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on Economics of Ageing |
| By: | Teresa Hanna Bednarczyk (Maria-Curie Sklodowska University) |
| Abstract: | The old-age pension systems are the largest component of social protection and pursue a variety of social goals. This paper focuses on old-age poverty protection as the key aspect of the adequacy of pensions. The main purpose of this work is to assess, whether the Polish pension scheme provides sufficient protection against income poverty for future pensioners? The following hypothesis was verified: institutional solutions in the current Polish pension scheme will not provide sufficient protection against poverty for all future pensioners. The research methods used included a review of the subject literature and an empirical analysis of statistical data. The research findings show that the statutory pension scheme in Poland does not protect well all future pensioners against income poverty. Transition to pensions based on lifetime contributions will lead to lower adequacy and an increased risk of poverty among elderly population. A minimum insurance period of 25 years for men and 20 years for women is required to obtain the right to a guaranteed minimum-pension. Persons, who do not meet this condition receive extremely low pensions (so-called penny pensions). Unfortunately, their number is still growing. Therefore, further changes in the pension system are advisable. |
| Keywords: | public pension system, pensioner, poverty, demographic aging,replacement rate |
| JEL: | H55 I32 I38 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iefpro:6909956&r=age |
| By: | Péter Hudomiet; Michael D. Hurd; Susann Rohwedder; Robert J. Willis |
| Abstract: | Physical and cognitive abilities of older workers decline with age, which can cause a mismatch between abilities and job demands, potentially leading to early retirement. We link longitudinal Health and Retirement Study data to O*NET occupational characteristics to estimate to what extent changes in workers’ physical and cognitive resources change their work-limiting health problems, mental health, subjective probabilities of retirement, and labor market status. While we find that physical and cognitive decline strongly predict all outcomes, only the interaction between large-muscle resources and job demands is statistically significant, implying a strong mismatch at older ages in jobs requiring large-muscle strength. The effects of declines in fine motor skills and cognition are not statistically different across differing occupational job demands. |
| JEL: | J26 J81 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25229&r=age |
| By: | Niimi, Yoko; Horioka, Charles Yuji |
| 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. |
| Keywords: | Aged, bequests, dissaving, Japan, life-cycle model, precautionary saving, retired elderly, saving, wealth decumulation, D14, D15, D64, E21, J14 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:agi:wpaper:00000146&r=age |
| By: | Katarzyna Maj-Wa?niowska (Cracow University of Economics); Agnieszka Wa??ga (Cracow University of Economics); Grzegorz Wa??ga (Cracow University of Economics) |
| Abstract: | Ageing society and the development of silver economy run a greater risk of poverty and social exclusion. Rapid demographic changes are not only a major challenge of public spending, workforce and consumptions patterns but also a major opportunity for new jobs and growth. The aim of this article is to assess the level of advancement in the realization of the silver economy concept in European Union countries and its influence on poverty and social exclusion. The concept of silver economy in the European Union and challenges related to ageing in the area of public finance were discussed. The silver economy index was built using the old dependency ratio, active ageing index and age-related public spending. The conducted research shows that it is difficult to indicate a statistically significant relationship between the level of advancement of the silver economy concept and the level of people at risk of social exclusion rate. The study indicates that the silver economy ratio is the highest in Nordic countries and France, and in the countries of Central and Eastern Europe this concept is much less developed. At the same time, countries accepted to the European Union after 2004 are characterized with higher level of at-risk-of poverty and social exclusion rate, as well as relatively low age-related spendings and relatively high old dependency ratios. |
| Keywords: | silver economy, poverty and social exclusion, old dependency ratio, ageing, Active Ageing Index |
| JEL: | J14 J11 I32 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iefpro:6910223&r=age |
| By: | Debets, Steven; Prast, Henriette (Tilburg University, Center For Economic Research); Rossi, Mariacristina (Tilburg University, Center For Economic Research); van Soest, Arthur (Tilburg University, Center For Economic Research) |
| Abstract: | In many countries, pension reforms reduce the generosity of collective pensions and shift the responsibility for an adequate standard of living after retirement to individuals and their households. Individuals have to make more decisions than before on supplementary pension savings, on how to invest their DC pension assets, etc. Making such decisions is challenging, since retirement planning requires intertemporal decision-making under uncertainty and is subject to behavioural and psychological biases. Many studies in different countries have shown that the large majority lack the interest, knowledge, or skills to make such decisions in a way that is in their own best interest. Governments and the pension industry try to assist individuals in making the right decisions through pension communication. This paper focuses on experiences with pension communication, and the lessons to be learned from them. First, the paper provides an overview of the literature, addressing how pension communication is organized across countries and what can be said about its efficiency. Second, using Dutch longitudinal data at the individual level, we analyse the relations between communication (receiving an annual pension overview), pension knowledge, and conscious pension decision-making. We investigate associations and aim at estimating causal effects exploiting the timing of events. |
