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on Economics of Ageing |
| By: | Eric French; Attila S. Lindner; Cormac O'Dea; Tom A. Zawisza |
| Abstract: | We estimate the impact of public pension systems on labor supply far from the normal retirement age by exploiting Poland's switch from a Defined Benefit to a Notional Defined Contribution scheme for men born after 1948. Using the universe of taxpayers and this sharp cohort-based discontinuity in the link between current contributions and future benefits, we estimate an employment elasticity with respect to the return to work of 0.44 for ages 51-54. We estimate a lifecycle model that matches these results. The model implies that the change in the contribution-benefit link from the reform increases employment among those in their 30s but decreases it at older ages, reducing overall labor supply across the lifecycle by 2 months. |
| JEL: | D15 H55 J22 J26 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30184&r= |
| By: | Gastón A. Giordana; María Noel Pi Alperin |
| Abstract: | This paper simulates long-term trends in Luxembourg’s public expenditure on healthcare and on long-term care. We combine population projections with micro-simulations of individuals’ health status that account for their demographic, socio-economic characteristics and their childhood circumstances. Model equations estimated on data from the SHARE survey and from several branches of Social Security provide a rich framework to study policy-relevant applications. We simulate public expenditure on healthcare and long-term care under different scenarios to evaluate the separate contributions of population ageing, costs of producing health-related services, and the distribution of health status across age cohorts. Results suggest that rising per capita expenditure on healthcare will mostly result from production costs, while rising expenditure on long-term care will mostly reflect population ageing. |
| Keywords: | Ageing, Dynamic micro-simulation, Healthcare, Health-related public expenditure, Health status, Long-term care, Luxembourg, SHARE. |
| JEL: | D3 H30 I10 I12 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:bcl:bclwop:bclwp158&r= |
| By: | Kaufmann, Katja Maria (University of Mainz); Özdemir, Yasemin (University of Mainz); Ye, Han (University of Mannheim) |
| Abstract: | We study the impact of grandparental retirement decisions on family members' labor supply and child outcomes by exploiting a Dutch pension reform in a fuzzy Regression Discontinuity design. A one-hour increase in grandmothers' hours worked causes adult daughters with young children to work half an hour less. Daughters without children, with older children and sons/daughters-in-law are not affected. We show important long-run impacts on maternal labor supply and on the child penalty. Test score effects are positive for children aged 4-7 (substitution from grandparental to maternal care), and negative for children aged 11-12 (substitution from grandparental to formal childcare). |
| Keywords: | spillover effects, retirement, grandparental childcare, maternal labor supply, child development |
| JEL: | J22 J26 I38 D64 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15388&r= |
| By: | Fatih Ozhamaratli (University College London); Paolo Barucca (University College London) |
| Abstract: | The transition from defined benefit to defined contribution pension plans shifts the responsibility for saving toward retirement from governments and institutions to the individuals. Determining optimal saving and investment strategy for individuals is paramount for stable financial stance and for avoiding poverty during work-life and retirement, and it is a particularly challenging task in a world where form of employment and income trajectory experienced by different occupation groups are highly diversified. We introduce a model in which agents learn optimal portfolio allocation and saving strategies that are suitable for their heterogeneous profiles. We use deep reinforcement learning to train agents. The environment is calibrated with occupation and age dependent income evolution dynamics. The research focuses on heterogeneous income trajectories dependent on agent profiles and incorporates the behavioural parameterisation of agents. The model provides a flexible methodology to estimate lifetime consumption and investment choices for heterogeneous profiles under varying scenarios. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2206.05835&r= |
| By: | Amin, Vikesh (Central Michigan University); Behrman, Jere R. (University of Pennsylvania); Fletcher, Jason M. (University of Wisconsin-Madison); Flores, Carlos A. (California Polytechnic State University); Flores-Lagunes, Alfonso (Syracuse University); Kohler, Hans-Peter (University of Pennsylvania) |
| Abstract: | We revisit the much-investigated relationship between schooling and health, focusing on cognitive abilities at older ages using the Harmonized Cognition Assessment Protocol in the Health & Retirement Study. To address endogeneity concerns, we employ a nonparametric partial identification approach that provides bounds on the population average treatment effect using a monotone instrumental variable together with relatively weak monotonicity assumptions on treatment selection and response. The bounds indicate potentially large effects of increasing schooling from primary to secondary but are also consistent with small and null effects. We find evidence for a causal effect of increasing schooling from secondary to tertiary on cognition. We also replicate findings from the Health & Retirement Study using another sample of older adults from the Midlife in United States Development Study Cognition Project. |
| Keywords: | schooling, cognition, bounds, aging, partial identification |
