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on Economics of Ageing |
| By: | de Luna, Xavier (Dept. of Statistics, Umeå University); Stenberg, Anders (Swedish Institute for Social Research, Stockholm University); Westerlund, Olle (Dept. of Economics, Umeå University) |
| Abstract: | Several studies have suggested that education is associated with later retirement from the labour market. In this paper, we examine whether adult education, involving enrolees aged 42 or above, delays retirement to potentially increase labour force participation among the elderly. With Swedish register data of transcripts from adult education and annual earnings, which encompasses 1979-2004 and 1982-2004 respectively, we exploit the fact that adult education is a large-scale phenomenon in Sweden and construct a measure of the timing of the transition from being self-supported by productive work to being supported by pension transfers. We match samples of treated and controls on the propensity score and use non-parametric estimation of survival rates. The results indicate that adult education has no effect on the timing of the retirement from the labour force. This can be contrasted with the fact that adult education is one of the cornerstones of the OECD strategy for “active ageing” and the European Union’s “Lisbon strategy” for growth and jobs. |
| Keywords: | Human capital; Pensions; Elderly; Adult schooling |
| JEL: | H52 H55 H75 I28 J14 J26 |
| Date: | 2008–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2008_006&r=age |
| By: | Martin Hering |
| Abstract: | This article argues that an increase of the retirement age from 65 years to 67 or higher, which is the most unpopular pension reform measure, is politically feasible if the major parties build either a formal or an informal grand coalition. It argues further that institutional rules and agreed standards, especially the goals expressed in relation to pension policy, facilitate the formation of a grand coalition and increase the autonomy of governments vis-à-vis trade unions. Specifically, by restricting key policy instruments for responding to fiscal pressures, they lead political parties to consider the controversial option of raising the retirement age and to engage in a coordinative discourse about the necessity of this change and the limits of other reform options. This argument implies that the success of a retirement age reform does not depend on a negotiated agreement between a government and trade unions. By examining the agenda-setting and decisionmaking processes in Germany from the mid-1990s to 2007, this article shows that governments raise the retirement age only if they face constraints that rule out tax increases and benefit cuts and that they are able to enact even comprehensive retirement age reforms that increase not only the normal age but also the earliest eligibility age for both public and private pensions. |
| Keywords: | welfare state, pension politics, retirement age, policy paradigms, institutional constraints, blame avoidance |
| JEL: | D70 H53 H55 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:233&r=age |
| By: | de la CROIX, David (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE)) |
| Abstract: | We propose four arguments favoring the idea that medical effectiveness, adult longevity and height started to increase in Europe before the industrial revolution. This may have prompted households to increase their investment in human skills as a response to longer lives and initiated the transition from stagnation to growth. |
| Keywords: | life expectancy, height, industrial revolution, human capital, adult mortality. |
| JEL: | J11 I12 N30 I20 J24 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvco:2008048&r=age |
| By: | Hui Shan |
| Abstract: | The recent housing market boom in the U.S. has caused sharp increases in residential property taxes. Anecdotal evidence suggests that rising property taxes have induced elderly homeowners to increase their labor supply. This paper uses 1992-2004 panel data from the Health and Retirement Study (HRS) as well as a newly collected dataset on state-provided property tax relief programs to investigate the effect of property taxes on the labor supply of elderly homeowners. It is the first rigorous study on the link between property taxes and elderly labor supply. I examine both the extensive margin - whether elderly homeowners delay retirement or reenter the labor market in the face of rising property taxes, and the intensive margin - whether elderly homeowners work longer hours when property taxes increase. A simulated IV approach is used to address the potential endogeneity problem associated with property taxes. I find little evidence that property taxes have a significant impact on elderly homeowners' decisions to retire, to re-enter the labor force, or to increase working hours. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2008-51&r=age |
| By: | Dora L. Costa |
| Abstract: | I examine the effects of an unearned income transfer on the retirement rates and living arrangements of a very poor population by studying the effects of pensions on the decisions of black Union Army veterans. I find that blacks were 2 to 5 times as responsive as whites to income transfers in their retirement decisions and 6 to 8 times as responsive in their choice of independent living arrangements. I argue that blacks' greater poverty explains their responsiveness to pensions. My findings have implications for understanding racial differences in trends in retirement and independent living. I show that the retirement rates of both blacks and whites rose between 1900 and 1930 but that convergence in black and white rates and in living arrangements only occurred between 1930 and 1950. I argue that income effects from the institution of Social Security explain up to half of the convergence in black-white retirement rates and in living arrangements. |
| JEL: | J14 J26 N31 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14462&r=age |
| By: | Anita Tuladhar; Dennis P. J. Botman |
| Abstract: | The Czech Republic has embarked on an ambitious tax reform and expenditure package to bring the deficit sustainably below 3 percent, and intends to reduce the deficit to 1 percent of GDP by 2012. To address the long-term fiscal challenge due to population aging, pension reform proposals are also being considered. In this paper we assess the macroeconomic effects of these measures using the Global Fiscal Model. The tax reform package will achieve a more efficient tax system. If implemented successfully with the intended expenditure savings measures, debt is projected to improve markedly while output would expand. Fiscal sustainability will not be restored, however, even if further measures to bring the deficit to 1 percent of GDP by 2012. Instead, raising the retirement age and prefunding future aging costs would be needed to keep debt below 60 percent of GDP through 2050. |
