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on Economics of Ageing |
| By: | Frimmel, Wolfgang; Pruckner, Gerald |
| Abstract: | Pension systems and their reforms are often discussed in the context of financial viability. These debates grow in intensity with the aging of the population in industrialized countries. However, an increase in retirement age may create unintended side effects for retirees' health or healthcare costs. This paper empirically analyzes the effect of (early) retirement on individual inpatient and outpatient healthcare expenditure in Austria. We use comprehensive labor market and retirement data from the Austrian Social Security Database combined with detailed information about individual inpatient and outpatient healthcare service utilization for the province of Upper Austria. To account for the endogeneity in retirement decisions, we exploit exogenous variation in the early retirement age induced by two Austrian pension reforms in 2000 and 2003. We find significant negative effects of retirement on healthcare expenditure. For both sexes, retirement decreases subsequent expenditure for outpatient medical attendance and hospitalization. Analyses of disaggregated components of healthcare expenditure confirm a positive health effect caused by physical and emotional relief after retirement. Apart from direct health effects, the results also reveal behavioral changes in the utilization of healthcare services. These changes in health behavior seem in particular relevant for blue collar workers. |
| Keywords: | retirement,healthcare expenditure,health behavior,instrumental variable |
| JEL: | I11 I12 J26 H51 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc18:181546&r=age |
| By: | Marianne Tenand (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Individuals having difficulties to perform the activities of daily living may benefit from public long-term care (LTC) support. France distinguishes between handicap benefits, accessible to individuals below 60, and dependence schemes, for individuals aged 60 and older. This paper assesses the effects of the age 60 threshold in the French LTC policies using the French Health and Disability Survey (HS 2008{2009) in two ways. First, we estimate the effect of being 60 and older on the probability to receive non-medical formal care and informal home care, controlling for a rich set of socio-demographic characteristics and age effects. Being a \dependent elderly" rather than a \handicapped adult" little affects the probability to receive home care; however, it increases formal care utilization and, to a lesser extent, decreases the probability to receive informal care. Second, we implement a Regression Discontinuity (RD) approach and provide evidence that the institutional age threshold affects living arrangements, as individuals above age 60 are more likely to be recorded as living in an institution. The architecture of LTC policies affects the way individuals' day-to-day difficulties are being compensated, thereby undermining horizontal equity in the use of formal LTC. |
| Keywords: | Long-term care,home care,public policies,regression discontinuity design,probit |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01889452&r=age |
| By: | Joachim Merz |
| Abstract: | Quality of life and satisfaction with life are of particular importance for individuals as well as for society concerning the “demographic change” with now longer retirement periods. This study will contribute to the life satisfaction discussion and quantifies life satisfaction and pattern of explanation before and after such a prominent life cycle event, the entrance into retirement. In particular, with the individual longitudinal data and 33 waves of the Socio-Economic Panel (SOEP) and the appropriate microeconometric causal fixed effects robust panel methods we ask and quantify if actual life satisfaction indeed is decreasing before retirement, is increasing at the entrance into retirement, and is decreasing then after certain periods back to a fore-going level. Thus, we ask if such an anticipation and adaptation pattern– as known from other prominent events – is also to discover for life satisfaction before and after retirement in Germany. Main result: Individual and family situation lift life satisfaction after retirement for many years, the (former) occupational situation, however, absorbs this effect both for pensioners and civil service pensioners. It remains only one period of improvement with close anticipation and adaptation at entering retirement but no furthermore significant change compared to pre-retirement life satisfaction. This holds for pensioners (German pension insurance, GRV) but there is no significant effect at all for civil service pensioners. |
| Keywords: | Retirement, life-satisfaction, happiness, retirement, anticipation and adaptation effects, fixed-effect regression, Socio-Economic Panel (SOEP), Germany |
| JEL: | I31 J26 J14 J17 A13 C23 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp986&r=age |
| By: | Yoko Niimi; Charles Yuji Horioka |
| Abstract: | This paper analyzes the determinants of the wealth decumulation behavior of the retired elderly in Japan using unique information from two household surveys, and by so doing, attempts to assess the relative importance of precautionary saving and bequest motives in explaining the lower than expected rates of wealth decumulation of the retired elderly. Taken together, our analyses of these two datasets show that precautionary saving plays a relatively important role in explaining the lower than expected wealth decumulation rate of the retired elderly, at least in the case of Japan, even though both precautionary saving and bequest motives are important drivers behind this puzzle. Our results also suggest the possibility that financial burden of parental care may also affect the wealth decumulation behavior of the retired elderly in Japan. Given that parental care responsibilities tend to arise relatively late in life, often after retirement, in the case of Japan, our results suggest that the financial burden of parental care may be a relevant issue when analyzing the wealth decumulation behavior of the elderly. |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1042&r=age |
