|
on Economics of Ageing |
| By: | Izabela Karpowicz |
| Abstract: | The Netherlands’ pension system is characterized by high participation rates, adequate retirement income, strong capitalization and sustainability. Pressure points are arising, however, due to population aging and untransparent intergenerational transfers inherent in the system. Moreover, the Dutch pension system needs to adapt to the changing labor market landscape with an increasing share of workers in self-employment not covered by any pension arrangement. The government has proposed replacing collective defined-benefits schemes with personal accounts, and abolishing uniform premia and constant accrual rates. The micro-data analysis shows that allowing greater risk-taking and freedom of choice in managing pension savings could crowd self-employed into pension schemes. |
| Keywords: | Social security;Demographic indicators;Pension reforms;Pension funds;Household survey data;pension reform,self-employment,self-employed,pension system,freedom of choice |
| Date: | 2019–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/064&r=all |
| By: | Hui He; Lei Ning; Dongming Zhu |
| Abstract: | We study, both empirically and quantitatively, the role of savings and the labor supply in self-insurance channels over the life cycle when one faces not only idiosyncratic income risks, but also changes in longevity risk and pension benefits. We pick China as a case study since China has undergone a dramatic process of rapid aging and a tremendous reduction in social security benefits for the period 1995-2009. We find that both savings and the labor supply are quantitatively important self-insurance channels in responding to changes in longevity risk and pension benefits, and the responses via adjustment to savings and labor supply have significant macroeconomic implications. Applying the model to China, we find that the pension reform and rapid aging together contribute 55 percent of the increase in the household saving rate from 1995 to 2009, and they jointly capture about 64 percent of the drastic increase in the labor supply for the same period. |
| Keywords: | Pension reforms;Social security;Household survey data;Labor supply;Social welfare programs;Demographic Change,Pension Reform,Saving,Life Cycle,Heterogeneous Agent Model,household save rate,rapid age,pension benefit,save rate |
| Date: | 2019–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/061&r=all |
| By: | Antoine Bozio (IPP - Institut des politiques publiques, 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); Simon Rabaté (IPP - Institut des politiques publiques); Audrey Rain (IPP - Institut des politiques publiques); Maxime Tô (IPP - Institut des politiques publiques, UCL - University College of London [London], Institute for Fiscal Studies) |
| Abstract: | An important feature in the debate on French pensions reform is whether or not it is necessary to keep a reference retirement age in the new system. This brief aims to contribute to the debate by clarifying certain ambiguities about the concept of retirement age and by discussing the potential implications of implementing a points system. We stress the difference between the impact of reference ages in the current system – those ages changing the pension scale of the system – and implementing reference points in the new system, such points playing a useful part in informing the future pensioners. Recent economic literature has highlighted the part played by reference points in pension scales, beyond providing purely financial incentives. This would argue in favour of the new system keeping a target to which the future pensioners can refer. Rather than a single pivotal age for everyone, this brief advocates introducing a reference norm that is defined by obtaining a target replacement rate, e.g. 75 % of the last salary before retirement. Such a reference would lead to dening an individual full-pension age, adapted to each career. This would also be a return to the initial goal of a pension system, namely to maintain standard of living on retirement. Such an age reference could also be accompanied by new services for helping future pensioners prepare their retirement choices better.. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:ipppap:halshs-02516417&r=all |
| By: | Matthew S. Rutlege; Gal Wettstein |
| Abstract: | Holding nontraditional jobs Ð those that provide neither health insurance nor retirement benefits Ð at younger ages likely hurts retirement security relative to traditional jobs. But nontraditional work might be helpful to those looking to extend their careers for financial reasons. This study uses the Health and Retirement Study to determine the extent to which workers in traditional jobs with less retirement security when they reach the cusp of retirement are more likely to move to nontraditional jobs in their mid- to late-60s than those who are more secure, all else equal. It then examines whether working in nontraditional jobs at older ages helps to improve their retirement security by ages 67-68. The results indicate that workers in traditional jobs who reach age 62 with less projected retirement income, relative to their pre- retirement standard of living, are no more likely to engage in nontraditional work after age 62 than those who are better prepared. In fact, some evidence suggests that those who transition to nontraditional work have greater retirement wealth, especially business income, than those who stay in traditional work or who opt not to keep working. Among those workers who are at risk of not maintaining their pre-retirement income level in retirement, however, nontraditional work appears to move them closer to retirement security. These results suggest that nontraditional work may help underprepared workers in good health lengthen their careers and improve their retirement security. |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2020-13&r=all |
