionary motive being less important in countries with generous public health systems. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1251r |
| By: | Clémentine Garrouste (PSL, Paris-Dauphine University); Alain Paraponaris (Aix-Marseille Univ., CNRS, AMSE, Marseille, France); Nicolas Sirven (Arenes (UMR CNRS 6051), EHESP, The French School of Public Health, Paris/Rennes.) |
| Abstract: | We provide a comprehensive picture of the change in the health status for the self-employed aged 50 and upwards in Europe. We find that self-employed workers are in better physical health than employees at younger ages, due potentially to a selection effect. We also find a negative effect of self-employment status on objective health, leading to worse physical conditions at older ages, despite a catching-up of healthcare consumption after retirement. The examination of the evolution of the self-employed healthcare consumption enables us to distinguish two components: an intense health restoration effect and a regular one, corresponding to two distinct periods in their life. We interpreted the former effect as the increased probability of the self-employed to be hospitalized during their careers, meaning that the self-employed seek care later or for serious reasons only. The latter effect or the regular restoration effect meaning a greater number of medical visits for the self-employed after retirement which is potentially due to a reduction in the opportunity cost of the use of healthcare resources. |
| Keywords: | Self-employment, Health status, Health care consumption, SHARE survey |
| JEL: | I10 I12 J18 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:aim:wpaimx:2529 |
| By: | Claudio Daminato; Irina Gemmo |
| Abstract: | Sound retirement planning requires individuals to have precise beliefs about their survival chances. Based on an online survey experiment administered to a representative sample of the US population, we provide first evidence of the patterns of individuals’ uncertainty about their survival probabilities, i.e., survival ambiguity, over the life-cycle. To this end, we devise a novel direct measure of survival ambiguity at the individual level, using the variance of the distribution of subjective survival probabilities. Leveraging experimental variation, we find that providing information about objective survival chances decreases individuals’ degree of survival ambiguity. Further, we show that individuals’ survival ambiguity is strongly negatively associated with individuals’ savings rates. Finally, we provide a realistic life-cycle model of savings and portfolio choice that rationalizes the empirical evidence. Our findings provide an explanation for the observation that many individuals “save too little” for their retirement and support information campaigns about individuals’ objective survival chances in addition to financial education programs to improve retirement security, as survival ambiguity presents a previously unexplored determinant of financial well-being. |
| Keywords: | Life Cycle, Savings Behavior, Subjective Expectations, Survival Ambiguity |
| JEL: | D15 D91 G51 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:rsi:irersi:21 |
| 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:1288 |
| By: | Despina Gavresi (DEM, University of Luxembourg); Anastasia Litina (Department of Economics, University of Macedonia); Sofia Tsitou (University of Ioannina) |
| Abstract: | This paper identifies societal aging as a key driver of populism in Europe, emphasizing the non-linear relationship between the two. Using multilevel regression analysis on individuals from 29 European countries between 2002 and 2021, we analyze how societal aging ; measured by the age dependency ratio and its square shapes populist attitudes. Drawing on ten rounds of the European Social Survey, we examine voting, trust in political institutions, and immigration attitudes. Our findings reveal a U-shaped relationship between societal aging and political behaviour. We argue that demographic structure of society influences political attitudes beyond individual aging. The results highlight the importance of accounting for non-linear demographic effects when analyzing political behavior in aging societies. |
| Keywords: | Societal Aging, Political Behaviour, Non-Linear Dynamics |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:mcd:mcddps:2025_05 |
| By: | Ahammer, Alexander (University of Linz); Halla, Martin (Vienna University of Economics and Business); Heckl, Pia (Ifo Institute for Economic Research); Winter-Ebmer, Rudolf (Johannes Kepler University Linz) |
