nep-dem New Economics Papers
on Demographic Economics
Issue of 2022‒04‒18
nine papers chosen by
Héctor Pifarré i Arolas
Universitat Pompeu Fabra

  1. Does Cutting Child Benefits Reduce Fertility in Larger Families? Evidence from the UK’s Two-Child Limit By Reader, Mary; Portes, Jonathan; Patrick, Ruth
  2. Confidential and legal access to abortion and contraception in the United States, 1960-2020 By Myers, Caitlin Knowles
  3. Inequalities in retirement lifespan in the United States By Jiaxin Shi; Christian Dudel; Christiaan Monden; Alyson A. van Raalte
  4. Intergenerational consequences of pension reforms: Tension between democracy and equality By Baurin, Arno; Hindriks, Jean
  5. Pension reform and wealth inequality: evidence from Denmark By Andersen, Torben M.; Bhattacharya, Joydeep; Grodecka-Messi, Anna; Mann, Katja
  6. The Longer-term Impact of Coinsurance for the Elderly - Evidence from High-access Case - By Norihiro Komura; Shun-ichiro Bessho
  7. Human Capital Formation: The Importance of Endogenous Longevity By Titus Galama; Hans van Kippersluis
  8. The Effects of High-Skilled Immigration Policy on Firms: Evidence from Visa Lotteries By Doran, Kirk; Gelber, Alexander; Isen, Adam
  9. Do economists replicate? By Fiala, Nathan; Neubauer, Florian; Peters, Jörg