| By: | Abeliansky, Ana; Strulik, Holger |
| Abstract: | In this paper, we investigate health and aging before and after retirement for specific occupational groups. We use five waves of the Survey of Health, Aging, and Retirement in Europe (SHARE) dataset and construct a frailty index for elderly men and women from 10 European countries. We classify occupation by low vs. high education, blue vs. white collar color, and by high vs. low physical or psychosocial job burden. Controlling for individual fixed effects, we find that, regardless of the used classification, workers from the first (low status) group display more health deficits at any age and accumulate health deficits faster than workers from the second (high status) group. We instrument retirement by statutory retirement ages ("normal" and "early") and find that the health of workers in low status occupations benefits greatly from retirement, whereas retirement effects for workers in high status occupations are small and frequently insignificant. We also find that workers from low status occupations accumulate health deficits faster after retirement, i.e. we find evidence for an occupational health gradient that widens with increasing age, before and after retirement. |
| Keywords: | health deficits,occupation,retirement,frailty index,Europe |
| JEL: | I10 I19 J13 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:397&r=all |
| By: | Christian Scharrer (University of Augsburg, Department of Economics) |
| Abstract: | I study the impacts of financing rules for financial surpluses in pay-as-you-go pension systems on the business cycle and the life cycle in a dynamic stochastic large-scale overlapping generations model, where households take the inter-temporal links between contributions and pension benefits explicitly into account. The results point out that sluggish adjustments of contribution rates that are implemented by adjusting a financial buffer stock both stabilize an economy and decrease the volatility of life-time utilities of retirees and workers close to retirement. Such a policy allows these households a better hedge against macroeconomic shocks over the business cycle. Moreover, I show that the impacts of higher fluctuations of aggregate variables on the volatility of individual lifetime utilities can rather be negligible. |
| Keywords: | overlapping generations, pay-as-you-go pension systems, financing rules, business cycle, life cycle, rbc-model |
| JEL: | H55 E21 E30 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:aug:augsbe:340&r=all |
| By: | Elsa Perdrix (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics, IPP - Institut des politiques publiques) |
| Abstract: | This paper examines the causal impact of later retirement on doctor visits among the French elderly. This question is of interest since spillover effects may arise if later retirement increases healthcare expenditure. I exploit the 1993 French pension reform in a two-stage least square to deal with the endogeneity of retirement. This reform leads to a progressive increase in claiming age, cohort by cohort from 1934 to 1943. I use a two-part model to disentangle between extensive and intensive margin. I use the administrative data HYGIE to observe both healthcare consumption between 2005 and 2015 and past careers. I find that an increase in retirement by four months decreases significantly the probability to have at least one doctor visit per year by 0.815 percentage point and decreases the number of doctor visits by 1.14% between ages 67 and 75. This effect is driven by the consumption of generalist doctor visits, and tends to be stronger for the first ages of consumption observed. |
| Keywords: | Pension reform,Health,Healthcare consumption |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:ipppap:halshs-02904339&r=all |
| By: | Ankush Agarwal; Christian-Oliver Ewald; Yongjie Wang |
| Abstract: | This work studies a stochastic control problem for a pension scheme which provides an income-drawdown policy. The manager and members agree to share the investment risk based on a risk-sharing rule. The objective is to maximise both sides’ utilities by controlling the investment strategy and benefit withdrawals. We use stochastic affine class models to describe the force of mortality and consider a longevity bond whose coupon payment is linked to a survival index. We also investigate the longevity basis risk, which arises when the members’ and the longevity bond’s reference populations correlate imperfectly. By applying the dynamic programming principle to solve the corresponding HJB equations, we derive optimal solutions for the single and sub-population cases. Our numerical results show that both manager and members benefit from sharing the risk. Moreover, even in the presence of longevity basis risk, we demonstrate that the longevity bond acts as an effective hedging instrument. |
| Keywords: | Pension scheme, longevity basis risk, mortality-linked instrument, stochastic control, dynamic programming principle |
| JEL: | G11 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2020_18&r=all |
| By: | Joelle Abramowitz |
