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on Economics of Ageing |
| By: | Robert L. Clark; Olivia S. Mitchell |
| Abstract: | One of the most important financial decisions that pension participants make concerns how they access their pension assets when they terminate employment with their plan sponsor. Their choices depend both on own preferences and the options offered by their retirement plan. This paper examines both past and future pension withdrawal choices for those with defined benefit and defined contribution pensions, separately. Our data are drawn from a set of pension distribution questions we fielded in the Understanding American Study. Results show significant differences in distribution choices based on the type of retirement plan, with individuals covered by defined benefit plans significantly more likely to select annuities compared to similar employees covered by defined contribution plans. We also find differences in how higher annual income affects annuity choices based on coverage by DB plans. Individuals with lower levels of financial literacy and lower annual income have less knowledge of basic pension characteristics. |
| JEL: | D12 J26 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30115&r= |
| By: | Cristina Belles; Sergi Jiménez; Han Ye |
| Abstract: | This paper sheds new light on the mortality effect of delaying retirement by investigating the Spanish 1967 pension reform that exogenously changed the early retirement age depending on the date individuals started contributing to the social security system. Those that contributed before January 1st, 1967, maintained the right to voluntarily retire early at age 60, while individuals who started contributing after could not voluntarily claim pension until age 65. Using the Spanish administrative social security data, we find that the reform delayed labor market exit by around half a year and increased the probability that individuals take up disability pensions, partial pensions, and no pensions. We show evidence that delaying existing employment increases the harzard of dying between ages 60 and 69. Heterogeneous analysis indicates that the negative impact is driven by those employed in low-skill, physically and psychosocially demanding jobs. Moreover, we show that allowing for flexible retirement schemes, such as partial retirement, mitigates the negative effect of delaying retirement on mortality. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2022-06&r= |
| By: | Phitawat Poonpolkul; Ponpoje Porapakkarm; Nada Wasi |
| Abstract: | Over the coming decades, many developing countries are set to face unprecedented challenges. While their population is aging extremely fast, the old-age income supports are inadequate and fiscal resources are limited. This study develops an overlapping generations model (OLG) with formal and informal sectors for a middle-income country. Besides aging population structure overtime, the model incorporates common features of developing countries—a sizable informal sector, a connectedness between the formal and informal sectors, and inadequate pension provisions. The households are heterogeneous with respect to their education, formality status, and survival probabilities. The model is calibrated to Thailand’s economy where the government budget structure is based on the country’s fiscal historical data, and the basic universal pension scheme and Social Security scheme are realistically specified. We assess the costs of these two schemes under three long-run scenarios: (i) introducing indexation to the currently non-indexed schemes; (ii) triple increasing the basic pension scheme; and (iii) specifying the basic pension to proportionally decrease with the Social Security benefits. Using a consumption tax to quantify the costs, the consumption tax must be increased by three, eleven and nine percentage points from the current level, respectively. The Social Security scheme is projected to be unsustainable, with its fund depleted in 2045. Without any reform and benefit cuts, the scheme requires a drastic increase in the contribution rate. Welfare gains and losses across household types and redistributive impacts of the reforms are discussed. |
| Keywords: | Overlapping generations model; Fiscal sustainability; Pension; Social Security; Thailand |
| JEL: | J1 H55 I38 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:pui:dpaper:182&r= |
| By: | Denis Fougère (OSC - Observatoire sociologique du changement (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po, CEPR - Center for Economic Policy Research - CEPR, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Pierre Gouëdard (OCDE - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | Using a sample of 12,463 high-school teachers, we evaluate the impact of the 2003 reform of the French national pension scheme. Considering the progressive implementation of the reform, we cannot use a reduced-form approach. Consequently, we estimate an option value modelà la Stock and Wise (Econometrica, 1990). Structural estimates suggest that teachers are slightly risk averse, that their quarterly discount factor is close to unity and that their preference for leisure is comparable to the one found by Stock and Wise (1990). Simulations imply that teachers respond significantly to monetary incentives offered to those who continue working after the legal retirement age. Our partial effectiveness analysis shows that the reform has progressively increased the average retirement age up to 61. This shift in the retirement age distribution should have resulted in year 2010 in a 6.37% decrease of public spendings associated with high-school teachers' pensions (except income taxes and other types of expenses, such as those relating to health, social security and widowhood). |
| Keywords: | option value model,pension reform,structural evaluation |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpspec:hal-03465859&r= |