| By: | Davoine, Thomas |
| Abstract: | Population aging challenges the financing of social security systems in developed economies, as the fraction of the population in working age declines. The resulting pressure on capital-labor ratios translates into a pressure on factor prices and production. While European countries all face this challenge, the speed at which their population ages differs, and thus the pressure on capital-labor ratios. If capital markets are integrated, differences in population aging may lead to cross-country spillovers, as investors freely seek the best returns on capital. Using a multi-country overlapping-generations model covering 14 European Union countries, I quantify spillovers and find that capital market integration leads to redistribution across countries over the long run. For instance, GDP per capita would on average be 2.9 %-points lower in Germany in each of the next 50 years if capital markets were perfectly integrated and public debts kept constants with increases in labor income taxes, compared to a closed economy case; by contrast, GDP per capita would on average be 2.1 %-points higher in France, whose population ages slower than in Germany. I also show that pension reforms can change the cross-country redistribution patterns, some countries losing from capital market integration without the reform but winning with it. |
| Keywords: | population aging,pension reforms,capital markets,cross-country spillovers,overlapping-generations modelling |
| JEL: | C68 E60 F41 J11 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc18:181519&r=age |
| By: | Satoshi Shimizutani (Nakasone Yasuhiro Peace Institute); Hiroyuki Yamada (Faculty of Economics, Keio University) |
| Abstract: | Financial literacy holds growing interest for managing assets/savings during the longer retirement period currently experienced in rapidly aging countries. We examine and compare levels and determinants of financial literacy as well as its association to asset allocation among middle and older generations of Japan and the United States. We present some interesting findings. First, financial literacy is generally associated with educational attainment, cognitive skills, coursework in economics or finance, and income level. Second, financial literacy is associated with resultant asset allocation; individuals with higher literacy are more likely to invest in stocks or securities separate from their savings. These patterns are commonly observed in Japan and the United States. |
| Keywords: | financial literacy, Japan, U.S., JSTAR, HRS |
| JEL: | D14 G11 J26 |
| Date: | 2018–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2018-016&r=age |
| By: | Ramiro Albrieu (Universidad de San Andres, Buenos Aires); Jose Maria Fanelli (Universidad de San Andres, Buenos Aires) |
| Abstract: | The paper investigates empirically the links between the fiscal space, fiscal redistributions, and distributional outcomes for the case of Latin America. It focus on two factors; first, the role of intertemporal restrictions and debt sustainability and, second, the demographic transition’s influence on the fiscal redistribution structure. The paper identifies some stylized facts that matter in designing distribution-friendly fiscal consolidation policies. Two findings deserve highlighting. First, the way in which a given fiscal adjustment is implemented matters to income distribution. As a general rule, the downward adjustment of expenditures is regressive, although the importance of the impact varies substantially according to the expenditure item and from one economy to another. Second, the Demographic Window of Opportunity (DWO) is the key stage of the demographic transition regarding the fiscal space in Latin America. Younger countries are entering the DWO and the older ones have to prepare to abandon it and enter the aging stage. The exercises suggest that the DWO will create the fiscal space required to implement progressive policies in younger countries while the opposite will occur in the countries that will age. The simulations indicate that the demographic transition-driven effects on the items of fiscal redistributions are potentially very large and have substantial consequences for income distribution and debt sustainability. |
| Keywords: | Fiscal Policy, Demographics |
| JEL: | E62 J11 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:tul:ceqwps:80&r=age |
| By: | Janice Compton (University of Manitoba); Robert A. Pollak (Washington University in St. Louis) |
| Abstract: | Individual life expectancies are easy to calculate from individual mortality rates and provide useful summary measures for individuals making retirement decisions and for policy makers. For couples, analogous measures are the expected years both spouses will be alive (joint life expectancy) and the expected years the surviving spouse will spend as a widow or widower (survivor life expectancy). Using individual life expectancies to calculate summary measures for couples yields substantially misleading results because the mortality distribution of husbands and wives overlap substantially. To illustrate, consider a wife aged 60 whose husband is 62. In 2010, the wife's life expectancy was 24.5 years and her husband's 20.2 years. The couple's joint life expectancy, however, is only 17.7 years. Although her life expectancy is four years longer than his, if she is widowed (probability: .62), her survivor life expectancy is 12.5 years; if the husband is a widower (probability: .38), his survivor life expectancy is 9.5 years. We calculate trends and patterns in joint and survivor life expectancy in each census year from 1930 to 2010. Using 2010 data, we also investigate differences in joint and survivor life expectancy by race and ethnicity and by education. |
