nep-dem New Economics Papers
on Demographic Economics
Issue of 2011‒08‒09
25 papers chosen by
Clarence Nkengne Tsimpo
University of Montreal and World Bank Group

  1. Lasting welfare effects of widowhood in a poor country By van de Walle, Dominique
  2. Is population growth conducive to the sustainability of cooperation? By Stark, Oded; Jakubek, Marcin
  3. Immigration and the Occupational Choice of Natives: a Factor Proportions Approach By Ortega, J.; Verdugo, G.
  4. Are the Labour Market Benefits to Schooling Different for Aboriginal and Non-Aboriginal People By Frenette, Marc
  5. The labor market, education and armed conflict in Tajikistan By Shemyakina, Olga N.
  6. A model of longevity, human capital and growth By Oscar Iván AVILA MONTEALEGRE
  7. War and women's work : evidence from the conflict in Nepal By Menon, Nidhiya; Rodgers, Yana van der Meulen
  8. Optimal Fertility along the Lifecycle By Pierre Pestieau; Grégory Ponthière
  9. Childbearing Age, Family Allowances and Social By Pierre Pestieau; Grégory Ponthière
  10. Is teenage motherhood contagious? Evidence from a Natural Experiment By Monstad, Karin; Propper, Carol; Salvanes, Kjell G
  11. A Network Approach to the Economic Models of Fertility By YOUM Yoosik
  12. With or Without You: Hazard of Divorce and Intra-household Allocation of Time By Domenico Tabasso
  13. The Impact of Fertility on Mothers' Labour Supply in Australia: Evidence from Exogenous Variation in Family Size By Julie Moschion
  14. Gender Differences in Competitiveness, Risk Tolerance, and other Personality Traits: Do they contribute to the Gender Gap in Entrepreneurship? By Werner Boente; Monika Jarosch
  15. Life Satisfaction and Grandparenthood: Evidence from a Nationwide Survey By Powdthavee, Nattavudh
  16. When Does Ethnic Diversity Lead to Violence? Evidence from the 2007 Elections in Kenya By Thomas Markussen; Kitavi Mbuvi
  17. Assessing Racial Discrimination in Parole Release By Mechoulan, Stéphane; Sahuguet, Nicolas
  18. Retirement Choice Simulation in Household Settings with Heterogeneous Pension Plans By Li, Jinjing; O'Donoghue, Cathal
  19. Exploring the impacts of public childcare on mothers and children in Italy: does rationing play a role? By Ylenia Brilli; Daniela Del Boca; Chiara Pronzato
  20. Disability, health and retirement in the United Kingdom By James Banks; Richard Blundell; Antoine Bozio; Carl Emmerson
  21. The Effect of Disability Pension Incentives on Early Retirement Decisions By Barbara Hanel
  22. Incentives of Retirement Transition for Elderly Workers: An Analysis of Actual and Simulated Replacement Rates in Ireland By Li, Jinjing; O'Donoghue, Cathal
  23. Involuntary Retirement and the Resolution of the Retirement-Consumption Puzzle: Evidence from Australia By Barrett, Garry F.; Brzozowski, Matthew
  24. Improving the Employment Rates of People with Disabilities through Vocational Education By Kostas Mavromaras; Cain Polidano
  25. Why training older employees is less effective By Zwick, Thomas

  1. By: van de Walle, Dominique
    Abstract: Little is known about the situation facing widows and their dependent children in West Africa especially after the widow remarries. Women in Malian society are vulnerable to the loss of husbands especially in rural areas. Households headed by widows have significantly lower living standards on average than male or other female headed households in both rural and urban areas; this holds both unconditionally and conditional on observable household and individual characteristics including age. Furthermore, the adverse welfare effects of widowhood appear to persist even after widows are absorbed into male headed households. An examination of individual measures of well-being further reveals that, relative to other women, worse outcomes for ever-widowed women persist through remarriage. These detrimental effects are passed on to children, indicating an intergenerational transmission of poverty stemming from widowhood.