| By: | Karagiannidou, Maria; Wittenberg, Raphael |
| Abstract: | The issue of how best to finance long-term care (LTC) is the subject of recent reforms, forthcoming reforms or continuing debate in various countries and remains as relevant and challenging as ever. LTC services are crucial to the wellbeing of large numbers of older adults who need help with everyday tasks. Demand for LTC for older adults is projected to rise across developed and developing countries as the number of older adults rises. Supply of care services is likely to remain constrained due to shortages of long-term care workforce and financial constraints in many countries, and the financial risks associated with LTC remain. Financing of LTC is a complicated issue which raises considerations of economic efficiency and incentives, equity including intergenerational equity, the balance of risk between public and private funding, and sustainability of public expenditures. The aim of this paper is to discuss analytically the case for social insurance as an equitable and efficient way to finance LTC. The paper considers social insurance systems, especially in Germany and Japan, in comparison with safety net tax funded systems such as in England and the USA and more generous tax funded systems such as in Sweden and Denmark. Social insurance has advantages and disadvantages compared with these other systems. It tends to be associated with greater clarity and acceptability since it involves collection of revenues ear marked for LTC and, at least in principle, a link between contributions and benefits on the basis of clear eligibility criteria. |
| Keywords: | International Long-term Care Policy Network (ILPN) - LSE; Springer deal |
| JEL: | J1 |
| Date: | 2022–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:114896&r= |
| By: | International Monetary Fund |
| Abstract: | The International Monetary Fund (IMF) is increasingly involved in offering policy advice on public pension issues to member countries. Public pension spending is important from both fiscal and welfare perspectives. Pension policy and its reforms can have significant fiscal and distribution implications, can influence labor supply and labor demand decisions, and may impact consumption and savings behavior. This technical note provides guidance on assessing public pension systems’ macrocriticality, i.e., sustainability, adequacy, and efficiency; it also discusses the issues and policy trade-offs to be considered when designing responses aiming to address these dimensions of the pension system. The paper emphasizes the importance of taking a long-term, comprehensive perspective when evaluating public pension spending and providing policy advice. Where feasible, reforms should be gradual and transparent to allow individuals ample time to adjust their work and savings decisions and to facilitate consumption smoothing over their lifecycle to avoid poverty in old age. It is also important to ensure that pension systems’ design and reforms do not lead to undesirable impacts in other policy areas including general tax compliance, health insurance coverage, labor force participation among older workers, or labor market informality. The paper emphasizes the importance country-specific social and economic objectives and constraints, as well as political economy realities – factors that can determine whether a pension reform is a success or failure. |
| Keywords: | Fiscal Policy; Social Protection; Pensions; Fiscal Sustainability; Defined Benefit; Defined Contribution; pension policy; policy engagement; Policy advice; General consideration; pension provision; C. IMF-supported program; Pension spending; Pension reform; Aging; Europe; Africa; Global; Southeast Asia; Eastern Europe |
| Date: | 2022–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imftnm:2022/004&r= |
| By: | Bodnár, Katalin; Nerlich, Carolin |
| Abstract: | The euro area, like many other advanced economies, has entered an era of drastic demographic change. Without appropriate policy responses, population ageing in the euro area is posing formidable challenges for potential growth, monetary policy and public finances. This paper examines – from a central bank’s perspective – the macroeconomic and fiscal effects of population ageing in the euro area and looks at the main challenges ahead in the next decades. Total population in the euro area is projected to decline as of around 2035, while the old-age dependency ratio will rise strongly in the coming 15 years, putting additional burden on pension systems. The analysis in the paper finds that the demographic changes in the euro area present a drag on potential growth, mainly through labour supply and productivity growth – similarly to developments in Japan, which is ahead of the euro area in terms of population ageing. Precautionary savings may be higher, and the natural rate of interest lower, while the effect on trend inflation and wages are not obvious. Population ageing is posing a burden on fiscal policy, through upward pressure on pension spending and adversely affecting the tax bases and the structure of public revenues. Thus, it poses significant challenges for fiscal sustainability, limits fiscal policy space and effectiveness. To safeguard against the adverse economic and fiscal consequences of population ageing, there is a need for fiscal buffers, improved quality of public finance and structural reforms. JEL Classification: E24, E52, E62, J11, J21 |
| Keywords: | euro area, fiscal policy, Japan, labour force, population ageing, potential growth |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:2022296&r= |
| By: | Monnat, Shannon M |