| Abstract: | Many people engage in self-employment, yet there exists a dearth of data on these arrangements. This paper addresses this gap by creating a novel dataset of self-employment roles to examine heterogeneity in self-employment arrangements. The approach uses non-public 2016 Health and Retirement Study (HRS) data on employer names and locations and narrative descriptions of industry and occupation for older workers reporting self-employment to classify self-employment of older adults in the United States into entrepreneurial roles (own/run; manage; independent). Using this classification system along with the breadth of information collected in the HRS, this work finds substantial differences in demographic characteristics, work characteristics, income, and benefits, as well as substantial variation in quality of life and retirement expectations. The paper also links the classification to administrative records on self-employment and wage employment to identify discrepancies by role across data sources. |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2020-12&r=all |
| By: | Marion Devaux (OCDE - Organisation de Coopération et de Développement Economiques); Aliénor Lerouge (OCDE - Organisation de Coopération et de Développement Economiques); Giovanna Giuffre (ISINNOVA - Institute of Studies for the Integration of Systems); Susanne Giesecke (AIT - Austrian Institute of Technology [Vienna]); Sara Baiocco (ISINNOVA - Institute of Studies for the Integration of Systems, Centre for European Policy Studies); Andrea Ricci (ISINNOVA - Institute of Studies for the Integration of Systems); Francisco Reyes (Universidade de Vigo); David Cantarero (Universidad de Cantabria [Santander]); Bruno Ventelou (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Michele Cecchini (OCDE - Organisation de Coopération et de Développement Economiques) |
| Abstract: | Background: The future burden of non-communicable diseases (NCDs) depends on numerous factors such as population ageing, evolution of societal trends, behavioural and physiological risk factors of individuals (e.g. smoking, alcohol use, obesity, physical inactivity, and hypertension). This study aims to assess the burden of NCDs in Europe by 2050 under alternative scenarios. Methods: This study combines qualitative and quantitative forecasting techniques to examine how population health in Europe may evolve from 2015 to 2050, taking into account future societal trends. Four scenarios were developed (one business-as-usual scenario, two response scenarios and one pessimistic scenario) and assessed against 'best' and 'worst'-case scenarios. This study provides quantitative estimates of both diseases and mortality outcomes, using a microsimulation model incorporating international survey data. Findings: Each scenario is associated with a different risk factor prevalence rate across Europe during the period 2015-2050. The prevalence and incidence of NCDs consistently increase during the analysed time period, mainly driven by population ageing. In more optimistic scenarios, diseases will appear in later ages, while in the pessimistic scenarios, NCDs will impair working-age people. Life expectancy is expected to grow in all scenarios, but with differences by up to 4 years across scenarios and population groups. Premature mortality from NCDs will be reduced in more optimistic scenarios but stagnate in the worst-case scenario. Interpretation: Population ageing will have a greater impact on the spread of NCDs by 2050 compared to risk factors. Nevertheless, risk factors, which are influenced by living environments, are an important factor for determining future life expectancy in Europe. |
| Keywords: | Europe,Life expectancy,Epidemiology,Health care policy,Death rates,Public and occupational health,Social systems,Behavioral and social aspects of health |
| Date: | 2020–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02873165&r=all |
| By: | Bénédicte H. Apouey (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | This article explores subjective perceptions of retirement in France, using original quantitative data on the customers of a not-for-profit insurance company. The sample contains individuals aged 4084, who are either in the labour force (N=923) or retired (N=705). Perceptions of retirement are measured using closed questions on views of the retirement transition (these views can be positive, negative, or neutral) and definitions of retirement (retirement can be interpreted as a period of freedom, boredom, greater risk of precariousness, etc.). Using a number of different social indicators, we examine whether differences in social conditions translate into heterogeneous perceptions. We also investigate whether social differences in perceptions fade away with increasing age. Both working-age individuals and retirees generally have a positive view of the retirement transition and often define retirement as a period of freedom. Perceptions of retirement are shaped by social conditions: a higher level of education and income, greater wealth, better health, and stronger social involvement go hand in hand with rosier perceptions. Moreover, we uncover a strengthening of this social gradient with increasing age. Finally, perceptions are positively correlated with satisfaction in various domains, for retirees. |
| Keywords: | Retirement,Career's end,Ageing,Perceptions,Social conditions,Satisfaction,France |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-02908456&r=all |
| By: | Alicia H. Munnell; Anqi Chen; Wenliang Hou |
