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on Economics of Ageing |
| By: | Paula Prenzel; Simona Iammarino |
| Abstract: | Human capital investments are frequently suggested as policy measure to cope with smaller and older labour forces caused by demographic change across Europe. However, the availability and composition of human capital is fundamentally intertwined with demographic structures, especially at a regional level. This paper analyses how ageing is related to the regional composition of human capital for 332 German regions between 1996 and 2010. The findings show that labour force ageing is associated with lower educational attainment, and that older labour forces have higher shares of traditional vocational degrees. On a national level, education expansion still sufficiently compensates for the effects of population ageing, but regional human capital composition shows distinct trends. |
| Keywords: | demographic change, human capital, regional labour markets, regional development |
| JEL: | R10 R12 R23 J21 J24 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1832&r=age |
| By: | Dirk Broeders; Leo de Haan |
| Abstract: | Using regulatory data that are free of self-reporting bias for 2007-2016, we decompose investment returns of 455 Dutch pension funds according to their key investment decisions, i.e. asset allocation, market timing and security selection. In extension to existing papers, we also assess the impact of benchmark selection, i.e. the pension funds' choice for proprietary benchmarks instead of standard benchmarks. Over time, asset allocation explains 39 percent of the variation of pension funds' returns, whereas benchmark selection, timing and selection explain 11, 9 and 16 percent, respectively. Across pension funds, asset allocation explains on average only 19 percent of the variation in pension fund returns. This is dominated by benchmark selection explaining 33 percent of cross sectional returns. Over time and across pension funds we document that benchmark selection is more important in driving returns than selection and timing. |
| Keywords: | Pension funds; Asset allocation; Benchmark selection; Investment performance |
| JEL: | G11 G23 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:603&r=age |
| By: | Liu, Lihe |
| Abstract: | This paper uses the Chinese Longitudinal Healthy Longevity Survey 2005-2011 (CLHLS) to study factors that influence Chinese elders’ living arrangement preferences; whether they prefer co-residence with their children or not. The CLHLS contains elders’ preferred living arrangements as well as their personal and household information. The data shows that 67% of elders surveyed changed their preferences between 2005 and 2011. Elderly people who became widowed, those who gained pension coverage, and those who had increases in annual household income were more likely to change their preferred living arrangement to co-residence with their children. Specifically, for elderly people who have increases in their annual household income, those who cannot self-financed their living expenses have more desire to co-residence than those who can. While on the other hand, changes in elders’ residence locations, elders’ quality of life, optimism level and loneliness level do not have significant impact on elderly people’s preferences on living arrangements. This study focuses on elderly people’s preferences rather than their actual living arrangement but could have implication for developing policies to improve their living quality. |
| Keywords: | Consumer/Household Economics, Health Economics and Policy, Public Economics |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umapmt:274546&r=age |
| By: | Giovanni Gallo; Costanza Torricelli; Arthur van Soest |
| Abstract: | We use the Elaboration Likelihood Model (ELM) to explain how communication influences pension choices in a heterogeneous population. We exploit the 2007 Italian reform that allowed transferring future severance pay contributions into a pension fund and was accompanied by an information campaign with a clear message. According to ELM, individuals follow either a “central route” or a “peripheral route” depending on their motivation and ability to process, and eventually change or retain their initial attitude. Based on data from the Bank of Italy Survey on Household Income and Wealth, we find that not only financial literacy plays a relevant role in the employees’ elaboration process, but also the individual’s comprehension of the specific choice object, the personal relevance of the decision, cognitive skills, and contextual elements (e.g. unions, employer pressure). These considerations have policy implications for the effectiveness of information messages in the pension domain. |
| Keywords: | pension choices, Elaboration Likelihood Model, cognitive skills, contextual elements,financial literacy |
| JEL: | A12 C25 D03 D14 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:mod:wcefin:0062&r=age |
| By: | Geyer, Johannes (DIW Berlin); Haan, Peter (DIW Berlin); Hammerschmid, Anna (DIW Berlin); Peters, Michael (DIW Berlin) |
