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on Economics of Ageing |
| By: | Yasutaka Ogawa (Director and Senior Economist, Institute for Monetary and Economic Studies (currently, Financial System and Bank Examination Department), Bank of Japan (E-mail: yasutaka.ogawa@boj.or.jp)); Jiro Yoshida (Pennsylvania State University and the University of Tokyo (E-mail: jiro@psu.edu)) |
| Abstract: | This study quantifies the macroeconomic impact of population aging with a focus on large houses owned by elderly households for bequest motives, although younger generations may leave the inherited houses vacant. A quantitative overlapping generations model incorporates age-specific mortality rates and bequest motives to generate a hump- shaped age profile for consumption and an upward-sloping age profile for housing and savings. When calibrated to the Japanese economy, the model suggests that bequest-driven housing demand raises the output level but reduces consumption, the natural rate of interest, capital allocation to the goods sector, and housing affordability. These effects are more pronounced when households intend to bequeath housing rather than financial assets and when more houses become vacant upon inheritance. |
| Keywords: | Aging, Natural Rate of Interest, Overlapping Generations Model, Bequest Motives, Intergenerational Transfer of Housing, Japan |
| JEL: | D15 E22 J11 R21 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ime:imedps:24-e-04 |
| By: | Pablo Garcia Sanchez; Luca Marchiori; Olivier Pierrard |
| Abstract: | We propose a two-period overlapping generation economy that incorporates health investment in preventive measures during youth. These preventive measures contribute to increased longevity and reduced frailty, which influence old-age care costs. As these costs are funded through pay-as-you-go social security contributions, investment in prevention creates externalities for the next generation. We analytically determine the optimal level of prevention and characterize the optimal health policy that a government should implement to achieve it. Our findings reveal that the optimal subsidy to healthcare exceeds the optimal subsidy to preventive measures. Furthermore, both subsidies are inversely related to the generosity of the public pension scheme. We explore the robustness of our results through various extensions and demonstrate their consistency with several patterns observed in cross-country OECD data. |
| Keywords: | Health, Prevention, Optimal Ramsey policy, Overlapping generations |
| JEL: | H23 I18 O41 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:bcl:bclwop:bclwp186 |
| By: | Carla Rowold (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Gender Pension Gaps (GPG) represent crucial indicators of gender inequalities over the life course and reflect the value welfare states place on different types of work. Despite reaching higher levels, they receive less attention than other gender inequalities, such as gender wage gaps. More generally, research on gender inequalities typically focuses on selected sets of life course summary measures, predominantly the employment duration, to explain gender inequalities across the life course. Taking a life course perspective and using data from the Survey of Health, Ageing, and Retirement in Europe (SHARE) for the Netherlands and West Germany, I propose an innovative combination of machine learning, sequence analysis, and decomposition techniques, allowing for a new perspective on gender inequalities over the life course. The study contributes by disentangling which specific life course elements are most relevant for pension inequalities and quantifies the role of gender-exclusive life-course experiences for gender disparities. I find that the duration, timing, order of life-course states, and overall life course complexity matter for pension income inequalities in both pension systems. Specifically, the duration, timing, and order of care work experiences are more crucial pension predictors than employment duration, which has been the primary focus of previous research. The largest parts of the GPGs are attributable to gender-exclusive life course experiences: There is no male counterpart for the female engagement in care work, which is poorly rewarded in pension systems. Future research and policymakers likely benefit from considering such gender-specific combinations of life-course experiences and applications of the methodological approach to other inequalities. |
| Keywords: | Germany (Alte Bundesländer), Netherlands, family life, gender, inequality, life cycle, retirement pensions, working life |
| JEL: | J1 Z0 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2024-021 |
| By: | Anastasia A. Lam (Max Planck Institute for Demographic Research, Rostock, Germany); Katherine Keenan; Hill Kulu (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Keywords: | Korea, South, chronic diseases, expectation of working life, life expectancy, retirement |
| JEL: | J1 Z0 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2024-022 |
| By: | Luong, Tuan Anh; Nguyen, Manh-Hung |
| Abstract: | In this paper, we analyse the impacts of climate change, in particular greenhouse gases on people’s life quality in general, and physical and mental health in particular. These outcomes are taken from the Survey of Health, Ageing and Retirement in Europe which took place from 2004 to 2019. We provide a wealth of evidence that shows the adverse impacts of greenhouse gases emission. For instance, doubling the amount of carbon dioxide emission would reduce the quality of life of a person aged 50 by 3.8 percent. The effects on mental health are more noticeable than those on physical health. These effects are, however, not constant across ages. Middle-aged people are more vulnerable than older ones. |