| Abstract: | The National Retirement Risk Index (NRRI) measures the share of working-age households that are at risk of being unable to maintain their pre-retirement standard of living. The NRRI, which is constructed by comparing householdsÕ projected replacement rates Ð retirement income as a percentage of pre-retirement income Ð with target rates, has recently shown about half are at risk. The NRRI was originally constructed using the Federal ReserveÕs 2004 Survey of Consumer Finances (SCF). The SCF is a triennial survey of a nationally representative sample of U.S. householdsÕ assets, liabilities, and demographic characteristics. The NRRI has been updated periodically to reflect data from the 2007, 2010, 2013, and 2016 surveys. We were eagerly awaiting the release of the 2019 SCF this fall to reassess AmericansÕ retirement preparedness. The problem is that the 2019 SCF will reflect a world that no longer exists. Between those interviews and now, the country has been levelled by the COVID-19 pandemic. Hence, the most pressing question at the moment is how retirement security has been affected by the virus and the shutdown of the economy. This crisis will affect retirement security in a very different way than the Great Recession because the destruction is occurring more through widespread unemployment and less through a collapse in the value of financial assets and housing. The discussion proceeds as follows. The first section reviews the nuts and bolts of constructing the NRRI. The second section discusses how we have adapted existing research to estimate the impact of unemployment on earnings and retirement preparedness. The third section reports the results, showing that the pandemic is likely to have increased the NRRI by 5 percentage points Ð with a 7-percentage-point increase for older households and a 3-percentage-point increase for younger ones. The fourth section places the projected increase in context, explaining why the employment effects of this disaster appear to have less of an effect on retirement security than the Great Recession did. Even so, the final section concludes that the pandemic has worsened an already bleak outlook for retirement security. |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2020-11&r=all |
| By: | Antoine Bozio (IPP - Institut des politiques publiques, 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); Simon Rabaté (IPP - Institut des politiques publiques, Centraal Planbureau); Audrey Rain (IPP - Institut des politiques publiques); Maxime Tô (IPP - Institut des politiques publiques, UCL - University College of London [London], Institute for Fiscal Studies) |
| Abstract: | A points system, operating at defined yield, makes it possible to rethink how pension systems are managed. Instead of having to make repeated ad hoc changes to the parameters of the system, it is possible to define change rules that other guarantees to future pensioners, as regards not only their entitlements but also the long-term sustainability of the system. In this brief, and based on simulations of a variety of shocks to the pension system, we study what management rules deserve to be chosen. Two rules absolutely must be selected: firstly the growth in the value of the pension point should match the growth in salaries; and secondly converting the points into pension should take into account the life expectancy of each generation (cohort). A third rule that is important for the long term, is the relationship between the rules for index-linking claimed pensions and the amounts of the pensions when they start being claimed. This rule should serve as a guide to managers so that they can steer the system towards an equilibrium that is not based on too low an index-linking of the pensions. Such management implies high institutional autonomy for the system, whereby the managers need to be accountable for the finnancial equilibrium and for the risks to pension revaluation. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:ipppap:halshs-02516413&r=all |
| By: | Borella, Margherita; De Nardi, Mariacristina; Yang, Fang |
| Abstract: | In the United States, both taxes and old age Social Security benefits depend on one's marital status and tend to discourage the labor supply of the secondary earner. To what extent are these provisions holding back female labor supply? We estimate a rich life cycle model of labor supply and savings for couples and singles using the method of simulated moments (MSM) on the 1945 and 1955 birth-year cohorts and use it to evaluate what would happen without these provisions. Our model matches well the life cycle profiles of labor market participation, hours, and savings for married and single people and generates plausible elasticities of labor supply. Eliminating marriage-related provisions drastically increases the participation of married women over their entire life cycle, reduces the participation of married men after age 60, and increases the savings of couples in both cohorts, including the later one, which has similar participation to that of more recent generations. If the resulting government surplus were used to lower income taxation, there would be large welfare gains for the vast majority of the population. |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14196&r=all |
| By: | Grégory Ponthière (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée) |
| Keywords: | Pensions,social justice,mortality,life cycle |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02882357&r=all |
