nep-dem New Economics Papers
on Demographic Economics
Issue of 2020‒02‒17
ten papers chosen by
Héctor Pifarré i Arolas
Universitat Pompeu Fabra

  1. Gender and Family : Conceptual Overview By Barr,Nicholas
  2. Child Penalties and Financial Incentives: Exploiting Variation along the Wage Distribution By P. PORA; L. WILNER
  3. Child Care Markets, Parental Labor Supply, and Child Development By Berlinski, Samuel; Ferreyra, Maria Marta; Flabbi, Luca; Martin, Juan David
  4. Paid parental leave and maternal reemployment: Do part-time subsidies help or harm? By Zimmert, Franziska; Zimmert, Michael
  5. Intimate Partner Violence : The Influence of Job Opportunities for Men and Women By Bhalotra,Sonia R.; Kambhampati,Uma; Rawlings,Samantha; Siddique,Zahra
  6. The Impact of Lifetime Events on Pensions : NDC Schemes in Poland, Italy, and Sweden and the Point Scheme in Germany By Ch?on-Dominczak,Agnieszka; Góra,Marek; Kotowska,Irena E.; Magda,Iga; Ruzik-Sierdzinska,Anna; Strzelecki,Pawe?
  7. Demography and Provisions for Retirement: The Pension Composition, a Behavioral Approach By van Praag, Bernard M. S.; Hop, J. Peter
  8. Measuring Racial/Ethnic Retirement Wealth Inequality By Wenliang Hou; Geoffrey T. Sanzenbacher
  9. NDC Schemes and Heterogeneity in Longevity : Proposals for Redesign By Holzmann,Robert; Alonso-García,Jennifer; Labit-Hardy,Heloise; Villegas,Andrés M.
  10. Rising longevity, increasing the retirement age, and the consequences for knowledge-based long-run growth By Kuhn, Michael; Prettner, Klaus