| Keywords: | pension saving; involvement; pension knowledge; ageing; retirement |
| JEL: | D14 D83 H55 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:247a0420-2150-40f5-8b29-8e36d286f638&r=age |
| By: | Barany, Zsofia; Coeurdacier, Nicolas; Guibaud, Stéphane |
| Abstract: | We investigate the importance of worldwide demographic evolutions in shaping capital flows across countries and over time. Our lifecycle model incorporates cross-country differences in fertility and longevity as well as differences in countries' ability to borrow inter-temporally and across generations through social security. In this environment, global aging triggers uphill capital flows from emerging to advanced economies, while country-specific demographic evolutions reallocate capital towards countries aging more slowly. Our quantitative multi-country overlapping generations model explains a large fraction of capital flows across advanced and emerging countries and a substantial portion of the prolonged decline in the world interest rate. |
| Keywords: | aging; Household Saving; International Capital Flows |
| JEL: | E21 F21 J11 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13180&r=age |
| By: | Salvador Barrios (European Commission - JRC); Flavia Coda Moscarola (Centre for Research on Pensions and Welfare Policies (CeRP) Collegio Carlo Alberto, Università degli Studi di Torino); Francesco Figari (Università degli Studi dell'Insubria, ISER University of Essex and CeRP); Luca Gandullia (Dipartimento di Scienze Politiche (DISPO), Università degli Studi di Genova) |
| Abstract: | Policy discussions on pension systems generally focus on their sustainability and design, including retirement age, income reference and contributory period while relative little attention is devoted to the tax treatment of pension contributions and pension benefits. However, tax expenditures – defined as deviations from an agreed benchmark tax system – are widely used in the EU Member States and little is known on their redistributive or fiscal impact. This paper quantifies the fiscal and distributional impact of tax expenditures related to public and private contributory pension schemes, affecting both contributions and pension benefits, in 28 European countries using EUROMOD, the EU-wide microsimulation model. We find that pension-related tax expenditures can have a sizeable revenue impact and strong effects on inequality and poverty. Moreover tax expenditures tend to be progressive at two levels. First, among elderly, favoring lower income pensioners, mainly through a favorable treatment of pension incomes. Second, among working-age individuals, through partial or no deduction of pension contributions, draining resources from those at the top of the income distribution. |
| Keywords: | EUROMOD, pensions, tax expenditures, inequality, taxation, fairness, life cycle |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:taxref:201806&r=age |
| By: | Michael Callaghan; Jamie Culling; Finn Robinson (Reserve Bank of New Zealand) |
| Abstract: | This Analytical Note explores the effect of the ageing New Zealand population and the business cycle on the outlook for the labour force participation rate.These factors are important for understanding the level of maximum sustainable employment in the economy. Labour force participation is influenced by a variety of structural factors. For example, an ageing population may result in a lower aggregate labour force participation rate, because older people tend to participate less. Labour force participation is also influenced by cyclical factors. For example, a strengthening economy encourages more workers to enter the labour force. We find that labour force participation is mildly pro-cyclical in New Zealand. This suggests that monetary policy has a small influence on the participation rate, through an encouraged worker effect. The participation rates of young people and people near retirement age appear the most sensitive to business cycle fluctuations. Our analysis suggests that the aggregate participation rate is likely to remain broadly flat out to 2035, as an ageing population offsets further increases in the participation of women and older people. We expect the aggregate participation rate to increase further if participation by women aged 24-54 and people aged 55 and above increases at a greater pace than over the past decade. Alternatively, if participation rates of women and older workers have peaked, an ageing population will reduce the aggregate participation rate over time. |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nzb:nzbans:2018/10&r=age |
| By: | Brühl, Volker |
| Abstract: | The German government has recently adopted a reform package for the statutory pension insurance scheme to ensure that the pension level will not fall below 48% and that the contribution rate will not exceed 20% up to 2025. In addition, there are planned improvements in maternal pensions, pensions for people with reduced earnings capacity and relief for low-income earners. The total extra cost of these measures is estimated at approximately EUR 32bn, to be financed by funds of the statutory pension system and by increased federal subsidies. It is currently unclear how the German pay-as-you-go pension system will be reformed for the period after 2025. The author suggests establishing a "Pension Fund Germany" as a capital-backed fund with a highly diversified investment portfolio. A German sovereign wealth fund of this kind could make an important contribution to greater intergenerational equity. Financing could be provided by, for example, retaining part of the solidarity surcharge on German income tax rather than abolishing it entirely, as is currently envisaged. |
| JEL: | H54 H55 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:605&r=age |
| By: | Komada, Oliwia (GRAPE); Strzelecki, Pawel (Warsaw School of Economics); Tyrowicz, Joanna (University of Warsaw) |
| 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: | retirement age, early retirement, regression discontinuity, Poland |
| JEL: | J14 J26 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11896&r=age |
| By: | Tim Murray |