| Abstract: | Long-term unemployment among older workers is particularly difficult to overcome. We study the impacts of a large-scale job guarantee program that offered up to two years of fully subsidized employment to long-term unemployed individuals aged 50 and above. Using a sharp age-based discontinuity in eligibility, we find that participation increased regular, unsubsidized employment by 43 percentage points two years after the program ended. The gains are driven by transitions into new firms and industries, rather than continued subsidized employment, and we find no evidence of displacement effects for non-participants or spillovers to family members. The program had no measurable short-run health effects. |
| Keywords: | subsidized employment, temporary job guarantee, long-term unemployment, health status |
| JEL: | J64 J08 J78 I14 H51 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18322 |
| By: | Youngsoo Jang (University of Queensland); Svetlana Pashchenko (University of Georgia); Ponpoje Porapakkarm (National Graduate Institute for Policy Studies) |
| Abstract: | What is the best way to reform Social Security? Academic literature offers diverging advice. There is a well-known result that the optimal size of Social Security is zero, implying it is best to phase the program out. Other studies argue that much can be gained by redesigning the program, given its current size. We provide a unified analysis that examines how the optimal size of Social Security depends on the key features of its design. We first develop a theoretical decomposition tracing the program's welfare effects to (i) income redistribution, (ii) distortions on the annuitization level, and (iii) intertemporal distortions. We then quantitatively assess the role of these channels. We show that the zero-optimal-size result arises because Social Security is too distortive and not redistributive enough. Once these design flaws are corrected, it is even optimal to increase the size of the program. |
| Keywords: | pensions, annuities, consumption and saving, life-cycle model |
| JEL: | D15 E60 H55 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:hka:wpaper:2025-012 |
| By: | Alden Cheng; Martin B. Hackmann |
| Abstract: | We provide causal evidence that patient peer effects generate mortality impacts comparable to provider quality differences. Drawing on administrative records covering 2.6 million stays (2000–2010) across 7, 200 U.S. nursing homes, we exploit plausibly exogenous roommate assignments identified through unique room identifiers. We estimate that assignment to a roommate diagnosed with Alzheimer’s disease (AD) or Alzheimer’s disease related dementias (ADRD), relative to placement in a private room, increases 90-day mortality by 2.1 percentage points (14% of baseline)—equivalent to receiving care at a nursing home one full standard deviation worse in quality. Effects differ sharply by patient type: patients with AD/ADRD benefit substantially from cognitively healthy roommates but not from private rooms, suggesting important peer monitoring and support roles. In contrast, mortality of patients without AD/ADRD does not depend on roommate cognitive health but is reduced in private rooms. A simple assignment rule exploiting this heterogeneity could reduce overall mortality by 0.8 percentage points without additional resources. |
| JEL: | D62 I11 I12 I18 J14 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34538 |
| By: | Olivera, Javier; Schokkaert, Erik; van Kerm, Philippe |
| Abstract: | This paper uses a survey experiment embedded in the Survey of Health, Ageing and Retirement (SHARE) for Luxembourg – a representative sample of the population aged 50 and above in the country – to show how provision of information influences elicited support for inheritance taxation. While support is low in generic, direct questions about inheritance taxation, support increases when respondents are asked to express views about linear tax rates with explicit tax exemption thresholds and when information is provided about how tax revenues will be used – especially if respondents are told revenues will be used to improve the quality of basic education. This information effect plays even in our setting in which the focus is on inheritances from parents to children. It is only relevant however for respondents who were initially opposed to the tax and does not affect strongly the proponents. |
| Keywords: | inheritance taxation; vignettes; survey experiment; Luxembourg; SHARE |
| JEL: | H24 D31 D63 E62 H53 |
| Date: | 2024–12–04 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130698 |
| By: | Neha Bairoliya (University of Southern California); Giovanni Gallipoli (Vancouver School of Economics, UBC); Kathleen McKiernan (Vanderbilt University) |
