nep-dem New Economics Papers
on Demographic Economics
Issue of 2013‒02‒08
eighteen papers chosen by
Clarence Nkengne Tsimpo
University of Montreal and World Bank Group

  1. How taxes and welfare distort work incentives: static lifecycle and dynamic perspectives By Mike Brewer; Monica Costa Dias; Jonathan Shaw
  2. On Financing Retirement with an Aging Population By Ellen R. McGrattan; Edward C. Prescott
  3. The Importance of Being Marginal: Gender Differences in Generosity By Stefano DellaVigna; John A. List; Ulrike Malmendier; Gautam Rao
  4. Closing the Gap between the Retirement Age and the Normal Pensionable Age in Japan By Takayama, Noriyuki
  5. Food Insecurity Among Households With Working-Age Adults With Disabilities By Coleman-Jensen, Alisha; Nord, Mark
  6. Is Smoking Behavior Culturally Determined?: Evidence from British Immigrants By Rebekka Christopoulou; Dean R. Lillard
  7. Heterogeneity in time preference in older households By Antoine Bozio; Guy Laroque; Cormac O'Dea
  8. Early to Bed and Earlier to Rise: School, Maternal Employment, and Children’s Sleep By Jay Stewart
  9. Managing Pension and Healthcare Costs in Rapidly Ageing Depopulating Countries: The Case of Japan By Takayama, Noriyuki
  10. Men, Women, and Machines: How Trade Impacts Gender Inequality By Chinhui Juhn; Gergely Ujhelyi; Carolina Villegas-Sanchez
  11. Lifetime inequality and redistribution By Mike Brewer; Monica Costa Dias; Jonathan Shaw
  12. Revisions to Population, Migration and the Labour Force, 2007-2011 By Timoney Kevin
  13. Multi-profile intertemporal social choice: a survey By Bossert, Walter; Suzumura, Kotaro
  14. Signalling to whom? Conspicuous spending and the local density of the social group income distribution By Andreas Chai; Wolfhard Kaus
  15. Do Labor Market Networks Have An Important Spatial Dimension? By Judith K. Hellerstein; Mark J. Kutzbach; David Neumark
  16. It Pays to Set the Menu: Mutual Fund Investment Options in 401(k) Plans By Veronika K. Pool; Clemens Sialm; Irina Stefanescu
  17. Handicap à la nouveauté et seniors By Cecile Fonrouge; Fabienne Bornard
  18. Multidimensional Poverty in Colombia, 1997-2010 By Yadira, Diaz; Angulo, Roberto; Pardo, Renata

  1. By: Mike Brewer (Institute for Fiscal Studies and ISER, Essex University); Monica Costa Dias (Institute for Fiscal Studies and Institute for Fiscal Studies); Jonathan Shaw (Institute for Fiscal Studies)
    Abstract: Personal taxes and benefits affect the incentive to work over the lifecycle by altering income-age profiles, insuring against adverse shocks, and changing the returns to human capital. Previous work investigating the impact of taxes and benefits on work incentives has tended to ignore these dynamic considerations. In this paper, we use a dynamic model to show how a lifecycle perspective alters our impression of the effect of the tax and benefit system on female work incentives. We describe how work incentives change over the life and show how they depend on lifecycle circumstances. We also devise a forward-looking measure of work incentives that incorporates all the dynamic considerations likely to affect work decisions at any given age. We find that individuals experience considerable variability in work incentives across life that outweighs the variability across individuals. Changes pattern of family types across life is key to explaining these patterns: work incentives vary dramatically depending on family composition, and most women experience a number of different family types during the course of their lives. We also find that differences in family type are an important explanation for why static and forwardlooking PTRs diverge, though this is more to do with differences in how women in families with different compositions behave.
    Keywords: female labour supply, lifecycle, work incentives, taxes
    JEL: H24 I24 I38 J22
    Date: 2013–01
  2. By: Ellen R. McGrattan; Edward C. Prescott
    Abstract: A problem facing the United States is financing retirement consumption as its population ages. Policy analysts increasingly advocate savings-for-retirement systems, but are concerned with insufficient savings opportunities with limited government debt. This concern is unwarranted. First, there is more productive capital than commonly assumed in macroeconomic modeling. Second, if the policy reform subsumes the elimination of capital income taxes, then the value of business equity increases relative to the capital stock. Phasing in a switch from the current U.S. system to a savings-for-retirement system without capital income taxes increases welfare of all current and future cohorts.