| By: | Antoine Bozio (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, IPP - Institut des politiques publiques); Chloé Lallemand (IPP - Institut des politiques publiques); Simon Rabaté (IPP - Institut des politiques publiques, Centraal Planbureau); Audrey Rain (IPP - Institut des politiques publiques) |
| Abstract: | La réforme des retraites visant à instaurer un système de retraite universel à rendement défini en points aura pour conséquence de renforcer le caractère contributif de la formule de calcul des pensions. Alors que dans le système actuel le cœur contributif a des effets antiredistributifs – augmentant ainsi les inégalités de pensions par rapport aux inégalités de salaires – le nouveau système deviendrait neutre et la réforme conduirait ainsi à une réduction des inégalités de pension. La raison de cet effet peu intuitif – une augmentation de la contributivité réduisant les inégalités – tient à la correction de mécanismes implicites dans le système actuel, comme la règle des 25 meilleures années ou la revalorisation par l'inflation des salaires inclus dans le calcul des pensions. La suppression de la règle de durée d'assurance dans le barème renforce par ailleurs cet effet en bénéficiant relativement plus aux individus ayant eu de faibles salaires moyens. Dans cette note, nous mettons en évidence ces effets à partir de simulations réalisées sur la population des salariés du secteur privé. Outre les individus à bas salaires, les femmes seraient largement bénéficiaires de ce changement de formule de calcul. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:ipppap:halshs-02516412&r=all |
| By: | Eloïse Sengès (DRM - Dauphine Recherches en Management - CNRS - Centre National de la Recherche Scientifique - Université Paris Dauphine-PSL); Denis Guiot (DRM - Dauphine Recherches en Management - CNRS - Centre National de la Recherche Scientifique - Université Paris Dauphine-PSL); Marleen de Mul (Erasmus University Rotterdam - Department of Regional, Port and Transport Economics); Isabelle Fabbricotti (Erasmus University Rotterdam - Department of Regional, Port and Transport Economics); Antonio Kung (TRIALOG - Trialog - Trialog [Paris]) |
| Abstract: | This handbook describes the LIFE Agile Cocreation Methodology produced by the ACCRA Consortium for the development of socially assisted robots dedicated to the elderlies with a loss of autonomy, in the European H2020 program. The goal of the LIFE methodology is to bring together robotics developers, engineers, stakeholders and end-users to cocreate robotics solutions that are more meaningful to end-users, in particular on specific targets such as the elderly. The originality of this methodology is that it seeks to bring together two very different entities: robotics and the elderly with a loss of autonomy. The central axis of this agile cocreation methodology is to position the elderly user at the very heart of the development of robotic solutions. |
| Keywords: | robot,elderly,co-creation |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02734646&r=all |
| By: | Francesco Longo (Centre for Health Economics, University of York, York, UK); Karl Claxton (Centre for Health Economics, Department of Economics and Related Studies University of York, York, UK); James Lomas (Centre for Health Economics, University of York, York, UK); Stephen Martin (Department of Economics and Related Studies, University of York, UK) |
| Keywords: | long-term care; marginal productivity; quality of life; public expenditure; cross-section; instrumental variables. |
| JEL: | H53 I38 D24 C21 C26 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:chy:respap:172cherp&r=all |
| By: | Edwards, Gonzalo; Soto, Raimundo; Zurita, Felipe |
| Abstract: | We document that life expectancies at the age of retirement differ significantly by income levels and gender in Chile. Using a sample of over 500 thousand workers that retired under the annuity system, we find that, conditional on reaching retirement age, there is a three-year difference in life expectancy between the lower and higher income groups. Differences are similar for men and women. We also find that as income per capita in Chile expanded over the past three decades, poverty levels have decreased quite markedly among pensioners. The evidence on income distribution is less clear cut. While income inequality is lower for the new generations, it increases after retirement within each generation as the poor die younger than the rich workers. Gender differences are also noteworthy. First, income among women is less unequal than that of men at retirement age and afterwards. Second, income inequality among retired men progressively worsens over time, while among women it remains stagnant over time. Our results have important im- plications for welfare projections, the allocation of health subsidies among pensioners, and the structure and management of the reserves required to life-insurance companies. |
| Keywords: | Equidad e inclusión social, Género, Pobreza, Salud, Trabajo y protección social, |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:dbl:dblwop:1624&r=all |
| By: | Costa-I-Font, Joan; Vilaplana-Prieto, Cristina |