  1. By: Reader, Mary (London School of Economics); Portes, Jonathan (King's College London); Patrick, Ruth (University of York)
    Abstract: We study the impact of restricting child-related social assistance to the first two children in the family on the fertility of third and subsequent births. As of April 2017, all third and subsequent born children to low-income families in the UK did not receive means-tested child benefits, amounting to a reduction in income relative to the previous system of approximately 3000 GBP a year per child. We use administrative births microdata and household survey data to estimate the impact of the two-child limit on higher-order births with a triple differences approach, exploiting variation over date of birth, socio-economic status, and birth order. We find some evidence that the policy led to a small decline in higher-order fertility among lowincome families. However, compared to earlier research in the UK and elsewhere, largely based on benefit increases, the impact is small. This may be due to informational barriers or to other economic and social constraints affecting low income families. Our results imply that the main impact of cuts to child benefits is not to reduce fertility but to withdraw income from low-income families, with potential implications for child poverty.
    Keywords: fertility, family size, social assistance, welfare reform
    JEL: J13 J18 H31 H53
    Date: 2022–04
  2. By: Myers, Caitlin Knowles
    Abstract: An expansive empirical literature estimates the causal effects of policies governing young women's confidential and legal access to contraception and abortion. I present a new review of changes in the historical policy environment in the United States that serve as the foundation of this work. I consult primary sources including annotated statutes, judicial rulings, attorney general opinions, and advisory articles in medical journals, as well as secondary sources including newspaper articles and snapshots of various policy environments prepared by scholars, advocates, and government organizations. Based on this review, I provide a suggested coding of the policy environment over the past 60 years. I also present and compare the legal coding schemes used in the empirical literature and where possible I resolve numerous and substantial discrepancies.
    Keywords: Contraception,abortion,policy
    JEL: J13 J18
    Date: 2022
  3. By: Jiaxin Shi (Max Planck Institute for Demographic Research, Rostock, Germany); Christian Dudel (Max Planck Institute for Demographic Research, Rostock, Germany); Christiaan Monden; Alyson A. van Raalte (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Objectives Persistent and substantial disparities in old-age mortality suggest that there may be great inequalities in the length of retirement life. This study aims to assess gender and educational differences in the average retirement lifespan and the variation in retirement lifespan, taking into account individual labor-force exit and re-entry dynamics. Methods We used longitudinal data from the Health and Retirement Study in 1996–2016, focusing on respondents aged 50 and above (N = 32,228). Multistate life tables were estimated using discrete-time event history models. The average retirement lifespan, as well as absolute and relative inequalities in retirement lifespan, were calculated analytically. Results We found that among women there was a persistent educational gradient in average retirement lifespan over the whole period studied; among men, the relationship between education and retirement expectancy was different across periods. Women and the lower-educated had higher absolute inequality in retirement lifespan than men and the higher-educated—yet these relationships were reversed when examined by relative inequality. Discussion Our multistate approach provides an accurate and comprehensive picture of the retirement lifespan of older Americans in the past two decades. Such findings should be considered in high-level discussions on Social Security. Potential reforms such as raising the eligibility age or cutting benefits may have unexpected implications for different social groups due to their differential impacts on retirement initiation and re-entry dynamics.
    Keywords: USA, age at retirement, inequality, life expectancy, mortality, multi-state life tables, retirement
    JEL: J1 Z0
    Date: 2022
  4. By: Baurin, Arno (Université catholique de Louvain, LIDAM/IRES, Belgium); Hindriks, Jean (Université catholique de Louvain, LIDAM/CORE, Belgium)
    Abstract: Pension reforms, required to address the financial challenge of an ageing population, involve changing the accrual rate or the indexation rates. The accrual rate is the rate at which pension benefit is built up for each year of work. The indexation rate is the rate at which pension benefit is tied to the nominal wage growth. In this paper, we study the prospective consequences of indexation and accrual reforms and show the existence of a tension between democracy and equality. Simulating the effects of long-term budget balancing reforms, we show that 80% of the population prefers accrual over indexation reforms, with the implication that the youngest half of the population would bear 85% of the total adjustment cost. Then, we consider alternative pension reforms improving the generational balance (including policy mix and contribution reforms), and we show that all those reforms fail to get majority support. Finally we show that even though indexation reform is preferable in terms of work incentives, that does not change vote incentives. So, the tension is also between democracy and efficiency.
    Keywords: Pension reform ; Ageing ; Generational balance ; Prospective incidence ; Indexation ; Fiscal balance
    JEL: D63 D64 H55 I38
    Date: 2022–02–11
  5. By: Andersen, Torben M. (University of Aarhus); Bhattacharya, Joydeep (Iowa State University); Grodecka-Messi, Anna (Research Department, Central Bank of Sweden); Mann, Katja (Copenhagen Business School)
    Abstract: A growing literature explores reasons for rising wealth inequality, but disregards the role of pension systems despite their well-understood influence on life-cycle saving. In theory and according to available evidence, both pay-as-you-go (PAYG) and fully-funded (FF) pension schemes crowd out voluntary retirement saving. They differ because aggregate savings decrease in the former but increase under the latter system. Unlike most nations, Denmark has seen a decline in wealth inequality in recent decades. This paper studies a calibrated life-cycle model of Denmark and employs unique registry data to argue that a Danish pension system transition, from a mostly PAYG to a dominant, mandated FF scheme, explains much of this decline.
    Keywords: Wealth inequality; pension systems; crowding out; life-cycle savings
    JEL: D31 E01 E21 G51 H55 J32
    Date: 2022–02–01
  6. By: Norihiro Komura (Institute of Economic Research, Kyoto University); Shun-ichiro Bessho (Faculty of Economics, University of Tokyo)
    Abstract: We estimate the longer-term impact of coinsurance for the elderly by RDD using administrative data, focusing on the increase in coinsurance in Japan, from 10% to 20%, for those aged 70-74, born after April 1944. The reduction of utilization in the longer term is similar to, or slightly larger than, in the short term. Patients reduce potentially wasteful care more; we do not find discernible impacts on health outcome and health-related behaviors. For the moderate change of prices for the elderly, distinctive characteristics associated with medical services, like behavioral hazard and ex-ante moral hazard, seem not largely affect consumer responsiveness.
    Keywords: Fiscal
    JEL: I11 I12 I13 I18 J14
    Date: 2022–02
  7. By: Titus Galama (University of Southern California); Hans van Kippersluis (Erasmus University Rotterdam)
    Abstract: We present a theory of human capital, with its two most essential components, health capital and, what we term, skill capital, endogenously determined within the model. Using the theory, and a calibrated version of it, we uncover and highlight an important economic mechanism driving human-capital formation, socio-economic and health disparities, human-capital based economic growth, and causal relations among the stocks of wealth, skill and health, namely whether individuals can influence their own length of life (endogenous longevity). Without the ability of individuals to influence their longevity, the effects of health, skill and wealth on later-life skill and health are muted. Any additional health, skill or wealth is not used for additional investment, but essentially consumed. These findings have important implications for the modeling of, and our understanding of, human-capital formation, disparities in human capital and health, and human-capital based economic growth.
    Keywords: health investment, education, human capital, health capital, dynamic optimal control, longevity
    JEL: J24 I12 J00
    Date: 2022–03–24
  8. By: Doran, Kirk (University of Notre Dame); Gelber, Alexander (University of Pennsylvania); Isen, Adam (U.S. Department of the Treasury)
    Abstract: We compare winning and losing firms in lotteries for H-1B visas, matching administrative data on these lotteries to administrative tax data on U.S. firms and to approved U.S. patents. Winning one additional H-1B visa crowds out about 1.5 other workers at the firm. Additional H-1Bs have insignificant and at most modest effects on firm innovation. More general evidence from the universe of U.S. firms and the universe of H-1B visas using alternative estimation strategies is consistent with these results. Firms that hire H-1Bs grow faster and innovate more because they are different in other ways from firms that do not.
    Keywords: immigration, highly skilled workforce, innovation, employment
    JEL: J00 J08 J15 J23 J24 J48
    Date: 2022–03
  9. By: Fiala, Nathan; Neubauer, Florian; Peters, Jörg
    Abstract: Reanalyses of empirical studies and replications in new contexts are important for scientific progress. Journals in economics increasingly require authors to provide data and code alongside published papers, but how much does the economics profession indeed replicate? This paper summarizes existing replication definitions and reviews how much economists replicate other scholars' work. We argue that in order to counter incentive problems potentially leading to a replication crisis, replications in the spirit of Merton's 'organized skepticism' are needed - what we call 'policing replications'. We review leading economics journals to show that policing replications are rare and conclude that more incentives to replicate are needed to reap the fruits of rising transparency standards.
    Keywords: Replication,research transparency,generalizability
    JEL: A11 C18
    Date: 2022

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