| Abstract: | A recent report from the National Academies of Sciences, Engineering, and Medicine (NASEM) highlights rising rates of working-age mortality in the United States, portending troubling population health trends for this group as they age. The Health and Retirement Study (HRS) is an invaluable resource for researchers studying health and aging dynamics among Americans ages 50 and above and has strong potential to be used by researchers to provide insights about the drivers of rising U.S. mortality rates. This paper assesses the strengths and limitations of HRS data for identifying drivers of rising mortality rates in the U.S. and provides recommendations to enhance the utility of the HRS in this regard. Among our many recommendations, we encourage the HRS to prioritize the following: link cause of death information to respondents; reduce the age of eligibility for inclusion in the sample; increase the rural sample size; enhance the existing HRS Contextual Data Resource by incorporating longitudinal measures of structural determinants of health; develop additional data linkages to capture residential settings and characteristics across the life course; and add measures that capture drug use, gun ownership, and social media use. |
| Date: | 2022–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:njxu3&r= |
| By: | Costa-Font, Joan; Vilaplana-Prieto, Cristina |
| Abstract: | We first study the dynamic drivers of expenditure on long-term care (LTC) programs, and more specifically, the effects of labour market participation of traditional unpaid caregivers (women aged 40 and older) on LTC spending. Second, we examine spillover effects of a rise on LTC expenditure on health care expenditures (HCE) and the economy (GDP). Our estimates draw from a panel of more than a decade worth of expenditure data from a sample of OECD countries. We use a panel Vector Auto-regressive (panel-VAR) system that consider the dynamics between the dependent variables. We find that LTC expenditure increases with the rise of the labour market participation of the traditional unpaid caregiver (women over 40 years of age), and that such expenditures rise exerts large spillover effects on health spending components. We find that a 1% increase in female labour participation gives rise to a 1.48% increase in LTC expenditure and a 0.88% reduction in HCE. The effect of LTC spending over HCE is mainly driven by a reduction in inpatient and medicine expenditures, exhibiting large country heterogeneity. Finally, we document significant spillover effects of in LTC expenditures on per capita GDP. |
| Keywords: | long-term care spending; panel-VAR; dynamic panel data; female labour market participation; health spending; care spillovers; Springer deal |
| JEL: | I18 J10 |
| Date: | 2022–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:113582&r= |
| By: | Katerina Koka; Chiara Rapallini |
| Abstract: | In this paper we study how population aging impacts the age distribution of the voting electorate and voters’ choices over childcare subsidies. We build a computable general equilibrium framework populated by heterogenous agents who, over the course of their life-cycle, make endogenous and age-dependent fertility choices. The model is calibrated to match economic and population outcomes of the Italian economy. Child support favors young and fertile cohorts but can also impact all population subgroups through changes in prices, income taxation and population growth. A probabilistic voting model is used to measure voting outcomes over a range of childcare subsidy levels and tax policies. Our findings show that childcare subsidies have a positive impact on the total fertility rate and are welfare improving when financed with both capital and labor income taxation and in combination with lower pension contribution rates. A 10 percent increase in the level of subsidies can increase the population growth rate by an average of 0.47-0.70 percentage points. We find that voting choices of different population subgroups, while depending on the tax used to finance new expenditure, lead to lower levels of childcare subsidies, lower fertility rates and to a demographic 'trap'. |
| Keywords: | Endogenous fertility; childcare subsidies; aging population, voting |
| JEL: | J11 J13 D72 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2022_13.rdf&r= |
| By: | Casabianca, Elizabeth (European Commission); Kovacic, Matija (European Commission) |
| Abstract: | We estimate the direct causal effect of loneliness on a variety of health outcomes using a sample of second-generation immigrants among older adults drawn from the Survey of Health, Ageing and Retirement in Europe. In an effort to account for the endogeneity of self-declared loneliness, we explore the link between loneliness and a specific trait of maternal cultural background strongly associated with quality of relations and use the latter as an instrument for loneliness. We thus also assess the importance of cultural heritage in shaping individuals' perceptions of loneliness. Additionally, we investigate one pathway by which some specific ancestral factors may influence the formation of cultural traits in the modern era. Our results suggest that loneliness has a significant impact on health, both mental and physical. Notably, our identification strategy allows us to uncover a larger effect of loneliness on health than that found in an OLS setting. These findings are robust to a battery of sensitivity checks. |
| Keywords: | Loneliness, relationship quality, culture, mental health, physical health |
| JEL: | I12 I14 J14 D91 Z13 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:jrs:wpaper:202205&r= |
| By: | Pengli Wang (GC (UMR_8504) - Géographie-cités - UP1 - Université Paris 1 Panthéon-Sorbonne - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - UPC - Université Paris Cité); Natacha Aveline-Dubach (GC (UMR_8504) - Géographie-cités - UP1 - Université Paris 1 Panthéon-Sorbonne - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - UPC - Université Paris Cité) |