| Abstract: | Many retirees retain their housing equity until they die and do not utilize it to help finance spending on consumption. In this paper, I examine how older Americans (age 55+) may use their house as a form of precautionary savings in the event they face an increase in out-of-pocket medical expenses due to a health shock. I find that households are 12-percentage points more likely to own a home in their late retirement years if they might face an unexpected increase in medical bills, indicating that many of such households prefer not to own but choose to knowing they may get sick and face an increase in out-of-pocket medical expenses. Accordingly, I propose an insurance policy that would cover any out-of-pocket medical expenses not covered by Medicaid. When the price of the insurance policy is between 0.15%-0.50% of each householdâs house value, 12.8% of households purchase the insurance policy. In the presence of an insurance policy and health shocks, the homeownership and moving rates look like an economy without health shocks, thus correcting a possible market failure that causes households to use their house as a form of precautionary savings. |
| JEL: | D14 E13 R21 |
| Date: | 2018–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:jmp:jm2018:pmu533&r=age |
| By: | Juan Pablo Atal (Department of Economics, University of Pennsylvania); Hanming Fang (Department of Economics, University of Pennsylvania); Martin Karlsson (Department of Economics, University of Duisburg-Essen); Nicolas Ziebarth (Department of Economics, Cornell University) |
| Abstract: | We study theoretically and empirically how consumers in an individual private long-term health insurance market with front-loaded contracts respond to newly mandated portability requirements of their old-age provisions. To foster competition, effective 2009, German legislature made the portability of standardized old-age provisions mandatory. Our theoretical model predicts that the portability reform will increase internal plan switching. However, under plausible assumptions, it will not increase external insurer switching. Moreover, the portability reform will enable unhealthier enrollees to reoptimize their plans. We find confirmatory evidence for the theoretical predictions using claims panel data from a big private insurer. |
| Keywords: | individual private health insurance, portability, old-age provisions, health plan switching, switching costs, health policy reform, consumer bargaining, retention |
| JEL: | G22 I11 I18 |
| Date: | 2017–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:17-012&r=age |
| By: | Nadolnyak, D.; Griffin, B.; Hartarska, V. |
| 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. Acknowledgement : |
| Keywords: | Labor and Human Capital |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:277184&r=age |
| By: | Stephen A. Wandner; David E. Balducchi; Christopher J. O'Leary (W.E. Upjohn Institute for Employment Research) |
| Keywords: | older worker, job loss, employment, public policy, economics of aging |
| JEL: | J14 J18 J65 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:sawbedcjo18&r=age |
| By: | James Mabli; Arkadipta Ghosh; Bob Schmitz; Marisa Shenk; Erin Panzarella; Barbara Carlson; Mark Flick |
| Abstract: | Research shows that food insecure seniors suffer adverse health effects at a higher rate when compared with food secure seniors. This study presents findings on the effect that the Nutrition Services Program has on participants’ Medicare-funded health care utilization. |
| Keywords: | Nutrition, Health Care, Food Security, Nutrition Services Program, NSP |
| JEL: | I0 I1 I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:69f04f96924a415ba602494e57dc0b7c&r=age |
| By: | Yi, Q. |
| Abstract: | The separation of agricultural mechanization services from the production processes of agriculture represents the division of labor in agriculture and is a kind of innovation in the organization of agricultural production. This study explores the adoption of agricultural mechanization services among maize farmers in China and particularly examines the impacts of population aging and off-farm employment. Based on a cross-sectional data of some 600 maize farmers in 7 provinces of China , the results show that the mechanization rate of maize farming in China is about 61%, wherein over Over 46% adopt agricultural mechanization services, but while less than 15% use own agricultural machines. The proportion of family members aged?60 years old in the household negatively affects the off-farm employment of family members and the adoption of agricultural mechanization services. Also, the percent of family members engaging in off-farm work has a positive effect on maize farmers' agricultural mechanization services adoption. The findings reveal that the increasing population aging and the rising wages in China would foster the demand for agricultural mechanization services in future. This study not only complements the empirical evidence on agricultural mechanization services but also provides a better understanding of the transformation of agriculture in China. Acknowledgement : Thanks to China Center for Agricultural Policy , my coauther Min Shi and my tutor professor Huang jikun |
| Keywords: | Crop Production/Industries |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:277541&r=age |
| By: | Manuel Guerra; João Pereira; Miguel St. Aubyn |
| Abstract: | We propose a decentralized endogenous growth model in order to study the transitional dynamics associated with the process of population aging in a small open economy, that has endogenous time allocation and two growth engines: R&D and human capital accumulation. Growth of per capita output is affected negatively by the difference in the rates of growth of labor force and of the total population in the period where the weight of the labor force decreases to a new and lower level. The biggest impact on per capita output growth should be during the period where labor force grows at a lower rate than the popu- lation unless it is compensated by some other effect. Under some assumptions, a decrease in the corporate tax improves growth. |
| Keywords: | Endogenous Growth; Demographic Changes; Time Allocation; Human Capital; R&D |
| JEL: | O41 O33 J11 J22 J24 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp0602018&r=age |