    JEL: E20 G18 H21 H61
    Date: 2013–02
  3. By: Stefano DellaVigna; John A. List; Ulrike Malmendier; Gautam Rao
    Abstract: Do men and women have different social preferences? Previous findings are contradictory. We provide a potential explanation using evidence from a field experiment. In a door-to-door solicitation, men and women are equally generous, but women become less generous when it becomes easy to avoid the solicitor. Our structural estimates of the social preference parameters suggest an explanation: women are more likely to be on the margin of giving, partly because of a less dispersed distribution of altruism. We find similar results for the willingness to complete an unpaid survey: women are more likely to be on the margin of participation.
    JEL: C93 D64 H4
    Date: 2013–02
  4. By: Takayama, Noriyuki
    Date: 2013–01
  5. By: Coleman-Jensen, Alisha; Nord, Mark
    Abstract: Prior research has shown that food insecurity is more common among U.S households with an adult who has a work-limiting disability than among other households. To provide more detail on the prevalence of food insecurity by a range of types of disabilities, we analyzed data from the Current Population Survey Food Security Supplement (2009 and 2010). We focused on two groups of households that include adults with disabilities: (1) households with a working-age adult with a disability that prevented work (not in labor force-disabled); and (2) those with a working-age adult with a specified disability (hearing, vision, mental, physical, self-care, or going-outside-home disability) and no indication that their disability prevented them from working (other reported disabilities). Food insecurity was most prevalent among households with an adult who was not in labor force-disabled (33.5 percent), followed by those with a working-age adult with other reported disabilities (24.8 percent). Households with no working-age adult with a disability had a much lower prevalence of food insecurity (12.0 percent). Close to two in five households with very low food security included an adult with a disability. The study findings demonstrate the importance of disabilities as a determinant of food insecurity.
    Keywords: Disability, food security, food insecurity, Current Population Survey, Food Security Supplement, labor force, working-age adult, Consumer/Household Economics, Food Security and Poverty, Health Economics and Policy,
    Date: 2013–01
  6. By: Rebekka Christopoulou; Dean R. Lillard
    Abstract: We exploit migration patterns from the UK to Australia, South Africa, and the US to investigate whether a person's decision to smoke is determined by culture. For each country, we use retrospective data to describe individual smoking trajectories over the life-course. For the UK, we use these trajectories to measure culture by cohort and cohort-age, and more accurately relative to the extant literature. Our proxy predicts smoking participation of second-generation British immigrants but not that of non-British immigrants and natives. Researchers can apply our strategy to estimate culture effects on other outcomes when retrospective or longitudinal data are available.
    Keywords: Culture, Immigrant health, Smoking
    JEL: Z10 J15 I10
    Date: 2013
  7. By: Antoine Bozio (Institute for Fiscal Studies and a report); Guy Laroque (Institute for Fiscal Studies and University College London); Cormac O'Dea (Institute for Fiscal Studies)
    Abstract: This paper suggests a method for estimating the distribution of discount rates using panel data on income and wealth. Using the English Longitudinal Survey of Ageing (ELSA), a representative sample of the English popularion over age 50, we general panel date on total consumption from the intertemporal budget constraint. The distribution of consumption levels is shown to closely match that estimated using the UK's household budget survey. Consumption transitions over time are then used to estimate the discount rates of households. We show that there is substantial heterogeneity in discounting behaviour and find that, among this older population, households with less education or numerical ability exhibit greater patience than those with higher education or numerical ability. The direction of this association is the opposite to that which has been found in experimental investigations of time preference.
    Keywords: Time preference; Discount rate; Heterogeneity; Consumption
    JEL: D12 D31 D91 E21
    Date: 2013–01
  8. By: Jay Stewart (U.S. Bureau of Labor Statistics)
    Abstract: School-age children need 10-11 hours of sleep per night. It has been well-documented that lack of sleep leads to diminished cognitive performance and that people who sleep less are more likely to be overweight or obese. I use data from the American Time Use Survey (ATUS) to examine two factors that can potentially influence the amount of time children sleep: school and maternal employment. I find that school-age children sleep less when school is in session than during the summer, and that they get less sleep on school nights than on non-school nights. Children go to bed about 38 minutes earlier on school nights, but wake up about 72 minutes earlier on school days. This translates into about 34 minutes less sleep on school nights compared with non-school nights, and implies that these children have a cumulative sleep deficit of over two-and-a-half hours by the time they arrive at school Friday morning. In addition to the lost sleep time, the earlier wake-up times on school days appear to disrupt children’s natural sleep cycles. Maternal employment affects children’s sleep time in the summer, because children wake up earlier on days that their mothers work. But during the school year, maternal employment effects are dominated by school effects.
