|
on Economics of Ageing |
| By: | Määttänen, Niku; Valkonen, Tarmo |
| Abstract: | Abstract Many elderly people in Finland could increase they standard of living and receive more freedom of choice regarding long-term care by releasing part of their housing equity. The possibility to purchase reasonably priced life annuities and long-term care insurance would increase the benefits of housing equity release. However, there is virtually no market for such insurance in Finland. This report illustrates the benefits of life annuities and long-term care insurance, provides example of actuarially fair insurance pricing, and describes the conditions for this market to emerge. It argues that the government should support the emergence of an insurance market by clarifying the public welfare promise related to old age care and by promising not to seize private pension and long-term care insurance payouts e.g. via higher user fees for publicly provided long-term care. |
| Keywords: | Long-term care insurance, Life annuities, Ageing |
| JEL: | H24 G22 |
| Date: | 2020–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:rif:report:98&r=all |
| By: | Michael Dotsey; Wenli Li; Fang Yang |
| Abstract: | We build a unified framework to quantitatively examine population aging and credit market frictions in contributing to Chinese economic growth between 1977 and 2014. We find that demographic changes together with endogenous human capital accumulation account for a large part of the rise in per capita output growth, especially after 2007, as well as some of the rise in savings. Credit pol-icy changes initially alleviate the capital misallocation between private and public firms and lead to significant increases in both savings and output growth. Later, they distort capital allocation. While contributing to further increase in savings, the distortion slows down economic growth. Among factors that we consider, increased life expectancy and financial development in the form of reduced inter-mediation cost are the most important in driving the dynamics of savings and growth. |
| Keywords: | Aging; Credit policy; Household saving; Output growth; China |
| JEL: | E21 J11 J13 L52 |
| Date: | 2019–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:86688&r=all |
| By: | Carlos Grushka (Universidad de Buenos Aires) |
| Abstract: | When discussing the distributional impacts of pension systems, the difference between the underlying rationale for considering them as tax-transfers or deferred wage schemes is critical. The way that benefits are determined (usually with decreasing replacement rates by income level) plays a significant role to determine within-system redistribution. However, to evaluate the overall effective redistribution it is crucial to incorporate the effects of coverage or “selectivity”, and the funding or financing of the benefits under payment. The within-system redistribution is highly affected by the changing rules along time, the specific ways that they apply in each country, the different approaches for data definition (on revenue, expenditure, and coverage) and data availability. After analyzing in detail the case of Argentina and all the variables involved, we propose a simplified redistribution index, defined as the difference of gross substitution rates by education levels (proxy of lifetime income). This index can be estimated from cross-sectional income surveys and works as an excellent complement--or as a reasonable proxy--for the extent of redistribution within contributory pensions systems in different countries and periods. |
| Keywords: | social security and public pensions, personal income distribution, economics of the elderly, Argentina |
| JEL: | H50 H55 D31 J14 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:tul:ceqwps:91&r=all |
| By: | Pedro Arévalo; Katia Berti; Alessandra Caretta; Per Eckefeldt |
| Abstract: | Most countries, among which EU Member States, use public finances to redistribute resources from the working-age population to the old and the very young so as to smoothen resources over the life cycle of individuals. As the EU is confronted with population ageing, this societal model is facing challenges. This is particularly the case in light of public spending on pension and health care in the EU currently accounting for almost 20% of GDP and expected to remain major public spending items going forward. As such, and against the background of a rising dependency ratio, age-related public spending could lead to increasing tax burdens on future generations. This raises questions of intergenerational equity that cannot be measured by standard budgetary indicators, nor by traditional fiscal sustainability metrics (including the European Commission's fiscal sustainability gap indicators). Generational accounting allows calculating the present value of total net tax payments to the government (taxes paid minus transfers received) over the remaining lifetime of a cohort born in a specific year. Relying on harmonised data and the European Commission projections, including the Ageing Report, this paper estimates the lifetime fiscal burden and its distribution between current and future-born generations for all EU countries, disentangling the underlying determinants. Based on the generational accounts, two indicators measuring intertemporal and intergenerational imbalances are provided, the Intertemporal Budget Gap (IBG) and the AuerbachGokhale-Kotlikoff (AGK) indicators. The paper concludes that public finances in the EU face long-term fiscal sustainability challenges based on current policies and that there are intergenerational issues, entailing a larger adjustment for future generations. |
| JEL: | E62 H3 H5 H55 H6 I1 I3 J1 J21 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:euf:dispap:112&r=all |
| By: | Brown, Dustin C; Lariscy, Joseph T. (University of Memphis); Kalousova, Lucie |