| Keywords: | Climate change; greenhouse gases; carbon dioxide emission; methane emission; nitrous oxide emission; life quality; physical health; mental health. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129467 |
| By: | Sanny Boy Domingo Afable (Max Planck Institute for Demographic Research, Rostock, Germany); Yana C. Vierboom (Max Planck Institute for Demographic Research, Rostock, Germany); Megan Evans (Max Planck Institute for Demographic Research, Rostock, Germany); Júlia Mikolai (Max Planck Institute for Demographic Research, Rostock, Germany); Hill Kulu (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Residential mobility is one strategy to cope with the challenges of ageing. But how health decline triggers residential mobility and whether this relationship differs by parental status remain underexplored. Using data on parents and non-parents aged 50+ from the Survey of Health Ageing and Retirement in Europe (SHARE), we perform multinomial logistic regression to examine how recent and previous experiences of acute health events, functional limitation, worsened frailty status, and worsened self-rated health influence the two-year probability of transitions between independent private home living, co-residence with a child (among parents), receiving home-based care, and nursing home admission. We find that none of the health variables are associated with parents’ co-residential moves with adult children, while acute health events, functional limitation, and worsened frailty are associated with transitions to home-based care for parents and non-parents alike. Previous experiences of these health declines have a stronger influence on most residential transitions compared to their recent counterparts across parental status, suggesting that the “triggering” effects of health on residential mobility take time. Our findings demonstrate the importance of viewing late-life residential mobility from a relational, competing risk framework, and highlight home-based care as key strategy for responding to health challenges in later life. |
| Keywords: | Europe, ageing, health, residential mobility |
| JEL: | J1 Z0 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2024-018 |
| By: | Carla Rowold (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Even though Gender Pension Gaps (GPG) surpass gender wage gaps in most European countries, we know less about how they emerge and relate to gendered life-course inequalities. This study contributes by applying a life-course-sensitive decomposition to linked survey-register data for Germany (SHARE-RV), decomposing gender gaps in public and private pensions based on common work-family life courses. It considers the interdependencies of employment, family life, and earning positions over the life course, relevant due to pension privatization in Europe. GPGs occur because privileged life courses (stable civil servant careers for public and high-income employment for private pensions) yield high pensions but are almost exclusively accessible by fathers. Gender differences in access to high-income careers for parents drive the GPG in private pensions more than the gap in public pensions. The study underscores the future risk of high GPGs given the persistently high Gender Wage Gap and pension privatization in Germany. |
| Keywords: | Germany (Alte Bundesländer), employment, family life cycle, gender, income, life cycle, pension schemes, retirement pensions |
| JEL: | J1 Z0 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2024-015 |
| By: | Chang Foo Chung (Tunku Abdul Rahman University of Management and Technology, No.1, Jalan Alamesra, Alamesra, 88450, Kota Kinabalu, Sabah, Malaysia Author-2-Name: Ivana Chandra Voo Author-2-Workplace-Name: Tunku Abdul Rahman University of Management and Technology, No.1, Jalan Alamesra, Alamesra, 88450, Kota Kinabalu, Sabah, Malaysia Author-3-Name: Rosdiana Bt Abdul Hamid Author-3-Workplace-Name: "Research and Development Unit, Lembaga Penduduk Dan Pembangunan Negara, No.12b, Bangunan LPPKN, Jalan Raja Laut, 50350, Kuala Lumpur, Malaysia. " Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | " Objective - Malaysia's elderly population is expanding at an unprecedented rate, surpassing the pace of ageing in historically established 'aged nations.' Statisticians project that Malaysia will reach 'aged nation' status by 2030, a transition occurring more rapidly than any previously recorded. Methodology - The concept of productive aging is pivotal to national sustainability, implying that the elderly should remain active contributors to society, both socially and economically, to alleviate potential strain on governmental resources. This study probes the labour force participation of Malaysia's elderly by examining the influence of intergenerational cash support, financial status, and feelings of loneliness on their employment decisions. Findings - Employing bivariate and logistic regression analyses, the research conclusively demonstrates that these variables significantly affect labour force engagement among the aged. Specifically, the absence of cash support from employed adult children, lack of savings or investments, and experiences of loneliness increase the probability of the elderly re-entering the workforce. Novelty - The implications of these empirical findings are profound for policymakers, who can utilise this data to craft more nuanced policies aimed at incentivizing labour force re-entry among the elderly. Such policies could not only foster productive ageing but also mitigate the risks of an inactive elderly population during their later years. Type of Paper - Empirical" |