| Abstract: | We study the effect of ageing, defined as an extra year of life, on health care utilisation. We disentangle the direct effect of ageing, from other alternative explanations such as the presence of comorbidities and endogenous time to death (TTD) that are argued to absorb the effect of ageing (so‐called ‘red herring’ hypothesis). We exploit individual level end of life data from several European countries that record the use of medicine, outpatient and inpatient care and long‐term care. Consistently with the ‘red herring hypothesis’, we find that corrected TTD estimates are significantly different from uncorrected ones, and their effect size exceeds that of an extra year of life, which in turn is moderated by individual comorbidities. Corrected estimates suggest an overall attenuated effect of ageing, which does not influence outpatient care utilisation. These results suggest the presence of ‘more than one red herring’ depending on the type of health care examined. |
| Keywords: | ageing; cormorbidities; endogeneous time to death (TTD); health care utilisation; home help use and comorbidity; hospital care; medicines use; time to death |
| JEL: | I18 |
| Date: | 2020–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:104243&r=all |
| By: | Antoine Bozio (IPP - Institut des politiques publiques, 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); Chloé Lallemand (IPP - Institut des politiques publiques); Simon Rabaté (IPP - Institut des politiques publiques); Audrey Rain (IPP - Institut des politiques publiques) |
| Abstract: | A consequence of the French pensions reform whose aim is to establish a universal pension system having defined yield and operating on a points basis will be to reinforce the contributory nature of the formula for calculating pensions. Whereas in the current system the contributory core has counter-redistributive effects – increasing the pensions inequality relative to the salaries inequality – the new system would become neutral and the reform would thus lead to a reduction in pension inequalities. The reason for this counter-intuitive effect – i.e. the effect whereby making the system more contributory reduces inequalities – is to be found in the corrections made by implicit mechanisms in the current system, such as the rules of taking the 25 best years or of revaluating the salaries included in the pensions calculation in line with inflation. Abolishing the rule of number of years of contributions in the pensions scale would also reinforce this effect by being more beneficial to individuals who have had low mean salaries. In this policy brief, we show these effects based on simulations conducted on the population of employees in the French private sector. In addition to individuals on low salaries, women would also benefit signicantly from this change in the calculation formula.. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:ipppap:halshs-02516410&r=all |
| By: | Antoine Bozio (IPP - Institut des politiques publiques, 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); Simon Rabaté (IPP - Institut des politiques publiques, Centraal Planbureau); Audrey Rain (IPP - Institut des politiques publiques); Maxime Tô (IPP - Institut des politiques publiques, UCL - University College of London [London], Institute for Fiscal Studies) |
| Abstract: | Un système en points, fonctionnant à rendement défini, permet de repenser le pilotage du système de retraite. Au lieu de devoir modifier de façon ad hoc les paramètres du système de façon répétée, il est possible de définir des règles d'évolution qui offrent des garanties aux assurés, à la fois sur leurs droits et sur la soutenabilité de long-terme du système. À partir de simulations d'une variété de chocs sur le système de retraite, nous étudions dans cette note quelles règles de pilotage méritent d'être retenues. Deux règles doivent absolument être retenues : d'abord la valeur du point retraite doit suivre la croissance des salaires, ensuite la conversion en pension doit prendre en compte l'espérance de vie de chaque génération. Une troisième règle, importante pour le long terme, est la relation entre les règles d'indexation des pensions liquidées et le montant à la liquidation. Cette règle doit servir de guide aux gestionnaires afin de piloter le système vers un équilibre qui ne repose pas sur une trop faible indexation des pensions. Un tel pilotage implique une forte autonomie institutionnelle du système, où les gestionnaires doivent être responsables de l'équilibre financier, comme des risques sur la revalorisation des pensions. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:ipppap:halshs-02516414&r=all |
| By: | Wenliang Hou |
| Abstract: | Retirees with limited financial resources face numerous risks, including out-living their money (longevity risk), investment losses (market risk), unexpected health expenses (health risk), the unforeseen needs of family members (family risk), and even retirement benefit cuts (policy risk). This study systematically values and ranks the financial impacts of these risks from both the objective and subjective perspectives and then compares them to show the gaps between retireesÕ actual risks and their perceptions of the risks in a unified framework. It finds that 1) under the empirical analysis, the greatest risk is longevity risk, followed by health risk; 2) under the subjective analysis, retirees perceive market risk as the highest-ranking risk due to their exaggeration of market volatility; and 3) the longevity risk and health risk are valued less in the subjective ranking than in the objective ranking, because retirees underestimate their life spans and their health costs in late life. |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2020-14&r=all |
| By: | Evgeny Yakovlev (New Economic School); Margarita Khvan (New Economic School); Elizaveta Smorodenkova (New Economic School) |
