nep-age 2008-08-21 papers

on Economics of Ageing

Issue of 2008‒08‒21
two papers chosen by
Claudia Villosio
LABORatorio R. Revelli

Adjusting Government Policies for Age Inflation By John B. Shoven; Gopi Shah Goda
CARING FOR PARENTS AND EMPLOYMENT STATUS OF EUROPEAN MID-LIFE WOMEN By Laura Crespo

Adjusting Government Policies for Age Inflation

By:	John B. Shoven; Gopi Shah Goda
Abstract:	Government policies that are based on age do not adjust to the fact that a given age is associated with a higher remaining life expectancy and lower mortality risk relative to earlier time periods due to improvements in mortality. We examine four possible methods for adjusting the eligibility ages for Social Security, Medicare, and Individual Retirement Accounts to determine what eligibility ages would be today and in 2050 if adjustments for mortality improvement were taken into account. We find that historical adjustment of eligibility ages for age inflation would have increased ages of eligibility by approximately 0.15 years annually. Failure to adjust for mortality improvement implies the percent of the population eligible to receive full Social Security benefits and Medicare will increase substantially relative to the share eligible under a policy of age adjustment.
JEL:	H51 H55 J11 J14
Date:	2008–08
URL:	http://d.repec.org/n?u=RePEc:nbr:nberwo:14231&r=age

CARING FOR PARENTS AND EMPLOYMENT STATUS OF EUROPEAN MID-LIFE WOMEN

By:	Laura Crespo (CEMFI, Centro de Estudios Monetarios y Financieros)
Abstract:	In this paper we estimate the causal effect of providing “intensive” informal care to elderly parents on labour market participation decisions for European women who are themselves approaching retirement. In particular, we consider the frequency or intensity of this help and we focus on informal care provided in a daily or weekly basis. We use two different but comparable samples drawn from the Survey of Health, Ageing and Retirement in Europe (SHARE) that provide complementary detailed information about daughters and parents. We obtain evidence about this question for two groups of European countries that strongly differ in terms of informal caregiving intensity within the immediate family and the use of formal care: the northern countries (Sweden, Denmark and The Netherlands), and the southern countries (Spain, Italy and Greece). The results show that the estimated effect of providing “intensive” informal care to elderly parents on the probability of labour participation is negative and large for both groups of countries. Furthermore, a substantially stronger effect is found when the “intensive” caregiving variable is treated as endogenous in the labour participation equation. This shows that the potential opportunity costs in terms of (reduced) employment associated with the provision of informal care by women are seriously underestimated under the exogeneity assumption of the caregiving regressor.
Keywords:	Binary choice, labour force participation decisions, parental informal caregiving, endogenous variables, simultaneous estimation.
JEL:	J2 C3 D1
Date:	2006–12
URL:	http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2006_0615&r=age

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