    Keywords: Sleep; school start times; maternal employment; time use;
    JEL: J22
    Date: 2013–01
  9. By: Takayama, Noriyuki
    Date: 2013–01
  10. By: Chinhui Juhn (University of Houston); Gergely Ujhelyi (University of Houston); Carolina Villegas-Sanchez (ESADE Universitat Ramon Llul)
    Abstract: This paper studies the effect of trade liberalization on an under-explored aspect of wage inequality - gender inequality. We consider a model where firms differ in their productivity and workers are differentiated by skill as well as gender. A reduction in tariffs induces more productive firms to modernize their technology and enter the export market. New technologies involve computerized production processes and lower the need for physically demanding skills. As a result, the relative wage and employment of women improves in blue-collar tasks, but not in white-collar tasks. We test our model using a panel of establishment level data from Mexico exploiting tariff reductions associated with the North American Free Trade Agreement (NAFTA). Consistent with our theory we find that tariff reductions caused new firms to enter the export market, update their technology and replace male blue-collar workers with female blue-collar workers.
    Keywords: trade, gender, inequality
    JEL: D3 F15 J16
    Date: 2013–01–22
  11. By: Mike Brewer (Institute for Fiscal Studies and ISER, Essex University); Monica Costa Dias (Institute for Fiscal Studies and Institute for Fiscal Studies); Jonathan Shaw (Institute for Fiscal Studies)
    Abstract: In this paper we look at lifetime inequality to address two main questions: How well does a modern tax system, based on annual information, target lifetime inequality? What aspects of the tranfser system are most progressive from a lifetime perspective? To answer to these questions it is crucial to relate lifetime and annual inequality and determine the main building blocks of lifetime disparities. We look at lifetime inequality and the redistribution properties of taxes and benefits using a dynamic life-cycle model of women's education, labour supply and savings with family dynamics and rich individual heterogeneity in preferences and productivity. The model is coupled with a detailed description of the UK personal tax and benefit system and is estimated on UK longitudinal data covering the 1990s and early 2000s. We show that the tax and benefits system is more redistributive from an annual than from a lifetime perspective, and it most progressive at the bottom of the income distribution in both cases. We then establish that heterogeneity in family experiences throughout adult life is the main vehicle through which the tax and benefits system moderates lifetime inequality. Although transitory, family conditions under which working is especially costly, such as lone-motherhood, are escpecially prevalent among the lifetime poor. By targeting this group, particularly using policies specifically designed to improve the work incentives of those with the lowest earnings capacity, the tax and benefits system does achieve life-cycle redistribution. Other policies like universal benefits towards family with children are less well targeted towards the lifetime poor but are more progressive and improve the work incentives in the middle 60% of the distribution of lifetime income.
    Keywords: female laboursupply, life-cycle, inequality, redistribution, taxes
    JEL: H23 H24 I24 I38 J22 J24
    Date: 2012–10
  12. By: Timoney Kevin
    Keywords: population/migration/qec
    Date: 2013–01
  13. By: Bossert, Walter; Suzumura, Kotaro
    Abstract: We provide a brief survey of some literature on intertemporal social choice theory in a multi-profile setting. As is well-known, Arrow’s impossibility result hinges on the assumption that the population is finite. For infinite populations, there exist nondictatorial social welfare functions satisfying Arrow’s axioms and they can be described by their corresponding collections of decisive coalitions. We review contributions that explore whether this possibility in the infinite-population context allows for a richer class of social welfare functions in an intergenerational model. Different notions of stationarity formulated for individual and for social preferences are examined.