| Keywords: | mortality, retirement |
| JEL: | J10 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2018-072&r=age |
| By: | Vidhya UNNIKRISHNAN (Global Development Institute, The University of Manchester, UK); Katsushi S. Imai (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan, and Department of Economics, The University of Manchester, UK) |
| Abstract: | As India’s population has been ageing due to declines in fertility and mortality rates, more policy emphasis has been placed on reducing poverty among the elderly. The aim of the present study is to examine the effect of Indira Gandhi National Old Age Pension Scheme (IGNOAPS) on both short and long-term household welfare indicators, such as consumption expenditure. Using the household longitudinal data based on the Indian Human Development Survey in 2004-05 and 2011-12, we have applied the Propensity Score Matching (PSM) to build a counterfactual group and have used the fixed effects model to eliminate time-invariant unobservable characteristics to estimate the effect of IGNOAPS on household welfare. To address the issue of endogeneity, we have used the instrumental variable model. The results show that IGNOAPS reduces household poverty by increasing consumption expenditure, food and non-food expenditure. We have also estimated the effect of transfer payments received on the outcome variables and found that the amount of transfer determines the size of the welfare effect. Despite the positive welfare effects of the programme, it has a small adverse effect on household labour supply. |
| Keywords: | Pension, Ageing, IGNOAPS, Poverty, Household Welfare, India |
| JEL: | C23 I38 H75 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2018-20&r=age |
| By: | Paulette Castel; Alexander Pick |
| Abstract: | Viet Nam has made significant progress in expanding social insurance coverage in recent years. However, coverage amongst small and medium-sized enterprises (SMEs) remains very low and very few workers in this sector are expected to receive a pension in retirement. Drawing on two datasets for SMEs in Viet Nam, this paper seeks to explain this phenomenon by examining the characteristics of enterprises that are enrolled and those that opt out, and it identifies possible barriers to enrolment, such as high contribution rates. It also examines how enforcement mechanisms and formalisation policies might deter enterprises from enrolling. Drawing on lessons from international experience, the paper recommends a series of policy responses that seek both to address these barriers and to protect the livelihoods of those workers who are not yet covered. |
| Keywords: | formalisation, minimum wage, SMEs, social insurance, social protection, Viet Nam |
| JEL: | H24 H55 I38 J32 |
| Date: | 2018–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dcdaab:13-en&r=age |
| By: | Fraikin, Anne-Lore (University of Liège); Jousten, Alain (University of Liège); Lefèbvre, Mathieu (Université de Strasbourg) |
| Abstract: | The paper traces labor market reforms over the last four decades. It provides estimates of retirement incentives for a selected set of typical worker profiles across time and socio-economic groups and links these series to the labor market performance in Belgium. The results show that the numerous retirement and social security program reforms have had a marked impact on incentives at the micro level. At the aggregate level, results are less clear-cut given the extreme diversity of programs and features in the Belgian institutional context. |
| Keywords: | retirement, social security, pension, labor supply |
| JEL: | J21 J26 H31 I38 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11775&r=age |
| By: | Charlotte Bartels; Dirk Neumann |
| Abstract: | Redistribution across individuals in a one-year-period framework is an empirically intensely studied question. However, a substantial share of annual redistribution might turn out to serve individual insurance in a longer perspective. In particular, public pensions, that smooth incomes over the life-cycle and are funded by high taxes, play an increasingly important role in welfare states with aging societies. This paper investigates to what extent long-run redistribution diverges from annual redistribution in welfare states of different types. Exploiting panel data from the Cross-National Equivalent File (CNEF) for Australia, Germany, Korea, Switzerland, the United Kingdom and the United States, we find that supposedly highly redistributive welfare states like Germany provoke comparably less redistribution between individuals in the long-run than the United Kingdom or the United States. Regression results show that a higher share of elderly is associated with higher annual redistribution, but with less long-run redistribution between individuals. |
| Keywords: | Welfare states, redistribution, insurance |
| JEL: | D31 D63 H53 H55 I38 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp985&r=age |
| By: | Oliwia Komada (Group for Research in Applied Economics (GRAPE)); Pawel Strzelecki (Narodowy Bank Polski; Instytut Statystyki i Demografii); Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw; Institut für Arbeitsrecht und Arbeitsbeziehungen in der Europäischen Union (IAAEU); Institute of Labor Economics (IZA)) |
