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on Economics of Ageing |
| By: | Kashnitsky, Ilya (Netherlands Interdisciplinary Demographic Institute); Aburto, José Manuel |
| Abstract: | In the map NUTS-3 regions of Europe are colored according to the deviation from European pooled estimate of the proportion of population at risk of death due to COVID-19. These estimates assume age-specific case-fatality ratio the same as in Italy for the 3047 first registered COVID-19 deaths (19 March 2020) and 2/3 of the total population infected. Such an estimate for the total European population is 2.2%. Please note, this estimate is very rough and unlikely to hold true due to multiple biases of the data for the unfolding pandemic; in contrast, the population age structures data are of good quality. Thus, whatever the total infected population is and the absolute values of age-specific case-fatality ratios, the relative differences between regions would hold as long as the age-specific profile of case-fatality ratios stays proportional. This map reflects the unequal population age structures rather than the precise figures on COVID-19 fatality. It's a demographic perspective. |
| Date: | 2020–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:abx7s&r=all |
| By: | Joanna Tyrowicz (University of Regensburg, Germany; FAME|GRAPE; University of Warsaw, Poland; IZA; Rimini Centre for Economic Analysis); Krzysztof Makarski (FAME|GRAPE; Warsaw School of Economics, Poland); Artur Rutkowski (FAME|GRAPE) |
| Abstract: | Financing consumption of the elderly in the face of the projected increase in life expectancy is a key challenge for economic policy. Moreover, standard structural models with fully rational agents suggest that about 50-60 percent of old-age consumption is financed with voluntary savings, even in the presence of a fairly generous public pension system. This is clearly inconsistent with either the data, or the alarming simulations of old-age poverty in the years to come. Old-age saving (OAS) schemes are widely used policy instruments to address this challenge, but structural evaluations of such instruments remain rare. We develop a framework with incompletely rational agents: lacking financial literacy and experiencing commitment difficulties. We study a broad selection of OAS schemes and find that they raise welfare of financially illiterate agents and to a lesser extent improve welfare of agents with a high degree of time inconsistency. They also reduce the incidence of poverty at old age. Unfortunately, these instruments are fiscally costly, induce considerable crowd-out and direct fiscal transfers mostly to those agents, who need it the least. |
| Keywords: | old-age savings, incomplete rationality, welfare effects |
| JEL: | H31 H55 I38 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:20-06&r=all |
| By: | Hippolyte d'Albis (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, PSE - Paris School of Economics); Carole Bonnet (INED - Institut national d'études démographiques); Xavier Chojnicki (EQUIPPE - Economie Quantitative, Intégration, Politiques Publiques et Econométrie - Université de Lille, Sciences et Technologies - Université de Lille, Sciences Humaines et Sociales - PRES Université Lille Nord de France - Université de Lille, Droit et Santé); Najat El Mekkaoui; Angela Greulich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Jérôme Hubert (LEM - Lille économie management - LEM - UMR 9221 - Université de Lille - UCL - Université catholique de Lille - CNRS - Centre National de la Recherche Scientifique); Julien Navaux (uOttawa - University of Ottawa [Ottawa]) |
| Abstract: | A better understanding of the resource allocation across ages is fundamentalto put in place welfare reforms in the context of population ageing.In times of major demographic change, the redistribution of resourcesbetween age groups and the funding of the economically inactive aged remainsa recurring topic of public debate and a major public policy concern inOECD countries. Governments search for a policy mix that will improve thequality of life of the elderly, while at the same time investing in the futureof the young and reducing the fiscal burden on the working population.Life expectancy and education requirements are increasing while budgetconstraints are tightening. This potentially creates tension in the allocationof resources between age groups (Preston 1984; Lee and Mason 2011a).By applying the methodology of National Transfer Accounts (NTA),this article analyzes for France (1) how the funding of consumption (publicand private) is secured at each age; (2) how the funding of consumptionhas changed over recent decades; and (3) how the consumption is financedcompared to that of other countries (China, Germany, Japan, Sweden,United Kingdom, and United States). We consider three sources for financingconsumption: the State (net transfers and in-kind services), individualsthemselves (income and assets), and families (inter vivos transfers, excludingbequests, following the NTA methodology) (United Nations 2013b). |
| Keywords: | Private and Public Consumption,Inter-Generational Equity,Generational Economy,National Transfer Accounts |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-02076546&r=all |
| By: | Norman Bannenberg (University Duisburg-Essen, Germany); Oddvar Førland (VID Specialized University, Norway); Tor Iversen (University of Oslo, norway); Martin Karlsson (University Duisburg-Essen, Germany); Henning Øien (Norwegian Institute of Public Health) |
| Abstract: | This paper evaluates the introduction of preventive home visits (PHV) for older people in Norway. Their purpose is to support autonomy and independence as well as preventing disability and nursing home admissions. We contribute to the literature by exploiting a natural experiment in Norwegian municipalities. Our results show that the introduction of a PHV program significantly changes the use of local public resources away from nursing homes, while increasing the utilization of home-based care. Further, PHVs lead to a decline in hospital admissions by 8 percent – whereas treatments for mental health conditions remain unaffected. Mortality is reduced by 4 percent in the age group 80 and above. |
| Keywords: | preventive home visits, long-term care, natural experiment, primary prevention |
| JEL: | C23 H75 I18 J14 J18 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:duh:wpaper:1907&r=all |
| By: | Lis, Eliza; Nickel, Christiane; Papetti, Andrea |