| Abstract: | China currently has 42 million elderly dependents whose long-term care needs can no longer be met by the family system that has prevailed until now. The government at all levels is encouraging the production of nursing homes (yanglaoyuan), but the shortage of caregivers is acute. This article analyzes the characteristics of the supply of nursing aides in the yanglaoyuan of two major provincial capitals with a population of 10 million (Hangzhou, a prosperous coastal city, Zhengzhou, a developing inland city), providing account on public and private initiatives to develop professional care facilities. The survey covered 31 yanglaoyuan in Hangzhou and 27 in Zhengzhou. It revealed a low level of qualification of the nursing staff due to the predominance of rural migrant women between 45 and 55 years of age, a lack of nursing skills and a low general level of remuneration. However, there has been a rise in nursing skills in Hangzhou, owing to two main drivers: financial support from the municipal government for the training and upgrading of nursing assistants' salaries on the one hand, and the contribution of foreign operators to the dissemination of nursing knowledge and techniques on the other. These characteristics are not matched by Zhengzhou, where yanglaoyuan production is still low, mainly due to the less advanced stage of economic development of this inland metropolis. |
| Abstract: | La Chine compte aujourd'hui 42 millions de personnes âgées dépendantes dont les besoins en soins de longue durée ne peuvent plus être pris en charge par le système familial qui prévalait jusque-là. L'État, à tous ses échelons, encourage la production des maisons de retraite (yanglaoyuan), mais la pénurie d'aides-soignantes est aiguë. Cet article analyse les caractéristiques de l'offre d'aides-soignantes dans les yanglaoyuan de deux grandes capitales provinciales d'une population de 10 millions d'habitants (Hangzhou, une ville côtière prospère, et Zhengzhou, une ville intérieure en développement), et rend compte des initiatives publiques et privées pour y développer des filières professionnelles de soins. L'enquête a porté sur 31 yanglaoyuan à Hangzhou et 27 à Zhengzhou. Elle révèle un faible niveau de qualification des personnels d'aides-soignantes du fait de la prédominance de femmes migrantes rurales âgées de 45 à 55 ans, d'un manque de compétences en soins infirmiers et d'un faible niveau général des rémunérations. Toutefois, on observe une montée en compétence des soins à Hangzhou, grâce à deux principaux facteurs : un soutien financier du gouvernement municipal à la formation et à la revalorisation des salaires d'aides-soignantes d'une part, et la contribution d'opérateurs étrangers à la diffusion des savoirs et techniques de soins d'autre part. Ces caractéristiques n'ont pas d'équivalent à Zhengzhou où la production de yanglaoyuan est encore faible, principalement en raison du stade de développement économique moins avancé de cette métropole de l'intérieur. |
| Keywords: | Urban China,Geriatric care nurses,Migrant Worker,Caregivers,Chine -- Développement urbain,Vieillissement - corps - promenade balnéaire - femme - Bretagne - déprise,Migrant / migration,Maisons de retraite médicalisées,Aides soignantes,Soins gériatriques,ACL,PARIS team,Aides-soignantes,soins gériatriques,maisons de retraite,vieillissement,Chine,elderly care,migrants |
| Date: | 2021–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-03482489&r= |
| By: | Jiazi Chen; Zhiwu Hong; Linlin Niu |
| Abstract: | An extended dynamic Nelson-Siegel (DNS) model is developed with an additional functional demographic (FD) factor that considers the overall demographic age distribution as a persistent long-run driving force. The FD factor in the extended DNS model improves the accuracy of the yield curve forecast by reducing both bias and variance compared to the random walk model, the DNS model, the DNS model with a simple demographic factor of a middle-to-young (MY) age ratio, and a benchmark end-shifting model. The model with an unspanned FD factor performs substantially better than the alternative models for most maturities at forecast horizons between 1 and 5 years. |
| Keywords: | Demographic distribution; Yield curve forecasting; Functional data analysis; Life cycle; Nelson-Siegel model; Semiparametric modeling. |
| JEL: | E31 E43 G12 J11 |
| Date: | 2022–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:wyi:wpaper:002606&r= |
| By: | Bruno Arpino (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Valeria Bordone (University of Vienna); Giorgio Di Gessa (University College London) |
| Abstract: | The family plays a central role in shaping health behaviors of its members through social control and support mechanisms. We investigate whether and to what extent close kin (i.e., partner and children) have mattered for older people in taking on precautionary behaviors (e.g., physical distancing) and vaccination during the COVID-19 pandemic in Europe. Drawing on data from the Survey of Health, Ageing and Retirement in Europe (SHARE), we combine its Corona Surveys (June-August 2020 and June-August 2021) with pre-COVID information (October 2019-March2020). We find that having close kin (especially a partner) is associated with a higher probability of both adopting precautionary behaviors and accepting a COVID-19 vaccine. Results are robust to controlling for other potential drivers of precautionary behaviors and vaccine acceptance, as well as to accounting for co-residence with kin. Our findings suggest that policy makers and practitioners may differently address kinless individuals when promoting public policy measures. |
| Keywords: | COVID-19; Coronavirus; Parenthood; Partnership; Precautionary behaviors; SARS-CoV-2; COVID-19 vaccine acceptance. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:fir:econom:wp2022_02&r= |
| By: | Mohamed Ali Ben Halima; Camille Ciriez; Malik Koubi; Ali Skalli |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:tep:tepprr:rr21-13&r= |