  1. By: Barr,Nicholas
    Abstract: This paper starts from the fact that women receive lower pensions than men on average, and considers policies to address that fact. Women typically have lower wages than men, a greater likelihood of part-time work and more career breaks, and thus generally a less complete contribution record. In addition, pension age may be lower for women and annuities may be priced using separate life tables for women. The paper looks at three strategic ameliorative policy directions: policies intended to increase the size and duration of women?s earnings and hence improve their contribution records; policies to redirect resources within the pension system, including for survivors and after divorce; and ways of boosting women?s pensions with resources from outside the pension system.
    Keywords: Pensions&Retirement Systems,Population&Development,Gender and Development,Inequality,Labor Markets,Rural Labor Markets
    Date: 2019–04–01
  2. By: P. PORA (Insee - Crest); L. WILNER (Insee - Crest)
    Abstract: We relate women's labor earnings losses due to motherhood to their pre-childbirth rank in the distribution of hourly wages. Using French administrative data from 2005 to 2015, we show these "child penalties" to decrease steeply along the distribution; by contrast, related hourly wage losses are pretty homogeneous. Low-wage mothers opt out or decrease their working hours more frequently; the magnitude of such responses is completely monotone along the distribution. This empirical evidence highlights the relevance of financial incentives and suggests that child penalties arise from decisions based on the gains of specialization, rather than on gender differences in preferences or on gender norms.
    Keywords: Gender pay gap; child penalties; labor supply; difference-in-difference; wage distribution.
    JEL: J13 J16 J22 J31
    Date: 2019
  3. By: Berlinski, Samuel (Inter-American Development Bank); Ferreyra, Maria Marta (World Bank); Flabbi, Luca (University of North Carolina, Chapel Hill); Martin, Juan David (World Bank)
    Abstract: We develop and estimate a model of child care markets that endogenizes both demand and supply. On the demand side, families with a child make consumption, labor supply, and child-care decisions within a static, unitary household model. On the supply side, child care providers make entry, price, and quality decisions under monopolistic competition. Child development is a function of the time spent with each parent and at the child care center; these inputs vary in their impact. We estimate the structural parameters of the model using the 2003 Early Childhood Longitudinal Study, which contains information on parental employment and wages, child care choices, child development, and center quality. We use our estimates to evaluate the impact of several policies, including vouchers, cash transfers, quality regulations, and public provision. Among these, a combination of quality regulation and vouchers for working families leads to the greatest gains in average child development and to a large expansion in child care use and female labor supply, all at a relatively low fiscal cost.
    Keywords: child care markets, child care quality, early childhood development, female labor supply
    JEL: J13 J22 L1
    Date: 2020–01
  4. By: Zimmert, Franziska; Zimmert, Michael
    Abstract: Employment subsidies can incentivize mothers to shorten employment interruptions after childbirth. We examine a German parental leave reform promoting an early return to work in part-time. Exploiting the exogenous variation in the benefit entitlement length defined by the child’s birthday, we apply machine-learning augmented semi-parametric difference-indifference estimation using administrative data. The reform yields positive average employment effects mainly driven by part-time employment as our dynamic optimization model for mothers on parental leave suggests. Conditional effects show that the policy creates heterogenous incentives depending on the opportunity costs of working part-time.
    Keywords: Causal machine learning, effect heterogeneity, maternal labor supply, parental leave, Germany
    JEL: J21 J22 C14
    Date: 2020–01
  5. By: Bhalotra,Sonia R.; Kambhampati,Uma; Rawlings,Samantha; Siddique,Zahra
    Abstract: This study examines the association of unemployment variation with intimate partner violence using representative data from thirty-one developing countries, through 2005 to 2016. It finds that a 1 percent increase in the male unemployment rate is associated with an increase in the incidence of physical violence against women by 0.50 percentage points, or 2.75 percent. This is consistent with financial and psychological stress generated by unemployment. Female unemployment rates have the opposite effect, a 1 percent decrease being associated with an increase in the probability of victimization of 0.52 percentage points, or 2.87 percent. That an improvement in women's employment opportunities is associated with increased violence is consistent with male backlash. The study finds that this pattern of behaviours emerges entirely from countries in which women have more limited access to divorce than men.
    Date: 2020–01–22
  6. By: Ch?on-Dominczak,Agnieszka; Góra,Marek; Kotowska,Irena E.; Magda,Iga; Ruzik-Sierdzinska,Anna; Strzelecki,Pawe?
    Abstract: The paper focuses on the interrupted careers in four countries where pensions are based on lifetime labor income, but they have different labor market patterns. High levels of employment in Germany and Sweden are in contrast with low levels of employment, particularly for women, in Italy and Poland. Career interruptions of women in Italy mean early withdrawal from the labor market, while in Sweden women choose part-time employment. Lower employment rates and gender pay gaps are important causes of differences in expected pension levels. The pension system design and demographics are also different. Prolonging working lives and reducing gender gaps in employment and pay, particularly for those at risk of interrupted careers, is key to ensure decent old-age pensions
    Keywords: Gender and Development,Rural Labor Markets,Labor Markets,Employment and Unemployment,Inequality
    Date: 2019–04–01
  7. By: van Praag, Bernard M. S. (University of Amsterdam); Hop, J. Peter (University of Amsterdam)
    Abstract: Pensions may be provided for in a modern society by a mix of several methods, namely by voluntary individual savings, mandatory fully-funded occupational pension systems, mandatory social security financed by pay-as-you-go, and old-fashioned hoarding in cash. Here, we call the specific mixture of the four systems the pension composition. We assume that individual workers decide on their own individual savings, that the fully-funded occupational system is decided upon by the age cohort of the median worker (MW), and that the social security is decided upon by the median voter (MV). In this behavioral approach we distinguish between several social groups, where individuals belong to several groups simultaneously and where the interests of the different groups are only partly coinciding. For a given demography and interest rate, the joint result of the decisions of the different age cohorts is a Pareto equilibrium. For ease of exposition we assume that individual and collective pension savings are the only sources of capital supply. When capital supply equals demand from industry there is equilibrium in the capital market with a corresponding equilibrium interest rate. In this paper we assume a demography with one hundred age brackets and we investigate how changes in the birth rates, survival rates, and the retirement age affect the pension composition and the capital market equilibrium. Our conclusion is that the demographic effects are considerable not only for the resulting pension composition but also for macro-economic variables such as the wage rate, the interest rate, and the capital-income ratio. It follows that the pension composition in general and social security in particular is determined by the demography and cannot be modified at will as a long-term political instrument. We find that this is relevant for the present century, where birth and mortality rates in most western countries are steeply declining.
    Keywords: demography, funded pensions, unfunded pensions, social security, interest rate, overlapping generations, individual savings
    JEL: H55 H75 J1 J26
    Date: 2020–01
  8. By: Wenliang Hou; Geoffrey T. Sanzenbacher
    Abstract: As the U.S. population becomes more diverse, it will be increasingly important for policymakers addressing Social Security’s solvency to understand how reliant various racial and ethnic groups will be on the program versus other sources of retirement wealth. Yet, to date, studies on retirement wealth have tended not to focus on race and ethnicity, have largely ignored the role of Social Security, or have excluded the most recent cohort approaching retirement – the Late Boomers. This project uses data from the Health and Retirement Study (HRS) to document the retirement resources of white, black, and Hispanic households at various points in the wealth distribution for five HRS cohorts of 51-56 year olds between 1992 and 2016.
    Date: 2020–01
  9. By: Holzmann,Robert; Alonso-García,Jennifer; Labit-Hardy,Heloise; Villegas,Andrés M.
    Abstract: A positive relationship between lifetime income and life expectancy leads to a redistribution mechanism when the average cohort life expectancy is applied for annuity calculation. Such a distortion puts into doubt the main features of the NDC (nonfinancial defined contribution) scheme and calls for alternative designs to compensate for the heterogeneity. This paper explores five key mechanisms of compensation: individualized annuities; individualized contribution rates; a two-tier contribution structure with socialized and individual rates; and two supplementary two-tier approaches to deal with the income distribution tails. Using unique American and British data, the analysis indicates that both individualized annuities and two-tier contribution schemes are feasible and effective and thus promising policy options. A de-pooling by gender will be required, however.
    Keywords: Gender and Development,Pensions&Retirement Systems,Law and Justice Institutions,Population&Development
    Date: 2019–04–01
  10. By: Kuhn, Michael; Prettner, Klaus
    Abstract: We assess the long-run growth effects of rising longevity and increasing the retirement age when growth is driven by purposeful research and development. In contrast to economies in which growth depends on learning-by-doing spillovers, raising the retirement age fosters economic growth. How economic growth changes in response to rising life expectancy depends on the retirement response. Employing numerical analysis we find that the requirement for experiencing a growth stimulus from rising longevity is fulfilled for the United States, nearly met for the average OECD economy, but missed by the EU and by Japan.
    Keywords: Demographic Change,Rising Life Expectancy,Pension Reforms,Long-Run Economic Growth,R&D,Innovation
    JEL: J10 J26 O30 O41
    Date: 2020

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