    Keywords: Infinite-population social choice, multi-profile social choice, decisiveness, intergenerational choice
    JEL: D71
    Date: 2013–01
  14. By: Andreas Chai; Wolfhard Kaus
    Abstract: We empirically evaluate two competing explanations about how the dispersion of income within social groups affects household spending on visible goods. Using South African household expenditure data, we find evidence that precisely the reverse of the effect predicted by Charles et al. (2009) takes place in that rich households tend to reduce, rather than increase, spending on visible goods as the dispersion of social group income increases. Our results instead support rank-based models of status competition since the number of within-group peers who possess a similar income level is found to be positively correlated with household spending on visible goods. Moreover, we find that the effect of this 'local' density tends to be stronger in the tail regions of the distribution and performs better than other proxies for the overall income distribution used in recent studies. How the range of visible goods used to signal wealth expands as household income grows is also explored.
    Keywords: Conspicuous consumption, Signaling, Status, South Africa, Income distribution
    JEL: D12 D83 J15 O12
    Date: 2013–01–29
  15. By: Judith K. Hellerstein; Mark J. Kutzbach; David Neumark
    Abstract: We test for evidence of spatial, residence-based labor market networks. Turnover is lower for workers more connected to their neighbors generally and more connected to neighbors of the same race or ethnic group. Both results are consistent with networks producing better job matches, while the latter could also reflect preferences for working with neighbors of the same race or ethnicity. For earnings, we find a robust positive effect of the overall residence-based network measure, whereas we usually find a negative effect of the same-group measure, suggesting that the overall network measure reflects productivity-enhancing positive network effects, while the same-group measure may capture a non-wage amenity.
    JEL: J15 R23
    Date: 2013–02
  16. By: Veronika K. Pool; Clemens Sialm; Irina Stefanescu
    Abstract: This paper investigates whether mutual fund families acting as trustees of 401(k) plans display favoritism toward their own funds. Using a hand-collected dataset on retirement investment options, we show that poorly-performing funds are less likely to be removed from and more likely to be added to a 401(k) menu if they are affiliated with the plan trustee. We find no evidence that plan participants undo this affiliation bias through their investment choices. Finally, the subsequent performance of poorly-performing affiliated funds indicates that these trustee decisions are not information driven and are costly to retirement savers.
    JEL: G11 G23 H55
    Date: 2013–02
  17. By: Cecile Fonrouge (IRG - Institut de Recherche en Gestion - Université Paris XII - Paris Est Créteil Val-de-Marne : EA2354 - Université Paris-Est Marne-la-Vallée); Fabienne Bornard (CRE EM Lyon - EM)
    Abstract: L'âge est-il un atout lorsque l'on crée? Le senior entrepreneur est certes un entrepreneur comme les autres mais surmonte-t-il mieux que d'autres la nouveauté de l'organisation? La notion " d'handicap à la nouveauté " est utilisée pour comprendre le rôle de l'expérience de la vie organisationnelle dans deux cas de seniors entrepreneurs. Un cadre d'analyse est proposé qui montre comment l'expérience des activités support est un facteur d'adaptation et de légitimité. Il tient compte de l'action de variables contingentes comme la taille ou l'univers concurrentiel. Enfin des propositions adaptées au senior montrent, que mieux que d'autres, l'activation de réseaux, les routines précédentes et la moindre pression du temps permettent aux seniors de surmonter le handicap à la nouveauté.
    Keywords: senior;entrepreneur;handicap à la nouveauté;
    Date: 2012–10–01
  18. By: Yadira, Diaz; Angulo, Roberto; Pardo, Renata
    Abstract: This paper presents the Colombian Multidimensional Poverty Index (CMPI), an initiative of the National Planning Department based on the methodology of Alkire and Foster (2010). The proposed index for Colombia is composed of five dimensions: education of household members; childhood and youth conditions; health; employment; and access to household utilities and living conditions. A nested weighting structure was used, where each dimension is equally weighted, as is each indicator within each dimension. Analysis of the results demonstrates that multidimensional poverty in Colombia decreased between 1997 and 2010. Multidimensional poverty rates decreased in both urban and rural areas, but imbalances remain. As well as calculating the incidence of multidimensional poverty, we also calculate measures of the poverty gap and the severity of poverty. The reduction in severity is larger than the reduction in the gap, suggesting that the depth of poverty among the poorest has been reduced through targeting. In addition, this paper presents some public policy applications of the CMPI.
    Date: 2013–01–25

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