| Abstract: | We evaluate the labor market and distributional effects of an increase in the early retirement age (ERA) from 60 to 63 for women. We use a regression discontinuity design which exploits the immediate increase in the ERA between women born in 1951 and 1952. The analysis is based on the German micro census which includes about 370,000 households per year. We focus on heterogeneous labor market effects on the individual and on the household level and we study the distributional implications using net household income. In this respect we extend the previous literature which mainly studied employment effects on the individual level. Our results show sizable labor market effects which strongly differ by subgroups. We document larger employment effects for women who cannot rely on other income on the household level, e.g. women with a low income partner. The distributional analysis shows on average no significant effects on female or household income. This result holds as well for heterogeneous groups: Even for the most vulnerable groups, such as single women, women without higher education, or low partner income, we do not find significant reductions in income. One reason for this result is program substitution. |
| Keywords: | retirement age, pension reform, labor supply, early retirement, distributional effects, spillover effects, household |
| JEL: | J14 J18 J22 J26 H31 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11618&r=age |
| By: | Töpfer, Marina |
| Abstract: | Using Italian microdata over the period 2005-2016, this paper studies the difference in pay between elderly (55-64) and adult (34-54) workers in Italy along the wage distribution. The estimation strategy consists in using a three-way fixed effects wage model and adjusting the wage gap for (observed and unobserved) labor market heterogeneity. The estimation relies on OLS as well as on unconditional quantile regressions. The analysis beyond the mean shows substantial differences in the age pay gap along the wage distribution and finds particularly pronounced gaps at the top. The fixed effects of interest (individual, job and industry) are estimated via a partitioned procedure. Adjusting the gap for labor market heterogeneity reduces the gap almost to zero. The results suggest that individual differences between the cohorts both observed and unobserved are the main driver of the gap. |
| Keywords: | Age Pay Gap,Three-Way Fixed Effects Model,Decomposition,Italy |
| JEL: | J7 J14 J31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:faulre:105&r=age |
| By: | David E. Bloom; Mathew McKenna; Klaus Prettner |
| Abstract: | Globally, an estimated 734 million jobs will be required between 2010 and 2030 to accommodate recent and ongoing demographic shifts, account for plausible changes in labour force participation rates, and achieve target unemployment rates of at or below 4 percent for adults and at or below 8 percent for youth. The facts that i) most new jobs will be required in countries where “decent” jobs are less prevalent and ii) workers in many occupations are increasingly subject to risks of automation further compound the challenge of job creation, which is already quite sizable in historical perspective. Failure to create the jobs that are needed through 2030 would put currently operative social security systems under pressure and undermine efforts to guarantee the national social protection floors enshrined in the Sustainable Development Goals (SDGs). |
| JEL: | J1 J11 J2 J23 J89 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24835&r=age |
| By: | Tatyana Deryugina; David Molitor |
| Abstract: | We follow Medicare cohorts over time and space to estimate Hurricane Katrina's long-run mortality effects on elderly and disabled victims initially living in New Orleans. Inclusive of the initial shock, the hurricane improved survival eight years past the storm by 1.74 percentage points. Migration to lower-mortality regions explains most of this survival increase. Migrants to low- versus high-mortality regions look similar at baseline, but migrants’ subsequent mortality is 0.83-0.90 percentage points lower for each percentage-point reduction in local mortality, quantifying causal effects of place on mortality among this population. By contrast, migrants’ mortality is unrelated to local Medicare spending. |
| JEL: | H51 I10 Q54 R23 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24822&r=age |
| By: | Gensowski, Miriam (University of Copenhagen); Nielsen, Torben Heien (University of Copenhagen); Nielsen, Nete Munk (Statens Serum Institut); Rossin-Slater, Maya (Stanford University); Wüst, Miriam (Danish National Centre for Social Research (SFI)) |
| Abstract: | A large literature documents that childhood health shocks have lasting negative consequences for adult outcomes. This paper demonstrates that the adversity of childhood physical disability can be mediated by individuals' educational and occupational choices, which reflect their comparative advantage. We merge records on children hospitalized with poliomyelitis during the 1952 Danish epidemic to census and administrative data, and exploit quasi-random variation in paralysis incidence. While childhood disability increases the likelihood of early retirement and disability pension receipt at age 50, paralytic polio survivors obtain higher education and are more likely to work in white-collar and computer-demanding jobs than their non-paralytic counterparts. |