    Keywords: Gender and Law,Population Policies,Gender and Development,Population&Development,Anthropology
    Date: 2011–07–01
  2. By: Stark, Oded; Jakubek, Marcin
    Abstract: This paper asks whether population growth is conducive to the sustainability of cooperation. A simple model is developed in which farmers who live around a circular lake engage in trade with their adjacent neighbors. The payoffs from this activity are governed by a prisoner's dilemma rule of engagement. Every farmer has one son when the population is not growing, or two sons when it is growing. In the former case, the son takes over the farm when his father dies. In the latter case, one son stays on his father's farm, whereas the other son settles around another lake, along with the other sons of the other farmers. During his childhood, each son observes the strategies and the payoffs of his father and of the trading partners of his father, and imitates the most successful strategy when starting farming on his own. Then mutant defectors are introduced into an all-cooperator community. The defector strategy may spread. A comparison is drawn between the impact in terms of the sustainability of cooperation of the appearance of the mutants in a population that is not growing, and in one that is growing. It is shown that the ex-ante probability of sustaining the cooperation strategy is higher for a community that is growing than for a stagnant community. --
    Keywords: Population growth,Imitation,Sustainability of cooperation
    JEL: C72 D01 D83 J19 J62 R12 R23
    Date: 2011
  3. By: Ortega, J.; Verdugo, G.
    Abstract: This paper evaluates the impact of immigration on the labor market outcomes of natives in France over the period 1962-1999. Combining large (up to 25%) extracts from six censuses and data from Labor Force Surveys, we exploit the variation in the immigrant share across education/experience cells and over time to identify the impact of immigration. In the Borjas (2003) specification, we find that a 10% increase in immigration increases native wages by 3%. However, as the number of immigrants and the number of natives are positively and strongly correlated across cells, the immigrant share may not be a good measure of the immigration shock. When the log of natives and the log of immigrants are used as regressors instead, the impact of immigration on natives’ wages is still positive but much smaller, and natives’ wages are negatively related to the number of natives. To understand this asymmetry and the positive impact of immigration on wages, we explore the link between immigration and the occupational distribution of natives within education/experience cells. Our results suggest that immigration leads to the reallocation of natives to better-paid occupations within education/experience cells.
    Keywords: Immigration, Impact, France.
    JEL: J15 J31
    Date: 2011
  4. By: Frenette, Marc
    Abstract: It is well documented that Aboriginal people generally have lower levels of educational attainment than other groups in Canada, but little is known about the reasons behind this gap. This study is the first of two by the same author investigating the issue in detail. This initial paper focuses on one potential reason for differences in educational attainment between Aboriginal and non-Aboriginal individuals: the possibility that Aboriginal individuals reap fewer labour market benefits from additional schooling than do their non-Aboriginal counterparts. The results of this analysis, which is based on the 2006 Census of Population, show that additional schooling is generally associated with a larger decline in the probability of being unemployed for Aboriginal people compared to non-Aboriginal people. In terms of wages and salaries, additional schooling generally yields about the same benefits for both groups. The results hold whether Aboriginal people live off-reserve, on-reserve, or in northern communities. There is also no evidence that Aboriginal people who eventually choose to pursue further education following high school are a more select group than their non-Aboriginal counterparts in terms of academic performance; this suggests that the results in this study are not likely to be explained by self-selection. Furthermore, there is little evidence that perceptions of the benefits to schooling are any different for Aboriginal youth than for non-Aboriginal youth. These findings suggest that the labour market benefits to schooling are not likely to be a factor behind the lower levels of educational attainment among Aboriginal people.
