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on Economics of Ageing |
| By: | Kayam, Saime S.; Parkın, Mehmet Koray; Çeliktopuz, Merih |
| Abstract: | Public pension system costs constitute a significant part of government expenses. Private pension systems have been developed as an alternative and/or as a complement to the public systems. In Turkey, the Private Pension System was given a head start in 2003. Although the system aims to provide supplementary income to the public pensions at retirement, observations reveal that many participants prefer to exit the system before retirement. The purpose of this study is to identify the characteristics of participants, who are more likely to exit earlier than retirement using the total population of contract buyers since the start of the system until 2011. The data is obtained from the Pension Monitor Center, and covers the customer and contract characteristics of more than 75% of all lapse types in the period. Impact of demographic factors and contract features are examined using the logit model. We divide the sample into different groups of customers according to their monthly contributions to the system. The results of econometric analysis reveal evidence of a significant relationship between exit decision and features such as education level,occupation, total accumulated savings, geographical regions, pension sales channel and payment instruments. Staying long enough in the system increases participants’continuity. Our elaborations also provide some tips for pension companies to ensure longevity and retirement of customers. |
| Keywords: | private pension system, exit decision, logit model, Turkey |
| JEL: | G23 J26 J32 |
| Date: | 2013–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50933&r=age |
| By: | Andreas Hubener; Raimond Maurer; Olivia S. Mitchell |
| Abstract: | Household decisions are profoundly shaped by a complex set of financial options due to Social Security rules determining retirement, spousal, and survivor benefits, along with benefit adjustments that vary with the age at which these are claimed. These rules influence optimal household asset allocation, insurance, and work decisions, given life cycle demographic shocks such as marriage, divorce, and children. Our model generates a wealth profile and a low and stable equity fraction consistent with empirical evidence. We also confirm predictions that wives will claim retirement benefits earlier than husbands, while life insurance is mainly purchased by younger men. Our policy simulations imply that eliminating survivor benefits would sharply reduce claiming differences by sex while dramatically increasing men’s life insurance purchases. |
| JEL: | D1 D13 G11 H55 J12 J22 J26 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19583&r=age |
| By: | FLEURBAEY, Marc (Princeton University); LEROUX, Marie-Louise (Départment des Sc. Economiques, ESG-Université du Québec à Montréal (UQAM), CIRPEE, Canada; Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium); PESTIEAU, Pierre (University of Liège; Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium; Paris School of Economics and CEPR); PONTHIERE, Grégory (Paris School of Economics and Ecole Normale Supérieure, Paris) |
| Abstract: | A premature death unexpectedly brings a life and a career to their end, leading to substantial welfare losses. We study the retirement decision in an economy with risky lifetime, and compare the laissez-faire with egalitarian social optima. We consider two social objectives: (1) the maximin on expected lifetime welfare (ex ante), allowing for a compensation for unequal life expectancies; (2) the maximin on realized lifetime welfare (ex post), allowing for a compensation for unequal lifetimes. The latter optimum involves, in general, decreasing lifetime consumption profiles, as well as raising the retirement age, unlike the ex ante egalitarian optimum. This result is robust to the introduction of unequal life expectancies and unequal productivities. Hence, the postponement of the retirement age can, quite surprisingly, be defended on egalitarian grounds - although the conclusion is reversed when mortality strikes only after retirement. |
| Keywords: | risky lifetime, mortality, labour supply, retirement, compensation |
| JEL: | I14 I18 J10 J22 |
| Date: | 2013–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2013049&r=age |
| By: | Clemens Sialm; Laura Starks; Hanjiang Zhang |
| Abstract: | Participants in defined contribution (DC) retirement plans rarely adjust their portfolio allocations, suggesting that their investment choices and consequent money flows are sticky and not discerning. Yet, the participants’ inertia could be offset by the DC plan sponsors, who adjust the plan’s investment options. We examine these countervailing influences on flows into U.S. mutual funds. We find that flows into funds that derive from DC assets are more volatile and exhibit more performance sensitivity than non-DC flows, primarily due to the adjustments of the investment options by the plan sponsors. Thus, DC retirement money is less sticky and more discerning. |
| JEL: | G02 G18 G23 G28 H55 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19569&r=age |
| By: | Jonathan Meer (Texas A&M University); Harvey S. Rosen (Princeton University) |