| Abstract: | The interaction between late-life uncertainty and end-of-life (EOL) motives generates demand for death-contingent liquidity, shaping saving, insurance, and labor-supply behaviour. Using evidence on wills, life insurance, and bequest intentions, we document the prevalence of EOL motives across household types. A quantitative life-cycle model embeds three motives—precautionary, survivor, and warm-glow—and exploits the asymmetry between liquid wealth and life insurance to identify EOL preferences. We examine how these motives interact with Social Security's illiquid annuity and assess reforms that replace part of annuity benefits with guaranteed death-contingent payouts or expand access to actuarially fair life insurance. Both policies generate portfolio "de-risking, " shifting resources toward guaranteed EOL liquidity. Significant welfare gains accrue to single, low-wealth individuals, a group often overlooked in the debate over EOL motives. |
| Keywords: | life insurance, portfolio choice problem, old age security, annuities, Consumption, Labor Supply, Marriage, inequality, wealth |
| JEL: | D31 G11 G51 G52 J26 E21 H55 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:hka:wpaper:2025-010 |
| By: | Takashi Oshio; Satoshi Shimizutani; Akiko S. Oishi |
| Abstract: | We examined the heterogeneous impacts of social security reforms in Japan over the past 40 years. We utilize a nationwide large-scale micro-dataset to compute individual-level social security wealth (SSW) and mortality rates by lifetime earning groups. We found that SSW declined for all groups after the social security reforms, which aimed to reduce generosity; however, the size of the negative impact was larger for richer individuals. These results indicate that a series of recent social security reforms have reduced inequality in SSW. |
| JEL: | H30 I31 J14 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34574 |
| By: | Clemens, Michael A. (George Mason University) |
| Abstract: | International migration policy for lower-income countries is still guided by assumptions from an earlier era—when less-educated labor was abundant, skilled emigration was seen purely as ‘brain drain, ’ and development was expected to reduce migration. That world is gone. This paper reviews recent research on migration policy in the 21st century, when demographic decline is making labor scarce globally, skilled emigration can yield net long- term gains for origin countries, and development often increases migration pressures for generations. The literature shows that migration, managed through innovative institutions, can sustain fiscal systems in aging economies, spur human capital investment at origin, and accelerate structural change. Migration is not a substitute for development, but a catalyst and major opportunity. Policy priorities include regional free-movement regimes, new destination-country partnerships, restructured skill-training systems for a mobile world, and integrating migration into aid partnerships. Much more research is needed to understand the impacts of these tools. |
| Keywords: | brain drain, skills, irregular, asylum, aging, demographic, development, emigration, immigration, migration, Africa, refugee, workforce |
| JEL: | F22 F24 F35 F65 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18308 |
| By: | Bergeron-Boucher, Marie-Pier; Trias-Llimós, Sergi; Désesquelles, Aline |
| Abstract: | Background: The structure of causes of death has changed in low-mortality countries, with recent trends showing increasing cause diversity. However, most research overlooks that several conditions often contribute to the process leading to death. Objective: This paper develops a framework for studying cause-of-death diversity that accounts for multiple causes of death (MCoD). Methods: We introduce novel MCoD life tables to estimate cause diversity based on age-standardized metrics. Two dimensions of diversity are assessed: the average number of causes contributing to death and how diverse are these causes. For the latter dimension, two indexes derived from the Gini-Simpson index are proposed, each based on a different perception of the role of the contributing causes in the process leading to death. All metrics are decomposable and applied to data from Denmark, France, Spain and the U.S. Results: The results show increased cause diversity, both in terms of the average number of causes and how evenly deaths are distributed across groups of causes. MCoD yields higher diversity than the underlying causes of death (UCD), confirming that relying solely on UCD downplays the complexity of the mortality process. However, the increase over time in diversity is more modest when using MCoD compared to UCD. The main driver of increasing cause diversity is the decline in mortality from diseases of the circulatory system. Contribution: This study offers a novel framework for analyzing cause diversity using MCoD. The proposed metrics are intuitive, life-table-based, and provide valuable insights into the growing complexity of the mortality process across countries. |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:mv36f_v1 |