    Keywords: Educational attainment, Labour market outcomes, Aboriginal
    JEL: J15
    Date: 2011–07–27
  5. By: Shemyakina, Olga N.
    Abstract: Shortly following its independence in 1991, Tajikistan suffered a violent civil war. This study explores the effect of this conflict on education and labor market outcomes for men and women. The results are based on the data from the 2003 and 2007 Tajik Living Standards Measurement Surveys that were separated from the 1992-1998 Tajik civil war by five and nine years, respectively. The regression analysis that controls for the cohort and regional-level exposure points toward a persistent and lasting gap in the educational attainment by women who were of school age during the war and lived in the more conflict-affected regions as compared with women the same age who lived in the lesser affected regions and also to the older generation. These empirical results support the anecdotal and observational evidence about the decline in female educational attainment in Tajikistan. Interestingly, this group of young women is more likely to hold a job as compared with the rest of the analytical sample. Conditional on being employed, men and women in the more conflict-affected areas do not receive wages that are significantly different from wages received by men and women in the lesser affected areas.
    Keywords: Population Policies,Labor Markets,Gender and Development,Labor Policies,Population&Development
    Date: 2011–07–01
    Abstract: Long run economic growth and its transitional dynamics are determined in a general equilibrium model of endogenous longevity, human capital and growth. Agents in overlapping generations survive safely for the first two periods of life and face an endogenous probability of surviving for a third period. Given this probability, each agent maximizes her expected lifetime utility choosing consumption, and the quantity of resources destined to her child’s education and health. Human capital accumulation depends on education and health expenditures and on parent’s human capital. The model produces two kinds of equilibriums, one with high life expectancy, human capital and GDP, and the other with low high life expectancy, human capital and GDP. These predictions accord with the empirical evidence on demographic transitions and development.
    Date: 2010–11–03
  7. By: Menon, Nidhiya; Rodgers, Yana van der Meulen
    Abstract: This paper examines how Nepal's 1996-2006 civil conflict affected women's decisions to engage in employment. Using three waves of the Nepal Demographic and Health Survey, the authors employ a difference-in-difference approach to identify the impact of war on women's employment decisions. The results indicate that as a result of the Maoist-led insurgency, women's employment probabilities were substantially higher in 2001 and 2006 relative to the outbreak of war in 1996. These employment results also hold for self-employment decisions, and they hold for smaller sub-samples that condition on husband's migration status and women's status as widows or household heads. Numerous robustness checks of the difference-in-difference estimates based on alternative empirical methods provide compelling evidence that women's likelihood of employment increased as a consequence of the conflict.
    Keywords: Population Policies,Rural Poverty Reduction,Labor Markets,Regional Economic Development,Gender and Law
    Date: 2011–08–01
  8. By: Pierre Pestieau (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CREPP - Center of Research in Public Economics and Population Economics - Université de Liège, CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain, CEPR - Center for Economic Policy Research - CEPR); Grégory Ponthière (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, ENS - Ecole Normale Supérieure de Paris - Ecole Normale Supérieure de Paris - ENS Paris)
    Abstract: We explore the optimal fertility age-pattern in a four-period OLG economy with physical capital accumulation. For that purpose, we .rstly compare the dynamics of two closed economies, Early and Late Islands, which di¤er only in the timing of births. On Early Island, children are born from parents in young adulthood, whereas, on Late Island, children are born from parents in older adulthood. We show that, unlike on Early Island, there exists no stable stationary equilibrium on Late Island, which exhibits cyclical dynamics. We also characterize the social optimum in each economy, and show that Samuelson.s Serendipity Theorem still holds. Finally, we study the dynamics and social optimum of an economy with interior fertility rates during the reproduction period. It is shown that various fertility age-patterns are compatible with the social optimum, as long as these yield the optimal cohort growth rate. The Serendipity Theorem remains valid in that broader demographic environment.
    Keywords: childbearing ages ; early and late motherhoods ; fertility ; overlapping generations ; social optimum
    Date: 2011–07
  9. By: Pierre Pestieau (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CREPP - Center of Research in Public Economics and Population Economics - Université de Liège, CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain, CEPR - Center for Economic Policy Research - CEPR); Grégory Ponthière (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, ENS - Ecole Normale Supérieure de Paris - Ecole Normale Supérieure de Paris - ENS Paris)
    Abstract: Although the optimal policy under endogenous fertility has been widely studied, the optimal public intervention under endogenous childbearing age has remained largely unexplored. This paper examines the optimal family policy in a context where the number and the timing of births are chosen by individuals who differ as to how early fertility can weaken future earnings growth. We analyze the design of a policy of family allowances and of public pensions in such a setting, under distinct informational environments. We show how endogenous childbearing ages affect the optimalpolicy, through the redistribution across the earnings dimension and the internalization of fertility externalities. It is also shown that, contrary to common practice, children benefits differentiated according to the age of parents can, under some conditions, be part of the optimal family policy.
