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on Economics of Ageing |
| By: | Barbara B³aszczyk |
| Abstract: | Poland’s new Employee Capital Plans (PPK) scheme, which is mandatory for employers, started to be implemented in July 2019. The article looks at the systemic solutions applied in the programme from the perspective of the concept of the simultaneous reconstruction of the retirement pension system. The aim is to present arguments for and against the project from the point of view of various actors, and to assess the chances of success for the new system. The article offers a detailed study of legal solutions, an analysis of the literature on the subject, and reports of institutions that supervise pension funds. The results of this analysis point to the lack of cohesion between certain solutions of the 1999 pension reform and expose a lack of consistency in how the reform was carried out, which led to the eventual removal of the capital part of the pension system. The study shows that additional saving for old age is advisable in the country’s current demographic situation and necessary for both economic and social reasons. However, the systemic solutions offered by the government appear to be chiefly designated to serve short-term state interests and do not create sufficient incentives for pension plan participants to join the programme. |
| Keywords: | pension system, public pension regulation, private pension saving plans, employee pension funds, Employee Capital Plans |
| JEL: | G28 H55 J32 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:sec:worpap:0013&r=all |
| By: | Eibich, Peter (Max Planck Institute for Demographic Research); Lorenti, Angelo (Max Planck Institute for Demographic Research); Mosca, Irene (National University of Ireland, Maynooth) |
| Abstract: | Voluntary work is an important contribution for many non-profit organizations, such as charities, political and religious organizations. Older individuals make up a sizable share of the volunteer workforce, and volunteering is often regarded as an example of "active ageing". In this study, we examine whether retirement has a causal effect on the frequency of voluntary work provision in three English-speaking countries - England, Ireland and the U.S. We draw on data from the ELSA, TILDA and HRS studies and employ a harmonised approach in the empirical analysis. We use eligibility ages for old age pensions in an instrumental variable estimation to address potential confounding. We find that retirement increases the frequency of voluntary work provision in all three countries, especially among men. This suggests that labour market policies aimed at increasing labour force participation at older ages might have unintended consequences for the size of the volunteer workforce. |
| Keywords: | voluntary work, instrumental variable, retirement |
| JEL: | J22 J26 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13153&r=all |
| By: | Fanny A. Kluge (Max Planck Institute for Demographic Research, Rostock, Germany); Tobias C. Vogt (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | In this paper, we study the relationship between income and old age survival via the indirect pathway of private transfers. Our analysis focuses on intergenerational transfers in the family as an important, but so far less investigated, link between income and improved old age survival. We use an agent based model to simulate an exchange relationship between two generations in a family and incorporate realistic demographic, economic and time use data for Germany. We find that older parents transfer increasing shares of their pensions to their offspring and receive informal care or emotional support in return. This exchange motive is mutually beneficial as younger generations are in greater need for financial subsidies and older ones for contact and care. Our inductive approach adds to our understanding how income is spread in the family and how older family members can benefit from an exchange of money for care. |
| JEL: | J1 Z0 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2020-021&r=all |
| By: | Barslund, Mikkel (ed.) |
| Abstract: | Extending average working lives by 10 years, while ensuring an adequate social safety net for those unable to work into their late 60s and 70s, is a major social policy challenge today and for the coming decades. Tackling this challenge involves delving into policy areas that range from working conditions, skills and lifelong learning, pensions, socio-economic inequalities in health and life expectancy to the design of a much broader agenda on active ageing. This edited volume covers these issues in succinct chapters based on in-depth research by the authors. Despite the challenges of demographic ageing, as Commissioner Thyssen says in her Foreword to this book: “… ageing does not just pose challenges. If Member States promote the right active ageing approach, this also offers opportunities. Firstly, active ageing means more social opportunities. Older people contribute to society too. We should empower them to work, learn and volunteer, according to individual needs, preferences and capacities. Secondly, active ageing means economic opportunities. Older people represent a growing market. Servicing this market will lead to business opportunities and innovations in which Europe could be a leader. And the experience and expertise of older people is an indispensable asset for our economies – an asset that increases further when they can properly pass the torch by mentoring younger generations.” This booklet was produced under the FACTAGE project. |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:25657&r=all |