| Keywords: | childhood health shocks, occupational sorting, comparative advantage, long-term effects |
| JEL: | I14 J24 I24 I10 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11630&r=age |
| By: | Jody Schimmel Hyde; April Yanuyan Wu |
| Abstract: | In this brief, we document the post-denial employment and benefit experiences of older applicants who are initially denied Social Security Disability Insurance (SSDI) for “work capacity†reasons. |
| Keywords: | SSDI, disability, applicants, work, employment, application |
| JEL: | I J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:d40a8f5d6043434e96053c055842936e&r=age |
| By: | Roozbeh Hosseini (University of Georgia); Kai Zhao (University of Connecticut); Karen Kopecky (Federal Reserve Bank of Atlanta) |
| Abstract: | Recent studies have identified health dynamics and health shocks as major sources of risk over the life cycle. Health has implications for many economic variables includ- ing asset accumulation, labor supply, and income and wealth inequality. Despite the importance of health in economic studies, there is no unified objective measure of health status. In this paper we propose such a measure: frailty, defined as the cumulative sum of all adverse health indicators observed for an individual. There is overwhelming evidence in the gerontology literature that this simple measure is a strong predictor of mortality and other health outcomes. We construct a frailty index for individuals in the PSID, HRS and MEPS separately and make the following three observations. One, our constructed frailty index is remarkably consistent across the three datasets in terms of persistence, and dynamics of its distribution. This is in contrast to the most commonly used measure of health, self-reported health status. Two, individuals’ health decays at a substantially faster pace over the lifecycle when measured by frailty as opposed to self-reported health status. Three, health status is more persistent when measured by frailty as opposed to self reported health status. We estimate a dynamic process for frailty over the life cycle and show that an important driver of increasing inequality in health with age is dispersion in growth rates of frailty across individuals. Our frailty measure and dynamic process can be used by economists to study the evolution of health status over the life cycle and its implications. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:977&r=age |
| By: | Munyambonera, Ezra; Katunze, Miriam; Munu, Martin Luther; Sserunjogi, Brian |
| Abstract: | Uganda has to expand the coverage of the pension sector in order to deal with the rising numbers of retirees as well as the uneven coverage. The study investigates the nature of additional reforms required to expand pension coverage in the country. Specifically, the study focuses on governance and regulation, scope and coverage, efficiency, and competitiveness with specific reference to national social security, fiscal burden of the public pension scheme, and entry of new players in the pension space. The methodology used includes analysis of national household surveys and administrative data on public pension scheme, document reviews, key stakeholder interviews as well as reviews of other country case studies. Pension coverage is low at about 9.3 percent of total employed Ugandans in both the formal and informal sectors, but mainly in the formal sector. With regard to the non-contributory public pension scheme, the fiscal burden has reached an unsustainable level with cumulative arrears of about UGX 516 billion by 2016. At the same time, governance and regulation continue to affect the effectiveness and efficiency of the national pension system and warrants further reforms. |
| Keywords: | Financial Economics, Labor and Human Capital, Risk and Uncertainty |
| Date: | 2018–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eprcrs:275661&r=age |
| By: | Humberto Barreto (Department of Economics and Management, DePauw University) |
| Abstract: | This paper highlights and explains the effects of various demographic shocks to the Cuban economy, starting from the baby boom of the early 1960s and the collapse in fertility rates thereafter. The primary contribution is a freely available Excel workbook, PopPyrCuba.xlsm, that enables projections of population age distributions. For Cuba, the future looks bleak. Japan and other rich countries are finding that demographic forces are quite strong and cause serious economic harm. Without a developed market system, Cuba’s economy offers little protection from the coming storm. There are, of course, many challenges facing post-Castro Cuba, but demography may prove to be the most daunting of all. |
| Keywords: | fertility, death, population, simulation, Excel, growth, externality |
| JEL: | A10 J10 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:dew:wpaper:2018-01&r=age |