| Abstract: | The reform introduced in Poland in 2009 substantially and abruptly reduced the number of workers eligible for early retirement. This paper evaluates the causal effects of this reform on labor force participation and exit to retirement. We use rich rotating panel from the Polish Labor Force Survey and exploit the discontinuity imposed by this reform. We find a statistically significant, but economically small discontinuity at the timing of the reform. The placebo test shows no similar effects in earlier or later quarters, but in a vast majority of specifications the discontinuity is not larger for the treated individuals, i.e. those whose occupation lost eligibility. We interpret these results as follows: the changes in the eligibility criteria were not instrumental in fostering the participation rates among the affected cohort, i.e. the immediate contribution to increased labor force participation of these cohorts is not economically large. |
| Keywords: | privatization, rushed privatization, efficiency, firm size, employment, performance |
| JEL: | P45 P52 C14 O16 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:fme:wpaper:30&r=age |
| By: | Ezequiel Cabezon; Christian Henn |
| Abstract: | Based on a permanent income analysis, Gagnon (2018) has prominently suggested that Norway has saved too much, thereby free-riding on the rest of the world for demand. Our public sector balance sheet analysis comes to the opposite conclusion, chiefly because it also accounts for future aging costs. Unsurprisingly, we find that Norway’s current assets exceed its liabilities by some 340 percent of mainland GDP. But its nonoil fiscal deficits have grown very large (to almost 8 percent of mainland GDP) and aging pressures are only commencing. Therefore, Norway’s intertemporal financial net worth (IFNW) is negative, at about -240 percent of mainland GDP. As IFNW represents an intertemporal budget constraint, this implies that Norway’s savings are likely insufficient to address aging costs without additional fiscal action. |
| Keywords: | Public sector;Balance sheets;Oil revenues;Fiscal policy;Aging;Pensions;Fiscal balance;Debt sustainability;Norway;Public Sector Balance Sheet, Intertemporal Fiscal Balances, Debt Sustainability, General, Social Security and Public Pensions, General, Governmental Loans and Credits, Norway |
| Date: | 2018–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:18/190&r=age |
| By: | Griffin, Bretford; Hartarska, Valentina; Nadolnyak, Denis |
| Abstract: | One of the major demographic trends in the US is the aging of farm operators and landlords suggesting transition of farm ownership in the form of exit and disinvestment. This coincides with economic pressures on farmers’ incomes due to recent market volatility. We model retirement age farmers’ exit/disinvestment as the outcome of intertemporal utility maximization and identify the extent to which economic and demographic factors affect these choices using the Census of Agriculture farm-level data for the 1992-2012 period. Regression results highlight the role of demographic factors. Minority and female farmers are more likely to exit but female operators are less likely to disinvest, while family farms are less likely to exit. High sales farms are less likely to exit but more likely to disinvest possibly targeting a smaller production scale before retirement. The relative size of the non-agricultural economy is negatively associated with exit but positively with disinvestment, while off-farm work reduces exit probability only a little. However, flow economic variables such as return-on-assets and government payments do not seem to impact exit and disinvestment. These findings are largely consistent with the view that mainly demographic factors and size determine farmers’ decisions to retire, which has important policy implications. |
| Date: | 2018–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea18:266616&r=age |
| By: | Kornprom Satraphand; Supeecha Panichpathom |
| Abstract: | Although Thailand is a developing country, it is well equipped for medical care. Nowadays, Thai people have a better quality of life and step into senior society, which makes it necessary to study the needs of the elderly in various aspects including their preferences of using wellness center. Past studies have focused on medical therapeutic health care rather than preventive health care. Therefore, it is crucial to study wellness center characteristics preferred by the elderly as well as willingness to pay of each group. Location, staffs, facilities, design, and accessibility are the main senior wellness center attributes extracted from triangulation. Willingness to pay analysis of 471 respondents from 50 to 79 years old shows that recreational center with safety concern design, skillful staffs, located in quality environment, and accessible via public transportation are the most valued characteristics of senior wellness center. There are 3 groups of the respondents: (1) Fit & Cozy Pre-Senior (2) Recreation & Cozy Senior (3) Recreation & Green Pre-Senior. For future research, data collection in different seasons can be useful to test the validity of senior wellness center attributes and levels. Exploring the needs and willingness to pay of LGBTQ elderly and senior consumer behavior in health care services can be valuable information for real estate developers. |
| Keywords: | Conjoint Analysis; Design; Facilities; Segmentation; Staffs |
| JEL: | R3 |
| Date: | 2018–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2018_21&r=age |
| By: | Alexandra Schaffar (LEAD - Laboratoire d'Économie Appliquée au Développement - UTLN - Université de Toulon); Michel Dimou (LEAD - Laboratoire d'Économie Appliquée au Développement - UTLN - Université de Toulon); El Mouhoub Mouhoud (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine) |
| Keywords: | elderly,retirees,migration,territories,France |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01874221&r=age |
| By: | Sun, Yu; You, Wen |
| Keywords: | Household and Labor Economics, Behavioral & Institutional Economics, International Development |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274173&r=age |