| Keywords: | elderly people; financial status; intergenerational cash support; labour force participation; loneliness; sustainability |
| JEL: | J14 J18 J22 |
| Date: | 2024–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:jber246 |
| By: | Daniele Vignoli (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Giammarco Alderotti (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Cecilia Tomassini (Università del Molise) |
| Abstract: | Objective As populations age, family dynamics are inherently intertwined with health issues. This paper addresses the correlates of silver splits – i.e., voluntary union dissolutions after the age of 50 – in Europe by focusing on the role of partners’ health status. Background Family diversity at later ages is growing in wealthy countries, with late union dissolutions increasingly occurring through separation and divorce rather than widowhood. Nonetheless, we know little about the correlates of silver splits in Europe, especially regarding the role of health status. Method We use data from the European Survey of Health, Ageing and Retirement, and employ discrete-time event history analysis to model the probability of silver splits, separately for couples in which both partners are aged 50–64 and for couples in which at least one partner is 65 or older. We inspect three different health dimensions for both partners within a couple: the self-rated health, the Global Activity Limitations Index, and depression. Results Our results indicate a non-negligible association between health status and union dissolution among couples aged 50–64, with gender playing a crucial role. When the male partner has poor self-rated health or activity limitations, but the female partner is healthy, the risk of union dissolution remains similar to that of healthy couples. However, if the female partner has poor self-rated health or activity limitations while the male partner is healthy, the risk of union dissolution increases significantly. Additionally, poor mental health in either partner (or both) raises the risk of union dissolution. The results regarding couples in which at least one partner is aged 65 are less informative, suggesting that the role of health in shaping silver splits may weaken with age. Conclusion Researchers should consider how health operates as a stressor on union stability and should exercise caution in interpreting cross-sectional studies as evidence of the benefits of unions. Among couples in the early phase of old age (50–64), gendered health-related selection effects are at play, with men struggling more than women with a partner’s deteriorating health, jeopardizing the couple’s stability. Acknowledgements This work was funded by the European Union – Next Generation EU, in the context of The National Recovery and Resilience Plan, Investment Partenariato Esteso PE8 “Conseguenze e sfide dell'invecchiamento†, Research Program Age-It (Ageing Well in an Ageing Society, PE8-B83C22004800006). The authors are thankful to the colleagues from the Unit of Population and Society (UPS) of the University of Florence, to the members of the Laboratory on Longevity and Ageing (LoLA), to Damiano Uccheddu and to Francesca Zanasi for their comments. |
| Keywords: | grey divorces; silver splits; union dissolution; ageing; Europe |
| JEL: | J12 I14 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:fir:econom:wp2024_07 |
| By: | Chang Foo Chung (Tunku Abdul Rahman University of Management and Technology, No.1, Jalan Alamesra, Alamesra, 88450, Kota Kinabalu, Sabah, Malaysia Author-2-Name: Ivana Chandra Voo Author-2-Workplace-Name: Tunku Abdul Rahman University of Management and Technology, No.1, Jalan Alamesra, Alamesra, 88450, Kota Kinabalu, Sabah, Malaysia Author-3-Name: Rosdiana Abdul Hamid Author-3-Workplace-Name: "Research and Development Unit, Lembaga Penduduk Dan Pembangunan Negara, No.12b, Bangunan LPPKN, Jalan Raja Laut, 50350, Kuala Lumpur, Malaysia. " Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | "Objective - The enlargement of the ageing population in Malaysia at an expeditious speed has sparked great concerns of many parties. It is anticipated that Malaysia will become an 'aged nation' by 2030 as predicted by many statisticians. This study attempted to provide insights into policy design to create a sustainable community for elderly people in Malaysia, which is in line with one of the 17 SDGs, i.e., SDG-11. Methodology - Productive and healthy ageing is the key to form a sustainable community for elderly people. This research offers an in-depth examination of the interconnections among loneliness, intergenerational financial support, and demographic factors as they influence the employment decision-making processes of elderly people in Malaysia. Findings - Through an analysis of the interplay between these elements, our study sheds light on the intricate factors that contribute to the labour force participation of the elderly, enhancing our comprehension of the multifaceted nature of elder employment trends within the nation. To examine and compare the relationship, univariate, bivariate and logistic regression analyses were employed. Novelty - All analyses showed all explanatory variables in this study are significantly related to the labour force participation of elderly men. In the case of elderly women, the loneliness status variable is not significant. There are some limitations acknowledged in this study that limit the study's findings, and few suggestions for the future study were provided at the end of this study. Type of Paper - Empirical" |