| Abstract: | Social surveys prospectively linked with death records provide invaluable opportunities for the study of the relationship between social and economic circumstances and mortality. Although survey-linked mortality files play a prominent role in U.S. health disparities research, it is unclear how well mortality estimates from these datasets align with one another and whether they are comparable with U.S. vital statistics data. We conduct the first study that systematically compares mortality estimates from several widely-used survey-linked mortality files and U.S. vital statistics data. Our results show that mortality rates and life expectancies from the National Health Interview Survey Linked Mortality Files, Health and Retirement Study, Americans’ Changing Lives study, and U.S. vital statistics data are similar. Mortality rates are slightly lower and life expectancies are slightly higher in these linked datasets relative to vital statistics data. Compared with vital statistics and other survey-linked datasets, General Social Survey-National Death Index life expectancy estimates are much lower at younger adult ages and much higher at older adult ages. Cox proportional hazard models regressing all-cause mortality risk on age, gender, race, educational attainment, and marital status conceal the issues with the General Social Survey-National Death Index that are observed in our comparison of absolute measures of mortality risk. We provide recommendations for researchers who use survey-linked mortality files. |
| Date: | 2019–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:x9f5y&r=all |
| By: | Katharine G. Abraham; Brad Hershbein; Susan Houseman |
| Abstract: | The share of workers who are self-employed rises markedly with age. Given policy concerns about inadequate retirement savings, especially among those with lower education, and the resulting interest in encouraging employment at older ages, it is important to understand the role that self-employment arrangements play in facilitating work among seniors. New data from a survey module fielded on a Gallup telephone survey distinguish independent contractor work from other self-employment and provide information on informal and online platform work. The Gallup data show that, especially after accounting for individuals who are miscoded as employees, self-employment is even more prevalent at older ages than suggested by existing data. Work as an independent contractor is the most common type of self-employment. Roughly one-quarter of independent contractors age 50 and older work for a former employer. At older ages, self-employment generally—and work as an independent contractor specifically—is more common among the highly educated, accounting for much of the difference in employment rates across education groups. We provide suggestive evidence that differences in opportunities for independent contractor work play an important role in the lower employment rates of less-educated older adults. |
| JEL: | J26 J41 J46 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26612&r=all |
| By: | Charles Yuji Horioka; Emin Gahramanov; Aziz Hayat; Xueli Tang |
| Abstract: | In this paper, we conduct a theoretical and empirical analysis of the impact of bequest motives on the work and retirement behavior of households in Japan using micro data from the Preference Parameters Study of Osaka University. Our empirical findings are consistent with our theoretical model and show that respondents with an altruistic or strategic/exchange bequest motive work more at the intensive margin than those without any bequest motive but that respondents with a strategic or exchange bequest motive work less at the extensive margin (i.e., retire earlier) than those without any bequest motive. Our findings for the strategic or exchange motive suggest that respondents with such a motive tend to work harder than others before they retire so that they can earn more, leave a larger bequest to their children, and elicit more care from them but that they tend to retire earlier than others so that they can start receiving care for themselves and their spouses from their children sooner. A policy implication of our findings is that the exchange of bequests for the care of parents by children may be very sensitive to the inheritance tax framework. |
| JEL: | D64 J14 J22 J26 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26621&r=all |
| By: | Pashchenko, Svetlana; Porapakkarm, Ponpoje |
| Abstract: | Why do most individuals claim Social Security benefits before the full retirement age? Claiming benefits early results in a substantial reduction in pension income, yet many people claim as early as possible (age 62) or soon thereafter. We argue that by answering this question, we can make two additional contributions to the literature. First, early claiming is equivalent to low demand for Social Security annuity, thus it offers a unique context for studying the well-known annuity puzzle. Since participation in Social Security is nearly universal, the low demand for this annuity cannot be explained away by market failures. Second, we show that claiming decisions are closely linked to the subjective rate of time preferences and thus can provide a new angle for the identification of this parameter. We provide a quantitative analysis of claiming decisions using a rich structural life-cycle model that matches many important features of the data. We find that the claiming puzzle can be attributed to a combination of three factors: (i) the discrepancy between individuals' subjective valuation of Social Security annuity and its implicit price, (ii) strong bequest motives, (iii) pre-annuitized wealth. We show that if individuals were rewarded for delaying claiming not with additional annuity income but with equivalent (in present value terms) lump-sum payments, the fraction of early claimers would be significantly reduced. |
| Keywords: | Social Security, Retirement, Annuities, Consumption and Saving, Life-Cycle Model |
| JEL: | D91 G11 G22 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:97958&r=all |
| By: | Bertranou, Fabio; Casali, Pablo; Cetrángolo, Oscar |