    Keywords: endogenous fertility ; childbearing age ; family benefits
    Date: 2011–07
  10. By: Monstad, Karin; Propper, Carol; Salvanes, Kjell G
    Abstract: There is relatively little research on peer effects in teenage motherhood despite the fact that peer effects, and in particular social interaction within the family, is likely to be important. We estimate the impact of an elder sister’s teenage fertility on the teenage childbearing of their younger sister. To identify the peer effect we utilize an educational reform that impacted on the elder sister’s teenage fertility. Our main result is that within families, teen births tend to be contagious and the effect is larger where siblings are close in age and for women from low resource households.
    Keywords: education; spillover effects; teenage pregnancy
    JEL: I21 J13 J24
    Date: 2011–08
  11. By: YOUM Yoosik
    Abstract: Since its first appearance in the late 1950s, Neoclassical economic theory of fertility, especially as exemplified by Gary Becker's model of household production function that assumed a unitary utility function of the household, has become one of the most popular paradigms to examine fertility changes. This paper intends to expand the economic model by incorporating the social network approach into the original paradigm. Social networks are crucial in determining the fertility rate of a society above and beyond parameters originally included in the neoclassical economic model in two ways. First, the extent that separate utilities of spouses could be treated in one function is, in part, dependent on the network embeddedness of spouses: intra-household network. If spouses are not embedded into each other's networks, it would be natural to drop the assumption of the unitary utility function and reformulate the decision process based on bargaining. Second, in addition to the intra-household network, inter-house networks also play a role in couple's decisions with regard to fertility. Couples need information about other couples' fertility decisions for their own and also normative pressures from other couples or friends are crucial in the dynamic process of fertility change. Social networks are a major conduit both for information and normative constraints. This paper focuses on the first kind of networks (intra-household networks) with illustrative empirical results by using the two waves of Korean Longitudinal Survey of Women and Families (KLOWF).
    Date: 2011–08
  12. By: Domenico Tabasso (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and IZA, Bonn)
    Abstract: This paper investigates the relationship between the probability of divorce and marriage specific investments. As these investments in terms of childcare and household activities are likely to increase the marital surplus, they are consequently likely to decrease the risk of divorce. All such activities, however, are characterized by gender role bias through, for example, social norms. In periods in which married women enjoy greater outside options (e.g., by increasing their labor force participation), it is expected that households in which the husband takes on typically female chores are less likely to dissolve, while couples in which the wife takes on typically male chores are more likely to divorce. The paper tests this hypothesis using data from the National Longitudinal Survey NLS) of Mature Women, the NLS Young Women, and the NLSY79. The prediction is strongly supported by the data with respect to older cohorts while it loses empirical relevance when tested on younger individuals. Furthermore, asymmetric effects between genders gain importance over time. Finally, an explanation for the relationship between divorce and marital investments is offered in terms of increasing intra-household time consumption complementarities. To this end, data from the American Time Use Surveys from 1965 to 2005 are studied to illustrate how time spent together by partners in the same household has become increasingly crucial in the American family.
    Keywords: Marital market, leisure, time use, survival analysis
    JEL: J12 J13 D12
    Date: 2011–03
  13. By: Julie Moschion (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: This paper estimates the impact of fertility on mothers’ labour supply in Australia, using exogenous variation in family size generated by twin births and the gender mix of siblings. Results show that having more than one child decreases labour market participation by 15.5 percentage points and hours worked by around 6 hours per week. Having more than two children reduces labour market participation by between 12 and 20 percentage points and hours worked by between 3 and 8 hours a week, depending on the instrument used. Interestingly, fathers also reduce both their labour market participation (by 10 percentage points) and their number of hours worked per week (by 4 hours) when having more than one child. Compared with the results obtained with the same methodology for other countries, the effects for Australia are large, which partly reflects the constraints on public childcare and the lack of a national paid parental leave scheme prior to 2011.