| Abstract: | We assess the short-term effects of the two recent economic crises, the Great Recession and the collapse of the USSR, on the elderly mortality in Russia. According to our study, crises have led to an increase in mortality with quantitatively similar elasticities of death with respect to GDP fall for both events. Further analysis of the Great Recession suggests that income depreciation, limited access to medical services, and an increase in alcohol consumption are responsible for the rise in mortality. While increases at a higher rate compared to overall mortality, alcohol-related mortality explains a relatively small part of total mortality rise. |
| Keywords: | Mortality, health, crisis, RUSSIA, Great Recession |
| JEL: | H1 I1 J1 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:abo:neswpt:w0266&r=all |
| By: | Anqi Chen; Nilufer Gok |
| Abstract: | As the COVID-19 pandemic emerged in early 2020, the stock market Ð as measured by the Dow Jones Wilshire 5000 Ð declined by 35 percent between its February peak and March trough. While the market has largely recovered since then, it remains very volatile and exposes household savings to continued market risk. During the February to March period, the value of equities in employer-sponsored retirement plans and household portfolios fell by $14.2 trillion. Of that decline, $4.4 trillion occurred in 401(k)s and Individual Retirement Accounts (IRAs), $1.8 trillion in public and private defined benefit plans, and $8.0 trillion in household non-retirement assets. This brief documents where the declines occurred and the extent to which retirement accounts are exposed to equity market risk. The first section looks at overall trends in the stock market and household exposure. The second section breaks down the decline in equity values by source. And the third section focuses specifically on retirement assets. This information is interesting and important in its own right. But, as the final section concludes, the declines also highlight the fragility of our retirement plans. More than two-thirds of the drop in retirement plan equity holdings was in defined contribution plans. As defined benefit plans become rare, households increasingly bear the full brunt of market turmoil. Much of the discussion about reforming private sector retirement plans has focused on extending coverage. But the current financial downturn also underlines the need to construct arrangements where the full market risk does not fall on retirement plan participants. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2020-10&r=all |
| By: | Antoine Bozio (IPP - Institut des politiques publiques, 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); Simon Rabaté (IPP - Institut des politiques publiques); Audrey Rain (IPP - Institut des politiques publiques); Maxime Tô (IPP - Institut des politiques publiques, UCL - University College of London [London], Institute for Fiscal Studies) |
| Abstract: | Un élément important du débat sur la réforme des retraites est la nécessité ou non de maintenir dans le nouveau système un âge de référence. Cette note vise à contribuer à ce débat en clarifiant certaines ambiguïtés autour du concept d'âge de départ à la retraite et en discutant les implications potentielles de la mise en œuvre d'un système à points. Nous insistons sur la différence entre l'impact des âges de référence dans le système actuel – qui modifient le barème du système des retraites – et la mise en place de points de repère dans le nouveau système, qui peuvent jouer un rôle utile d'information pour les assurés. La littérature économique récente met, en effet, en évidence le rôle joué par les points de référence des barèmes des retraites, au-delà des incitations purement financières. Cela plaide pour maintenir dans le nouveau système une cible à laquelle les assurés puissent se référer. Plutôt qu'un âge pivot unique pour tous, cette note plaide pour introduire une norme de référence qui soit définie par l'obtention d'un taux de remplacement cible, par exemple 75 % du dernier salaire. Une telle référence conduirait à définir un âge du taux plein individuel, adapté à chaque carrière. Ce serait aussi retrouver l'objectif initial d'un système de retraite d'assurer le maintien du niveau de vie à la retraite. Une telle référence d'âge pourrait par ailleurs être accompagnée de nouveaux services aux assurés pour mieux préparer leur choix de départ en retraite. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:ipppap:halshs-02516416&r=all |
| By: | Vincent Vandenberghe (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | This paper's aim is to contribute to the literature on elderly employment barriers by exploring the role of mental health relative to that of physical health, and the complementarity between the two. The paper uses European SHARE data. It considers the distinction between the extensive and the intensive margin of work (employment rate and hours) as well as wages/productivity. Results point at the limited role of mental health in determining employment (extensive margin) and hours (the extensive margin) in comparison to physical health. Also, men's employment or hours respond more to health problems, singularly mental ones. Another result is that ill health (be it physical or mental) has no impact on wages. Finally, results suggest moderate complementarity between mental health and physical ill health in degrading people's capacity to stay in paid employment. |
| Keywords: | Ageing, Mental Health, Physical Health, Work, Work Capacity |
| JEL: | J22 I10 J26 |
| Date: | 2020–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2020020&r=all |