| Abstract: | The pension system in Argentina has undergone important changes in the last decades, from the structural reform in the 1990s to its subsequent re-nationalization and expansion of coverage in the 2000s. Despite its maturity, the system has not been able to clearly align its objectives with the design of the different benefit schemes that compose it and its financing. This article seeks to revisit some of the critical issues related to the organization of the system, the persistence of fragmentation and stratification in its different contributory and non-contributory components, and its financing sustainability. Finally, some guidelines for possible reforms are proposed. |
| Keywords: | social security, pensions, financing, social security policy, pronvincial pension funds, Argentina |
| JEL: | H55 |
| Date: | 2018–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:97882&r=all |
| By: | Precious Mncayi (North-West University); Steven Henry Dunga (North-West University) |
| Abstract: | The different approaches to poverty reduction will only be effective if no category of people is left behind or miss diagnosed. There has been attention on gendered poverty, poverty among the youth, and fewer studies have focused on poverty among the elderly. The seniors face a different kind of poverty that is due to the dynamics that comes with age. As people get older their ability to participate in a productive capacity declines and that reduced their ability to earn or maintain the level of income earned in their productive age. There is need to understand the nature of poverty and which categories within the age group are more vulnerable. Using data collected in 2018 by statistics South Africa, this paper analyses the nature of poverty among the elderly (>60 years old). Focus will be on the individual and household characteristics that determine the poverty status. The paper use both descriptive statistics and a logistic regression in the analysis on poverty among the elderly. |
| Keywords: | Poverty, Elderly poverty, poverty status, household poverty, South Africa, |
| JEL: | I32 I30 J14 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:9912239&r=all |
| By: | David Neumark |
| Abstract: | I study age discrimination in hiring, exploiting a difference between age-revealed and partially age-blind hiring procedures. Under the first hiring procedure, age is revealed simultaneously with other applicant information and job offer rates are much lower for older than for younger job applicants. Under the second hiring procedure, interview selections are based on detailed, age-blind on-line applications, while subsequent interviews are not age-blind. Older applicants are not under-selected for interviews, but after in-person interviews when age is revealed, older applicants still face a much lower job offer rate. This evidence is strongly consistent with age discrimination in hiring. |
| JEL: | J14 J7 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26623&r=all |
| By: | Froehlich, Dominik Emanuel |
| Abstract: | Adult learning is high on the international policy and research agenda. One major reason is the increasing share of older employees – especially in Western societies. However, older employees are often poorly integrated into the workplace and viewed as inflexible, as unwilling to learn, and as having obsolete knowledge, and therefore as not contributing to business goals. Stereotypes in the workplace often ignore the positive effects of age and amplify the severity of negative attributions and in turn might have adverse effects on older employees’ employability. In this study, we draw from socioemotional selectivity theory and goal orientation theory to investigate how older white-collar employees' attitudes relate to their employability. We hypothesize that attitudes about the future time and goal orientation affect employability while age does not. Data were gathered from 117 employees of a Dutch emergency services organization. While a direct relationship of chronological age on employability is often assumed (e.g. stereotypes that propose increasing inflexibility with age), our results show no such effects. Instead, attitudes about future time and goal orientation are what make the difference. This study addresses a critical issue and extends our knowledge of what role age and attitudes play for staying employable. |
| Date: | 2018–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:hdv7u&r=all |
| By: | FAN Simon, (Lingnan University); PANG Yu, (Macau University of Science and Technology); PESTIEAU Pierre, (Université de Liège, CORE, and Toulouse School of Economics) |
| Abstract: | Government expenditures can be used for various socio-economic objectives, including public education, consumption of public goods and services, and social protection. This paper analyzes the optimal allocation of public expenditures among these competing functions. We establish an overlapping generations model with heterogeneous individuals in which the government optimally chooses income tax, transfer payment, educational spending, and public consumption. Our model characterizes the transitional dynamics and the steady state of each function with and without a pay-as-you-go international contract. We also conduct a simulation illustrating that the presence of an intergenerational contract may raise public consumption and social welfare in the ssteady state. |
| Keywords: | government spending,public education,public consumption,individual heterogeneity |
| JEL: | H20 H31 H50 |
| Date: | 2019–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2019018&r=all |
| By: | Grégory Ponthiere |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:eru:erudwp:wp20-01&r=all |
| By: | Yoshiaki Ogura |
| Abstract: | We find several facts that suggest the Japanese regional loan market conforms to the "search-for-yield" phenomenon, in which banks are driven to provide more risky loans by diminished loan spreads. We use a structural model to estimate demand elasticity and the degree of competition in local loan markets simultaneously. Our estimates show that competition intensifies in markets where banks hold more slack liquidity caused by monetary easing, and where loan demand is less elastic against lowering interest rates due to a rapidly aging population. We find reasonably robust evidence that banks in such competitive markets are driven to extend riskier loans. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:tcr:wpaper:e142&r=all |