    Keywords: Fertility, labour market participation, Australia, family policies
    JEL: J13 J22
    Date: 2011–06
  14. By: Werner Boente (Schumpeter School of Business and Economics, University of Wuppertal); Monika Jarosch (Schumpeter School of Business and Economics, University of Wuppertal)
    Abstract: In this study we empirically investigate the contribution of personality traits to the gender gap in entrepreneurship. Our empirical analyses, which are based on data obtained from a large scale survey of individuals in 36 countries, suggest that a group of personality traits which we call Individual Entrepreneurial Aptitude (IEA) has a positive effect on latent and nascent entrepreneurship among women and men. Moreover, women’s considerably lower level of IEA contributes significantly to the gender gap in entrepreneurship. The lower level of IEA is mainly due to women’s lower levels of competitiveness and risk tolerance. Furthermore, these results are confirmed by the results of a country-level analysis which show that the within-country variation of entrepreneurial activities of women and men is significantly related to within-country variation of IEA.
    Keywords: entrepreneurship, gender gap, personality traits, competitiveness
    JEL: J16 L26
    Date: 2011–07
  15. By: Powdthavee, Nattavudh (Nanyang Technological University, Singapore)
    Abstract: This paper tests whether there is a potential payoff to grandparenthood in terms of life satisfaction. Using the new nationwide survey for the UK, which consists of over 5,000 grandparents and 6,000 non-grandparents aged 40 and above, and a flexible multiple-index ordered probit model with varying thresholds, we find that being a grandparent to at least one grandchild is associated positively and statistically significantly with individuals reporting to be very satisfied with life overall. Parents with no grandchildren are no more satisfied with life compared to non-parents of the same age. The findings suggest that even though children may not contribute significantly to parents' satisfaction with life overall, there may well be long-term benefits to having children, provided that our children go on and have children of their own.
    Keywords: life satisfaction, grandparenthood, grandchildren, generalized ordered probit, understanding society, happiness
    JEL: J13
    Date: 2011–07
  16. By: Thomas Markussen (Department of Economics, University of Copenhagen); Kitavi Mbuvi (Kenya Institute of Education)
    Abstract: Some people have a concern for a fair distribution of incomes while others do not. Does such a concern matter for majority voting on redistribution? Fairness preferences are relevant for redistribution outcomes only if fair-minded voters are pivotal. Pivotality, in turn, depends on the structure of income classes. We experimentally study voting on redistribution between two income classes and show that the effect of inequality aversion is asymmetric. Inequality aversion is more likely to matter if the “rich” are in majority. With a “poor” majority, we find that redistribution outcomes look as if all voters were exclusively motivated by self-interest.
    Keywords: Conflict; ethnicity; poverty; unemployment; public services; Kenya
    JEL: D74 H4 J6 O55
    Date: 2011–07
  17. By: Mechoulan, Stéphane; Sahuguet, Nicolas
    Abstract: We investigate possible racial discrimination in the context of discretionary parole release. We develop a rational choice model of release whereby a parole board must balance parolees' risk of violation with the cost of not releasing prisoners who may not violate their parole. A color-blind parole board would release all individuals below a certain risk threshold. To test this prediction, we take advantage of a unique data set that reports all prisoners released on parole between 1983 and 2003 in the U.S. We apply the outcome test methodology recently used to assess racial profiling in police search decisions. Here, a higher rate of parole violation within a group suggests that the parole board used a less restrictive paroling criterion, and is thus biased in favor of that group. To overcome the concern of inframarginality that traditionally plagues outcome tests we provide evidence that parole boards strategically time the release of parolees. In turn, both minority and White prisoners become marginal from the perspective of their probability of parole violation. Parole boards operating under an indeterminate sentencing regime appear biased against White prisoners whose violation rate is significantly smaller than that of African Americans. In contrast, this gap is smaller or null when there is no discretion in the paroling system. Further evidence rules out post-release discrimination. We propose different hypotheses to account for the evidence.