| By: | Ahmed Ahmed; Anna Zabai |
| Abstract: | We document that corporate pension contributions respond to tax-based incentives using the 2017 Tax Cut & Jobs Act (TCJA) as a natural experiment. The TCJA cut the U.S. federal corporate tax rate, temporarily increasing contribution incentives for sponsors of defined-benefit retirement plans. We exploit cross-sectional variation in ex-ante exposure to these incentives. We find that the tax break induced an extra $3 billion of sponsor contributions to medium- and large-scale plans in 2017. But we also find strong evidence of a reversal, both in terms of sponsor contributions and plan funding ratios by 2018. We find no evidence of impact on plan asset allocations. Our results suggest that the TCJA did not have a long-lasting impact on corporate defined-benefit pension funds. |
| Keywords: | defined-benefit pension plans, contributions, Tax Cuts & Jobs Act |
| JEL: | H22 H25 H26 H32 J32 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:863&r=all |
| By: | Rowena Crawford (Institute for Fiscal Studies); Cormac O'Dea (Cowles Foundation, Yale University) |
| Abstract: | Using a lifecycle model of consumption, saving and portfolio choice combined with linked survey and administrative data on wealth and lifetime earnings we evaluate measures of retirement preparedness. We estimate heterogeneous discount factors for households and compare the estimates of their patience to their replacement rates { the simple measure of- ten used to evaluate the adequacy of retirement savings. We ï¬ nd ï¬ rst that the speciï¬ cation of the model’s asset structure matters quantitatively for preference parameter estimates { households appear to be much more patient when they are assumed to have access only to a risk-free asset compared to when we account for the fact that much of their wealth is stored in higher-return tax-advantaged private pensions and in housing. Second we ï¬ nd that only the most patient households achieve the replacement rates out of ï¬ nal earnings that are often recommended by policy-makers and industry as sensible benchmarks for retirement preparedness. Notwithstanding this, we ï¬ nd that even quite impatient households in the population we study achieve high replacement rates out of lifetime average income { a more sensible summary measure of preparedness for retirement. |
| JEL: | D91 D31 E21 D14 H55 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2232&r=all |
| By: | Uribe-Tera\x{0301}n, Carlos; Gachet, Iva\x{0301}n; Grijalva, Diego F. |
| Abstract: | This paper studies the design and welfare implications of an optimal age-dependent taxation scheme for an emerging economy. The setting is an overlapping generations economy with uninsured productivity risk, partially insured occupational risk (unemployment and informality by exclusion), stochastic retirement, and stochastic access to the pension fund. We calibrate this model for Ecuador and find that the optimal tax scheme provides a payroll tax exemption up to age 35, thereafter becoming hump-shaped with a maximum tax rate of 50% at age 50. The progressive tax levied on labor income implies an initial marginal tax rate of 5% that increases linearly to a top marginal tax rate of 35%. This tax scheme produces a welfare gain of 2.9% measured in compensated equivalent units and reduces wealth inequality by 5.8%. For comparison, in a model built and calibrated for the US economy (no informality, higher productivity and longevity risk, and full coverage of the social security system), the optimal payroll tax implies a zero tax rate up to age 27, becoming hump-shaped thereafter with a maximum tax rate of 56.2% at age 46. |
| Keywords: | Economía, Finanzas, Impuestos, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:dbl:dblwop:1568&r=all |
| By: | Dominic Byrne (School of Economics, University of Queensland); Do Won Kwak (Graduate School of International Studies, Korea University, Seoul, Korea); Kam Ki Tang (School of Economics, University of Queensland, Australia); Myra Yazbeck (Department of Economics, University of Ottawa, Canada; School of Economics, University of Queensland) |
| Abstract: | The current literature investigating the impact of retirement and the associated spousal spillover effects overlooks the unintended effects of retirement on spouses in vulnerable health, namely spouses with long-term health conditions. In this paper, we fill this gap in the literature and investigate the impact of an individual’s retirement on their partner’s health outcomes when their partners have long-term health conditions. Given the inherent identification challenges associated with entry into retirement, we exploit an exogenous variation to pension-qualifying age in Australia. Using a Fuzzy Regression Discontinuity Design and data from the Household Income and Labour Dynamics in Australia survey, we find that the retirement of the husband has a positive impact on the wife’s Quality Adjusted Life Years (QALY) and other physical and mental health outcomes. Drawing upon the literature on QALY and cost-effectiveness thresholds, we estimate that the dollar value of the husband-to-wife spillovers could be worth somewhere between AUD8,354 and AUD25,062. |