| Abstract: | A general finding in the empirical literature on charitable giving is that among older individuals, both the probability of giving and the conditional amount of donations decrease with age, ceteris paribus. In this paper, we use data on giving by alumni at an anonymous university to investigate end-of-life giving patterns. Our main finding is that taking into account the approach of death substantially changes the age-giving profile for the elderly—in one segment of the age distribution, the independent effect of an increase in age on giving actually changes from negative to positive. We examine how the decline in giving as death approaches varies with the length of time that a given condition is likely to bring about death, and the individual’s age when he died. We find that for individuals who died from conditions that bring about death fairly quickly, there is little decline in giving as death approaches compared to those who died from other causes. Further, the decline in giving as death approaches is steeper for the elderly (for whom death is less likely to be a surprise) than for the relatively young. These findings suggest that our primary result, that failing to take into account the approach of death leads to biased inferences with respect to the age-giving profile, is not merely an artifact of some kind of nonlinearity in the relationship between age and giving. |
| Keywords: | charitable giving, aging, financing of higher education, philanthropy, terror management theory |
| JEL: | D64 I23 J14 H41 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:236rosen&r=age |
| By: | Moreau, Nicolas (Université de la Réunion); Stancanelli, Elena G. F. (CNRS, Sorbonne Economics Research Center (CES)) |
| Abstract: | Earlier literature has investigated the drop in household consumption upon retirement of the head of the household, the so-called "retirement consumption puzzle". Here, we expand on these studies by considering also retirement of the wife, thus distinguishing households in which the wife is a "housewife" from 'dual-earners'. We use a regression discontinuity approach to estimate the effect of each partner's retirement on household consumption. We use for the analysis data drawn from the French Consumer Budget Survey 2001 that collected two-week expenditure diaries. We find a significant and sizable drop in food and clothes expenditure upon retirement of the male partner. However, the drop in food expenditure is not robust to specification checks and it becomes statistically insignificant when dropping from the sample couples in which the wife is a housewife. |
| Keywords: | consumption, ageing, retirement, regression discontinuity |
| JEL: | D12 J22 J14 C1 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7709&r=age |
| By: | DUJARDIN, Claire (Université catholique de Louvain, CORE, Belgium and Institut Wallon d’Evaluation, de Prospective et de Statistiques (IWEPS), Namur, Belgium); lorant, VINCENT (Université catholique de Louvain, Institute of Health and Society, Belgium); THOMAS, Isabelle (FRS-FNRS and Université catholique de Louvain, CORE, Belgium) |
| Abstract: | The built environment plays a key role in the strategy of “Aging in Place”. Here, we study the influence of the built environment on the health status of elderly people living in Brussels. Using census and geocoded data, we analysed if built environment factors were associated with poor self- assessed health status and functional limitations of elderly aged 65+. We concluded that the evidence of the built-environment hypothesis is weak and vulnerable to the composition of the neighborhood. |
| Keywords: | built urban environment, subjective health, elderly, GIS-based measures, logistic regressions, Brussels |
| JEL: | I10 I14 R23 |
| Date: | 2013–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2013048&r=age |
| By: | Fabio Pammolli (IMT Lucca Institute for Advanced Studies and CERM Foundation - Competitività, Regole, Mercati) |
| Abstract: | In most European countries, a rebalance of the excess of Pay-as-You-Go financing for pension and health expenditure is important, to reduce the current and expected future pressure on public finances. A debate should be promoted on how to achieve an optimal design, which combines PayGo and real accumulation plans. In general, a few priorities can be outlined for a new dialogue on the future of the European Social Market Economy: 1) Increase the technical quality of pension and health care expenditure projections incorporated in the annual Stability Programs of EU Partners, developing adequate sensitivity analysis around the central scenario through sound stochastic models (A stress test on fiscal sustainability of welfare systems); 2) Strengthen the link between medium-long term projections and the economic policy guidelines that EU Partners indicate at the end of the discussion session of Stability Programs; 3) Strengthen the link between the policy guidelines at European level and the annual budget of each Partner; 4) Promote a debate on the future of the European Social Market Economy, with a specific focus on the consequences of the status quo for States and individuals, as well as for economic growth and fiscal consolidation; 5) Promote a debate on how to achieve a balance between PayGo and capitalized funds to finance age related expenditures for pensions and health. Such an effort could contribute to set up a common ground to coordinate welfare systems among Member States, with positive effects on the mobility of labor and capital. |
| Keywords: | health expenditure, welfare, demography, sustainability, paygo |
| JEL: | H00 H30 H50 H51 H53 I00 I10 I18 I31 I38 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ern:wpaper:01-2013&r=age |
| By: | Angus Deaton (Princeton University and NBER); Arthur A. Stone (Stony Brook University) |