| Abstract: | Can the aging process affect inflation? The prolonged decline of fertility and mortality rates induces a persistent downward pressure on the natural interest rate. If this development is not internalized by the monetary policy rule, inflation can be on a downward trend. Using the structure of a two-sector overlapping generations model embedded in a New-Keynesian framework with price frictions, calibrated for the euro area, this paper shows that following a commonly specified monetary policy rule the economy features a ”disinflationary bias” since 1990, in a way that can match the downward trend of core inflation found in the data for the euro area. In this model, continuing to follow the same rule makes inflation to be on a declining pattern at least until 2030. At the same time, changing consumption patterns towards nontradable items such as health-care generate a small ”inflationary bias” a positive deviation of inflation from target of less than 0.1 percentage points between 1990 and 2030. In the model setting of this paper, this inflationary bias is not strong enough to counteract the disinflationary bias generated by the downward impact of aging on the natural interest rate. JEL Classification: E43, E52, E58, J11 |
| Keywords: | consumption composition, euro area, inflation, monetary policy, population aging |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20202382&r=all |
| By: | Kashnitsky, Ilya (Netherlands Interdisciplinary Demographic Institute); de Beer, Joop; van Wissen, Leo |
| Abstract: | Since young adults tend to move from rural to urban regions whereas older adults move from urban to rural regions, one may expect that differences in population ageing across urban and rural regions have increased. This paper examines whether differences in population ageing across urban and rural NUTS-2 regions of the EU-27 over the period 2003-2013 have diverged. We use the methodological approach of convergence analysis, quite recently brought to demography from the field of economic research. Unlike classical beta and sigma approaches to convergence, we focus not on any single summary statistic of convergence, but rather analyze the whole cumulative distribution of regions. Such an approach helps to identify which specific group of regions is responsible for the major changes. Our results suggest that, despite the expectations, there was no divergence in age structures between urban and rural regions, rather divergence happened within each of the groups of regions. |
| Date: | 2020–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:hj28v&r=all |
| By: | Bertrand Achou |
| Abstract: | Housing is mostly exempted from Medicaid and Supplemental Social Insurance means tests. Reforms of this special treatment have been debated but little is known about its costs, benefits and redistributive implications. I estimate a life-cycle model of single retirees accounting for this exemption. The model shows that the homestead exemption explains important patterns of Medicaid recipiency, that it is highly valued and may be of limited cost as it incentivizes saving and reduces Medicaid recipiency at older ages. The model also predicts that removing the homestead exemption or enforcing more systematically estate recovery programs would reduce redistribution towards lower-income retirees. |
| Keywords: | Medicaid, Housing Savings, Retirement, Life-Cycle |
| JEL: | H51 I13 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:rsi:irersi:3&r=all |
| By: | Anek Belbase; Laura D. Quinby; Geoffrey T. Sanzenbacher |
| Abstract: | Six states (California, Connecticut, Illinois, Maryland, New Jersey, and Oregon) have enacted auto-IRA programs that require employers without a retirement plan to automatically enroll their workers in an IRA, with workers allowed to opt out. Auto-IRAs require much less of employers than 401(k) plans. The only things that employers need to do are register with the state, provide basic data on their employees, and update payroll procedures to allow for deductions of employee contributions. Early data on OregonÕs auto-IRA show that this process can take longer than policymakers first anticipated.1 Although the initial deadlines for employer participation in OregonSaves were largely aspirational, since the state lacked information on what a reasonable timeline should look like, any delay on the employer side means that employees are slower to begin saving, which in turn places stress on the early finances of the program. This brief examines the Oregon rollout to determine whether the employer process is improving as the program matures, and to identify types of industries and employers that are taking longer to roll out the program. The discussion proceeds as follows. The first section describes OregonSaves and its enrollment process. The second section explains the analytical framework used to explore employer rollout. The third section describes the results. The final section concludes that the rollout is getting faster as OregonSaves matures, and that small employers and those in the farming industry may especially need assistance during the start-up phase. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2020-5&r=all |
| By: | Weifeng Liu; Phitawat Poonpolkul |
| Abstract: | This paper provides a framework to endogenize rates of return for risk-free bonds and risky capital in an overlapping generation model. The rate of return on capital is endogenized by introducing idiosyncratic production shocks to avoid computation challenges associated with aggregate production shocks in the literature. The framework enables the interaction between financial markets and macroeconomic conditions in a production economy. Based on this framework, the paper first examines life-cycle portfolio choice without demographic change, and illustrates that several factors such as borrowing costs, labor income and production risk play important roles in life-cycle portfolios. The paper then investigates the impacts of population aging on macroeconomic conditions, life-cycle behaviors and financial market structures. The results show that population aging leads to higher capital-labor ratios, and reduces the rates of return on both assets. The bond market shrinks significantly, and capital decreases if the fertility rate declines but increases if the mortality rate declines, leading to structural change in financial markets. The impacts on life-cycle variables are quite different in the fertility and mortality cases particularly at the late stage of life. |
| Keywords: | Demographic change, portfolio choice, financial market structure, risk premium, idiosyncratic production shock, overlapping generation model. |
| JEL: | J11 G11 C63 C68 E21 E23 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-20&r=all |
| By: | Peter Eibich (Max Planck Institute for Demographic Research, Rostock, Germany); Léontine Goldzahl |
| JEL: | J1 Z0 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2020-011&r=all |