| Keywords: | Spillovers; Retirement; Long-term Health Conditions; Regression Discontinuity Design |
| Date: | 2020–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:620&r=all |
| By: | William G. Gale; Hilary Gelfond; Jason J. Fichtner; Benjamin H. Harris |
| Abstract: | We examine household wealth across birth cohorts and over time using data from the Survey of Consumer Finances. We show that although the Great Recession reduced wealth in every age group, longer-term trends indicate that the wealth of older age groups has increased while the wealth of younger age groups has declined. A substantial share of these changes, in both directions, can be explained by changes in household demographic and economic characteristics. As for the millennial generation, their median wealth in 2016 was lower than the wealth of any similarly aged cohort between 1989 and 2007. Millennials will have several advantages in wealth accumulation relative to previous generations, such as more education and longer working lives, but also several disadvantages, including weak prospects for economic growth and delays in home purchase and marriage. The millennial generation contains a significantly higher percentage of minorities than previous generations. We estimate that minority households have tended to accumulate less wealth than whites in the past, controlling for household characteristics, and the difference appears to be growing over time for Blacks relative to whites. These results apply to the period before the COVID-19 pandemic and are best interpreted as addressing generational wealth patterns through 2016 and providing a pre-COVID benchmark against which future studies can be compared. |
| JEL: | D1 E2 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27123&r=all |
| By: | - |
| Abstract: | Este documento fue preparado por la Sede subregional de la CEPAL en México, con la finalidad de presentar antecedentes básicos relacionados con los derechos humanos de las personas mayores que sirvan para orientar las decisiones que se están tomando con respecto a este grupo social en respuesta a la pandemia por COVID-19. En él se presenta un panorama general relativo a la situación sociodemográfica de los países que atiende la Sede subregional y sistematiza las medidas que están implementando los gobiernos hasta el momento de su publicación. El análisis de la información se basa en el enfoque de derechos humanos, siguiendo los lineamientos de la Organización Mundial de la Salud (OMS) y de la Oficina del Alto Comisionado de las Naciones Unidas para los Derechos Humanos (ACNUDH). |
| Keywords: | COVID-19, VIRUS, EPIDEMIAS, ENVEJECIMIENTO DE LA POBLACION, ANCIANOS, SALUD, DERECHO A LA SALUD, DERECHOS HUMANOS, BIENESTAR SOCIAL, ASISTENCIA A LOS ANCIANOS, COVID-19, VIRUSES, EPIDEMICS, DEMOGRAPHIC AGEING, AGEING PERSONS, HEALTH, RIGHT TO HEALTH, HUMAN RIGHTS, SOCIAL WELFARE, CARE OF AGEING PERSONS |
| Date: | 2020–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col094:45493&r=all |
| By: | B. Piedad Urdinola y Jorge A. Tovar; B. Piedad Urdinola |
| Abstract: | La estimación de las Cuentas Nacionales de Transferencia para Colombia en 2014 permite establecer que el ciclo de vida superavitario del país se estrecha cada vez más, dejando muy poco espacio para aprovechar el bono demográfico. En parte, se explica por los bajos ingresos de los colombianos y se exacerba con la baja cobertura del sistema pensional, que sólo cubre a un cuarto de las personas en edad de retiro en 2014. Ese perfil tiene consecuencias negativas sobre el recaudo fiscal, pues depende altamente de los adultos entre 25 y 55 años, que además son el grueso de quienes hacen transferencias privadas a otros hogares o a su mismo hogar, generando una presión económica sobre estos adultos jóvenes, que será insostenible una vez comience el envejecimiento en menos de dos décadas en el país. |
| Keywords: | National Transfer Accounts, Age profile, consumption, intergenerational transfers. |
| JEL: | J1 D13 |
| Date: | 2020–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:018147&r=all |
| By: | Frank T Denton; Byron G Spencer |
| Abstract: | We model a stable population that has experienced an important historical event and the declining proportion of the population that remembers that event, as time passes. The proportion is determined by the demographic characteristics of the population, including its age distribution, the natural rate of growth, the underlying birth rate, the life table probabilities to which the population is subject, and the effects of immigration and emigration under alternative assumptions about the nature of the event. (We distinguish between “local” and “universal” events.) It is determined also by the choice of an age of awareness of children at the time the event occurred. We preface development of the model by noting examples of major events of the kind we have in mind and, after development, explore the model’s sensitivity to different parameter specifications, by experimental simulation. The output of each experiment is a sequence of “remembering” proportions at successive decade intervals and the corresponding mean ages of the “rememberers” in relation to the overall mean age of the population. |