| JEL: | I10 I26 J14 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15371&r= |
| By: | Aaron George Grech |
| Abstract: | The Maltese economy has experiences relatively high migration flows in recent years. As a result, in contrast to other EU countries, Malta’s workforce has not aged. However, this inflow has complicated the task of making reliable population projections, with these being revised upwards substantially every few years. While administrative data suggest that most migrants have a short stay in Malta, the underlying assumptions of existing population projections imply that many recent migrants will stay in Malta until retirement. This assumption is boosting upwards considerably long-term forecasts of ageing costs, with potential impacts on credit ratings, sustainability assessments and policy making. On the other hand, if one modifies population projections to reflect existing information on migrant’s remigration tendencies, the picture that emerges is significantly different, with GDP trends remaining unaffected while Malta’s long-term trend in spending on pensions, health and long-term care come more in line with the projected EU average. |
| JEL: | J11 O15 H55 |
| URL: | http://d.repec.org/n?u=RePEc:mlt:ppaper:0721&r= |
| By: | Karmann, Alexander; Sugawara, Shinya |
| Abstract: | This research provides a comparative study of the Japanese and German nursing home sectors. Faced with aging populations, both countries share similar long-term care policies based on social insurance. However, descriptive statistics indicate significant differences in the outcomes and costs in their respective nursing home sectors. This research aims to identify the reasons for this state of affairs by examining demographic and policy differences between the two countries. To shed light on the subject from multiple angles, we conduct three types of empirical analysis - regression, the Blinder-Oaxaca decomposition, and data envelopment analysis - on regional data from the past decade. Our findings indicate that the different outcomes are driven by both demographic and policy differences where policy relates to long-term care as well as to additional welfare aid. In terms of policy, a key difference is found in the designs of the welfare programs for low-income elders. In Germany, our results are consistent with moral hazard due to the generous design of the welfare program, while in Japan, our results do not indicate moral hazard, which may be due to strict nursing home admission rules for welfare recipients. |
| Keywords: | Japanese and German nursing home sectors,long-term care insurance,Blinder-Oaxaca decomposition,comparative study,moral hazard,welfare policy |
| JEL: | I13 I18 J14 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tudcep:0222&r= |
| By: | International Monetary Fund |
| Abstract: | Selected Issues |
| Keywords: | IMF's transparency policy; policy option; automatic adjustment mechanism; staff team of the International Monetary Fund; debt buffer; Wages; Pensions; Pension spending; Civil service; Retirement; Caribbean |
| Date: | 2022–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2022/132&r= |
| By: | Amélie Carrère (IPP - Institut des politiques publiques, INED - Institut national d'études démographiques) |
| Abstract: | La question des différences de perte d'autonomie entre les départements est essentielle puisque ceux-ci sont chefs de file de l'action sociale auprès des personnes âgées. Pour la première fois, grâce à la combinaison de plusieurs sources de données, il est possible d'avoir une photographie des besoins de prise en charge des personnes âgées dans chaque département de France. Cette étude permet d'éclairer les différences de prise en charge que l'on observe entre départements au prisme des besoins de leurs administrés, et peut les aider à orienter leur politique locale pour y répondre. Contrairement aux précédentes études sur le sujet, elle ne se restreint pas à la population recevant des prestations liées à la perte d'autonomie (Abassi et al., 2020), elle inclut à la fois la population à domicile et celle en établissement (Brunel et Carrère, 2017) elle compare plusieurs mesures de la perte d'autonomie (Larbi et Roy, 2019). Par ailleurs, elle permet de questionner les implications de la politique départementale via deux canaux : (1) la façon dont les départements mobilisent les critères d'évaluation de la perte d'autonomie, et (2) l'offre de places en établissement et les mobilités résidentielles qu'elle peut induire. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03693352&r= |
| By: | Amaral, Pedro |
| Abstract: | This paper examines the macroeconomic consequences of a demographic transition in an environment where a producer's capital structure is relevant, thereby introducing an asset supply channel. Producers are heterogeneous with respect to how productive they are in different states of the world and may pursue different combinations of safe and/or risky securities issuance when financing projects. I simulate a demographic transition calibrated to replicate the US experience starting in 1880. This transition results in modest increases in output, larger increases in saving as a whole, and particularly, in a relative increase in saving in the form of safe assets. Lower capital costs lead to producer entry (and more issuance) and to a tilt towards safe issuance. I show that omitting this asset supply channel, as standard representative firm models do, results in a quantitatively important overestimation of the transmission effects of the demographic transition, with larger output gains despite smaller interest rate reductions. |
| Keywords: | Demographic Transition; Overlapping Generations; Asset supply; Financing Policy |
| JEL: | E21 E43 E44 G32 J11 |
| Date: | 2022–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113613&r= |