    Keywords: discrimination; outcome test; parole release; race
    JEL: J15 K40
    Date: 2011–08
  18. By: Li, Jinjing (Maastricht University); O'Donoghue, Cathal (Teagasc Rural Economy Research Centre)
    Abstract: This paper estimates a structured life cycle model of family retirement decision using a unique historical dataset back simulated from Living in Ireland survey. Our model takes the advantages of the dataset and models retirement decisions in terms of monetary and leisure incentives, which reflect the complex welfare system in Ireland. The household extension version of the model adapts a collective modelling approach, where the intra-household bargaining is considered. We further incorporate complimentary leisure, which allows us to analyse the interactions of spouses' retirement timing. This methodology enables us to capture the dynamics of retirement and tax-benefit policies and can be used to simulate the effect of policy reform on household retirement behaviours. The paper, in addition, applies the model to assess individual budgetary implications and the labour market impact of rising the minimum retirement age. Our simulation shows that increasing the minimum age for state pension entitlement to 70 would only delay the retirement by less than 2 years according to the individual based model. When we consider the intra-household bargaining and the higher preference of leisure found in the dual career households, the effect of postponing retirement further declines. The result suggests barely postponing the minimum retirement age for state pension without redefining the occupation and private pension rules will only have limited impact for household retirement behaviour in Ireland.
    Keywords: retirement, choice modelling, microsimulation
    JEL: J14 J26
    Date: 2011–07
  19. By: Ylenia Brilli; Daniela Del Boca; Chiara Pronzato
    Abstract: This paper investigates the effects of public childcare availability in Italy on mothers' working status and children's scholastic achievements. We use a newly available dataset containing individual standardized test scores of pupils attending second grade of primary school in 2008-09 in conjunction with data on public childcare availability. Public childcare coverage in Italy is scarce (12.7 percent versus the OECD average of 30 percent) and the service is "rationed": each municipality allocates the available slots according to eligibility criteria. We contribute to the existing literature taking into account rationing in public childcare access and the functioning of childcare market. Our estimates indicate that childcare availability has positive and significant effects on both mothers' working status and children's language test scores. The effects are stronger when the degree of rationing is high and for low educated mothers and children living in lower income areas of the country.
    Keywords: childcare; female employment; child cognitive outcomes
    JEL: J13 D1 H75
    Date: 2011
  20. By: James Banks (Institute for Fiscal Studies and University of Manchester); Richard Blundell (Institute for Fiscal Studies and University College London); Antoine Bozio (Institute for Fiscal Studies); Carl Emmerson (Institute for Fiscal Studies)
    Abstract: <p>This paper examines changes in health and disability related transfers in the UK over the last thirty years, and describes how they are related to changes in labour force participation. The objective is to present a comprehensive description of the reforms to the institutional setting, along with available time series coming from administrative data on benefit receipt, cross-section or panel data on self-reported health and their interactions with labour force status. By providing systematic evidence on institutions and data, we hope to help future research providing a fuller picture of the trends over this period. We also present evidence on the impact of two large reforms to disability benefits in the UK.</p>
    Date: 2011–07
  21. By: Barbara Hanel (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Institute for the Study of Labor (IZA))
    Abstract: I investigate the incentive effects of disability pensions on the labour supply decision. The implicit tax rate on further work is included as a forward looking incentive measure in order to investigate the effect of disability benefits on disability retirement entry as a special type of early retirement. A substantial change of the disability pension legislation caused exogenous variation in disability benefits in Germany in 2001 and is used to obtain estimates of individual’s responses to financial incentives. Benefit levels appear to have no effect on the labour market behaviour. At the same time, there is a sizable and significant disincentive effect of implicit taxes on labour market income, indicating that alleviating such disincentives would likely increase labour force participation. Since the response to financial incentives occurs mainly among those in good health, such a policy might on the other hand imperil the aim of providing insurance against a health induced loss of ones working capacity.