| Keywords: | Population memory; Collective living memory; Population modelling; Demographic dynamics; Stable population |
| JEL: | C63 J1 J10 J11 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2020-04&r=all |
| By: | J. Ignacio Conde-Ruiz; Manu García; Luis A. Puch; Jesús Ruiz |
| Abstract: | En esta nota se actualiza el modelo estadístico de los flujos diarios de afiliación a la Seguridad Social desarrollado y estimado en Conde-Ruiz, García, Puch y Ruiz (SERIEs, 2019) y se estima también una variante del modelo que incorpora la demanda diaria de electricidad como variable explicativa. El primer modelo se utiliza para construir una serie contrafactual de afiliación “sin crisis” con la que comparar la serie observada para cuantificar el impacto de la crisis. El segundo se utiliza para realizar predicciones de la evolución de la afiliación en tiempo real teniendo en cuenta la evolución observada del consumo eléctrico. |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdafen:2020-06&r=all |
| By: | Abreu, Rafael Costa Berriel; Costa, Carlos Eugênio da |
| Abstract: | How is aggregate risks optimally shared between workers and retirees? We break this question in two parts. First, how ought risk to be shared between two groups of agents: one which must be provided incentives to make effort and other, which no longer be incentivized? Second, since incentives may be backloaded through pension entitlements, how does backloading optimally vary across states of nature? After formalizing these two aspects of the problem, we show that perfect risk sharing is optimal for log utility and when aggregate productivity growth is i.i.d.. For all other cases, departures from perfect risk sharing are welfare improving if more risk is born by retirees (resp. workers) when productivity growth is persistent (resp. mean reverting). Our numerical implementations however suggest that perfect risk sharing is approximately optimal for commonly used parameter values. |
| Date: | 2020–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:epgewp:817&r=all |
| By: | Liu, Pan (Beijing Normal University); Andersen, Torben M. (Aarhus University); Bhattacharya, Joydeep (Iowa State University) |
| Abstract: | Time-inconsistent, present-biased agents may hold commitment assets hoping to keep their current and future present bias in check. Paternalistic governments, in an effort to help such people, routinely offer commitment machinery such as restrictions (or bans) on early withdrawals from defined-contribution, retirement schemes. The larger literature on low uptake of commitment assets recognizes a trade- off: while use of commitment technologies thwarts deviation from pre-selected paths, they, nevertheless, limit flexibility of future selves to respond to unanticipated, consumption shocks. This paper rules out consumption or income shocks by design and yet uncovers a similar trade-off in a world where agents are uncertain but hold beliefs, possibly incorrect, about the present-biasedness of future selves. It shows how fully sophisticated agents — those with correct beliefs about the present-bias of future selves — are happier when the government offers tighter commitment; this is not necessarily so, for the partially naive. Indeed, the latter may be happier than their fully sophisticated counterparts if the government's commitment machinery is slack. |
| Keywords: | time-inconsistency, present bias, savings, commitment |
| JEL: | D1 D14 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13169&r=all |
| By: | Anikó Bíró (Health and Population Lendület Research Group, Centre for Economic and Regional); Tamás Hajdu (Health and Population Lendület Research Group (Institute of Economics, Centre for Economic and Regional Studies)); Gábor Kertesi (Health and Population Lendület Research Group (Institute of Economics, Centre for Economic and Regional Studies)); Dániel Prinz (Harvard University) |
| Abstract: | Using mortality registers and administrative data on incomes and population, we develop new evidence on the magnitudes and sources of life expectancy inequality in Hungary. We document considerable inequality across geographies and income groups, and show that inequality has increased between 1991-2016. We show that avoidable deaths play a large role in life expectancy inequality. Income-related geographic inequalities in health behaviors, access to care, and healthcare use are all strongly correlated with the inequality in life expectancy. |
| Keywords: | life expectancy; income inequality; administrative data; time trend |
| JEL: | I14 I12 J10 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2019&r=all |