| Abstract: | Elderly Americans who live with people under age 18 have lower life evaluations than those who do not. They also experience worse emotional outcomes, including less happiness and enjoyment, and more stress, worry, and anger. In part, these negative outcomes come from selection into living with a child, especially selection on poor health, which is associated with worse outcomes irrespective of living conditions. Yet even with controls, the elderly who live with children do worse. This is in sharp contrast to younger adults who live with children, likely their own, whose life evaluation is no different in the presence of the child once background conditions are controlled for. Parents, like elders, have enhanced negative emotions in the presence of a child, but unlike elders, also have enhanced positive emotions. In parts of the world where fertility rates are higher, the elderly do not appear to have lower life evaluations when they live with children; such living arrangements are more usual, and the selection into them is less negative. They also share with younger adults the enhanced positive and negative emotions that come with children. The misery of the elderly living with children is one of the prices of the demographic transition. |
| Keywords: | elderly, grandparents, anger, life evaluation, children, parents |
| JEL: | D19 D63 J12 J14 J13 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:pri:rpdevs:grandpa_and_the_snapper_complete_version_2&r=age |
| By: | John B. Shoven; Sita Slavov |
| Abstract: | Most private sector workers with employer-provided health insurance have a strong incentive to continue working until Medicare eligibility in order to maintain group health coverage. However, most government employees have access to retiree health coverage, which allows them access to group health coverage even if they retire before Medicare eligibility. We study the impact of retiree health coverage on the probability of stopping work among public sector workers between the ages of 55 and 64. We find that, for state and local government employees, retiree health coverage raises the probability of stopping work by 5.1 percentage points (around 28 percent) between ages 60 and 64. However, we find no evidence that retiree health coverage influences state and local employees’ decisions to stop work at ages 55-59, or that such coverage has an effect on the probability of stopping work for federal and military employees. |
| JEL: | I1 J2 J3 J4 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19563&r=age |
| By: | Marcelo Medeiros; Pedro H. G. F. de Souza |
| Abstract: | O estudo examina um conjunto particular de determinantes institucionais da desigualdade: as políticas previdenciárias. A hipótese testada é a de que os benefícios que realmente contribuem para a concentração da Previdência no país – e, consequentemente, para a desigualdade – não são aqueles cujos valores estão situados entre os limites vigentes para o setor privado, mas sim os benefícios mais altos do setor público. A metodologia usada decompõe os fatores do coeficiente de Gini da distribuição de rendimentos familiares per capita observada na Pesquisa de Orçamentos Familiares (POF) 2008-2009. Conclui-se que o Estado reproduz desigualdades pré-existentes por meio de direitos previdenciários diferenciados para trabalhadores dos setores público e privado. A diferenciação de regras faz com que a previdência de valores mais altos, recebida por menos de 1% da população, contribua com 4% da desigualdade total. The study examines a particular set of institutional determinants of inequality, the public pensions. It tests the hypothesis that different rules regarding a maximum limit for the value of benefits in the pension subsystem of public and private sector workers makes the system as a whole regressive and contributes disproportionately to inequality in Brazil. Using a factor decomposition of the Gini coefficient of the distribution of family per capita income, as measured by POF 2008-2009 it concludes that the State reproduces pre-existing inequalities when it differentiates rules for public and private sector workers. Due to this differentiation of rules, the higher value pensions of less than 1% of the population contributes to 4% of total inequality. |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:1876&r=age |
| By: | Fiona Carmichael (Department of Management, Birmingham Business School, University of Birmingham); Claire Hulme (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds); Lorna Porcellato (Faculty of Health and Applied Social Sciences, Liverpool John Moores University) |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:lee:wpaper:1305&r=age |
| By: | Robert Clark; Melinda Morrill; David Vanderweide |
| Abstract: | To moderate the rate of growth of retiree health insurance costs, employers can modify plans and move retirees into less expensive plans. We examine policy modifications implemented by the North Carolina State Health Plan. We investigate whether incentives produce the desired plan elections and whether these changes, along with cost shifting, produce the expected reductions in cost growth. Using individual-level administrative data, along with aggregated data on expenditures for retirees, we estimate the effects of the introduction and subsequent repeal of a Comprehensive Wellness Initiative for non-Medicare eligible retirees, as well as increases in coinsurance and copayments and the introduction of a premium for all retirees. Over a third of non-Medicare retirees shifted into the least generous plan between June 2009 and December 2012. The level effects on annual costs and unfunded accrued liabilities were relatively modest, but growth rates were diminished. Increases in the retiree premiums reduced projected costs. |
| JEL: | H75 I13 J32 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19566&r=age |