    Keywords: Disability pensions, labour force exit
    JEL: I12 J26
    Date: 2011–03
  22. By: Li, Jinjing (Maastricht University); O'Donoghue, Cathal (Teagasc Rural Economy Research Centre)
    Abstract: Retirement behaviours and elderly poverty issues have been the subject of much attention and discussion in recent years as most countries are facing a rapidly ageing society. Ireland enjoys a relatively young population compared with other European countries, but is also struggling with increasing fiscal pressures. This paper analyses the retirement pattern and the replacement rate observed in Ireland using the Living in Ireland panel dataset. Since traditional empirical estimations may have selection bias issues as people with low replacement rates may not choose to retire, the paper adopts a combined method with both synthetic household simulation and empirical estimates. The study reveals the social economic attributes patterns associated with the replacement rates and retirement behaviours, and explores the heterogeneities of replacement rates among retirees.
    Keywords: retirement, replacement rates, microsimulation
    JEL: J14
    Date: 2011–07
  23. By: Barrett, Garry F.; Brzozowski, Matthew
    Abstract: A substantial body of international research has shown that household expenditure on food and non-durables significantly decreases at the time of retirement - a finding that is inconsistent with the standard life-cycle model of consumption if retirement is an anticipated event. This fall in expenditure has become known as the `retirement-consumption puzzle.' We analyze rich Australian panel data to assess the Australian evidence on the puzzle. We find strong evidence of a fall in expenditures on groceries, food consumed at home and outside meals with retirement. The observed decline in expenditure is explained by a subset of households experiencing an unanticipated wealth shock, such as a major health event or long-term job loss, at the time of retirement. This finding is corroborated by an analysis of alternative measures of household well-being, including indicators of financial hardship, and self-reported financial and life satisfaction. For the majority of households retirement is anticipated and there is no decline in economic welfare at retirement. However, for an important minority, retirement is `involuntary' and these households experience a marked decline across all indicators of economic well-being.
    Keywords: Retirement; Household Expenditure; Consumption Smoothing
    Date: 2010–09
  24. By: Kostas Mavromaras (National Institute of Labour Studies, Flinders University; and IZA, Bonn); Cain Polidano (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: During the 2001-8 period, the employment rate of people with a disability remained remarkably low in most western economies, hardly responding to better macroeconomic conditions and favourable anti-discrimination legislation and interventions. Continuing health and productivity improvements in the general population are leaving people with disabilities behind, unable to play their role and have their share in the increasing productive capacity of the economy. This paper combines dynamic panel econometric estimation with longitudinal data from Australia to show that vocational education has a considerable and long lasting positive effect on the employment participation and productivity of people with disabilities.
    Keywords: Employment, disabilities, productivity, vocational training, dynamic panel regression
    JEL: J14 I19 I29
    Date: 2011–03
  25. By: Zwick, Thomas
    Abstract: This paper shows that training of older employees is less effective. Training effectiveness is measured with respect to key dimensions such as career development, earnings, adoption of new skills, flexibility or job security. Older employees also pursue less ambitious goals with their training participation. An important reason for these differences during the life cycle might be that firms do not offer the 'right' training forms and contents. Older employees get higher returns from informal and directly relevant training and from training contents that can be mainly tackled by crystallised abilities. Training incidence in the more effective training forms is however not higher for older employees. Given that other decisive variables on effectiveness such as training duration, financing and initiative are not sensitive to age, the wrong allocation of training contents and training forms therefore is critical for the lower effectiveness of training. --
    Keywords: Training,Older Employees,Linked-Employer-Employee Data
    JEL: J10 J24 J28
    Date: 2011

This nep-dem issue is ©2011 by Clarence Nkengne Tsimpo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.