| Keywords: | Czech Republic , Tax reforms , Fiscal policy , Budget deficits , Aging , Population , Pensions , Debt sustainability , |
| Date: | 2008–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:08/125&r=age |
| By: | Mette Christensen |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:0809&r=age |
| By: | Palmer, Edward |
| Abstract: | Far-reaching changes in the regulation of financial markets and the organization of public pensions in the 1980s and 1990s transformed the landscape for retirement products in Sweden. First, banking and insurance were extensively deregulated in the 1980s, while the securities markets experienced major expansion. Insurance received a large boost from the authorization of unit-linked products in the early 1990s. Second, the public pension system was reformed. Survivor benefits for widows were eliminated from the public pillar in the late 1980s, leading to a large increase in demand for term life insurance. The old defined benefit public pension system was replaced by a notional or nonfinancial defined contribution (NDC) scheme, while a funded defined contribution (FDC) component was also created in the public pillar. The four occupational pension funds that cover the majority of Swedish workers were also converted into FDC schemes. This paper reviews the implications of these changes for the Swedish annuity market. It discusses the regulation of payout options in Sweden, highlighting the compulsory use of life annuities in the public pillar and the preference for term annuities in the occupational funds. It examines the performance of providers of retirement products, including the PPM, and reviews the increasing focus on risk-based regulation and supervision. The paper also emphasizes Sweden's success in moving in the direction of increased funding and privatization of old age insurance, while maintaining its basic character as a highly developed welfare state. |
| Keywords: | ,Debt Markets,Emerging Markets,Pensions&Retirement Systems,Insurance Law |
| Date: | 2008–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4748&r=age |
| By: | Hui Shan |
| Abstract: | The recent housing market boom in the U.S. has caused sharp increases in residential property taxes. Housing-rich but income-poor elderly homeowners often complain about rising tax burdens, and anecdotal evidence suggests that some move to reduce their tax burden. There has been little systematic analysis, however, of the link between property tax levels and the mobility rate of elderly homeowners. This paper investigates this link using household-level panel data from the Health and Retirement Study (HRS) and a newly collected dataset on state-provided property tax relief programs. These relief programs generate variation in effective property tax burdens that is not due solely to arguably endogenous local community choices about taxes and expenditure programs. The findings provide evidence suggesting that higher property taxes raise mobility among elderly homeowners. The point estimates from instrumental variable estimation using relief programs to generate instruments suggest that a $100 increase in annual property taxes is associated with a 0.76 percentage point increase in the two-year mobility rate for homeowners over the age of 50. This is an eight percent increase from the baseline two-year mobility rate of nine percent. These results are robust to alternative specifications. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2008-50&r=age |
| By: | Brunner, Gregory Gordon; Thorburn, Craig |
| Abstract: | Australia introduced a mandatory retirement savings scheme in 1992. This built on pre-existing voluntary occupational plans. The new scheme has been very successful in expanding coverage and mobilizing large financial savings that are equal to close to 100 percent of GDP. However, Australia does not impose restrictions on payout options. The payout phase used to be dominated by lump sum withdrawals, which accounted for 80 percent of benefit payments as recently as 2002. But pension payments increased in recent years and now represent 45 percent of total payments. The vast majority of these pension payments take the form of term annuities and allocated annuities. The latter are similar to phased withdrawals in Chile but run for fixed terms of up to 25 years rather than for lifetime terms. The demand for life annuities and lifetime phased withdrawals is very limited. The paper discusses the factors that have shaped the pattern of demand for retirement products, including the availability of the universal age pension and the effect of clawback provisions, the impact of the high level of home ownership, and the widespread preference of retiring workers for reliance on self-annuitization. The paper also reviews the prudential regulation of superannuation funds and life insurance companies. |
| Keywords: | ,Debt Markets,Emerging Markets,Pensions&Retirement Systems,Economic Theory&Research |
| Date: | 2008–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4749&r=age |
| By: | Matthias Weiss (Mannheim Research Institute for the Economics of Aging (MEA)) |
| Abstract: | In this paper, I analyse the relation between workers’ sick leave and the composition of their work teams with respect to age, job tenure, education, and nationality. The probability of sick leave of workers in work teams is shown to be lower if their teammates are older, have shorter job tenure, are less educated, female and of same nationality. In particular, the difference between a worker’s age and the average age of her teammates explains a large part of the well-known positive correlation between age and sick days. In fact, for workers older than 44 years, individual age does not have any significant effect on sick days if the difference between individual age and average team age is held constant. This age difference can be controlled by the management. If older workers have more sick days only if they work in teams with younger workers, it might optimal to form age-homogeneous work teams. |
| JEL: | J14 I10 M54 |
| Date: | 2008–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:mea:meawpa:07149&r=age |