| Keywords: | elderly people; gender differences; intergenerational cash transfer; labour force participation; loneliness; sustainability |
| JEL: | J14 J18 J22 |
| Date: | 2024–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:jber247 |
| By: | Lin, Zhuoer (Yale University); Chen, Xi (Yale University) |
| Abstract: | Growing evidence suggests that place of birth (PoB) and related circumstances may have long- lasting and multiplicative contributions to various later-life outcomes. This study investigates the extent to which PoB contributes to a wide range of domains of later-life cognitive function. Leveraging a nationally representative sample of older Americans from the Health and Retirement Study (HRS), cognitive function is assessed in Harmonized Cognitive Assessment Protocol (HCAP). Regression-based Shapley decompositions are employed to quantify the contribution of PoB. We show that PoB significantly contributes to all assessed cognitive domains including memory, executive function, language and fluency, visuospatial function, orientation, and general cognitive function. Geographic disparities in cognitive function are evident across PoB, with individuals born in US southern states and foreign-born individuals performing worse than those born in other states. Overall, state of birth accounts for 2.2-9.7% of the total variance in cognition after controlling for age, sex, and race/ethnicity, which declines to 2.0-7.0% after further controlling for comprehensive socioeconomic and health factors over the life course, and are robust to the control of current state of residence. Addressing these disparities requires more equalized place-based policies, resources, and early-life environments to promote health equity over the life course. |
| Keywords: | geographic disparities, health equity, cognitive domains, life course, early-life circumstances |
| JEL: | I14 I10 J13 J14 H75 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17147 |
| By: | Serdar Birinci; Miguel Faria-e-Castro; Kurt See |
| Abstract: | Between 2020 and 2023, the fraction of retirees in the working-age population in the U.S. increased above its pre-pandemic trend. Several explanations have been proposed to rationalize this gap, such as the rise in net worth due to higher asset returns, the labor market's deterioration due to higher unemployment risk, the expansion of fiscal support programs, and increased mortality risk. We quantitatively study the interaction of these factors and decompose their relative contribution to the recent rise in retirements using an incomplete markets, overlapping generations model with a frictional labor market. We find that all of these channels contribute to excess retirements, with labor market conditions being a more important driver in 2020-2021 and fiscal programs playing a larger role in 2022-2023. We show that our model's predictions on aggregate labor market moments and cross-sectional moments on retirement patterns across the wealth distribution are in line with the data. |
| Keywords: | retirement; labor supply; labor flows; financial markets |
| JEL: | E24 G11 J21 J22 J26 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlwp:98578 |
| By: | Axana Dalle; Toon Wybo; Stijn Baert; Dieter Verhaest (-) |
| Abstract: | In many countries, age discrimination appears to be driven by negative perceptions that recruiters stereotypically hold about older candidates’ technological skills, trainability, and flexibility. Based on human capital, signalling, and screening theories, we hypothesise that training programmes might both compensate for and mitigate these ageist stereotypes and thereby improve these candidates’ hiring chances. We test this pathway out of age discrimination by designing a scenario experiment in which professional recruiters assess the recruitability and human capital perceptions of fictitious candidates varying in age and (willingsness for) participation in apprenticeship training at older ages. Our results demonstrate that candidates indicating their (willingness for) participation in such training to obtain relevant work experience are more likely to be recruited than candidates without such experience, regardless of their age. Although apprenticeship training can compensate for age discrimination, it cannot mitigate this as the premium it yields is not higher for older workers. |
| Keywords: | Hiring discrimination, Older workers, Labour market programmes, Apprenticeships, Signalling, Scenario experiment |
| JEL: | J14 J24 J71 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:24/1092 |
| By: | Frédéric Gannon (EDEHN - Equipe d'Economie Le Havre Normandie - ULH - Université Le Havre Normandie - NU - Normandie Université, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Vincent Touzé (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Florence Legros (ICN Business School) |
| Abstract: | Une nouvelle réforme paramétrique du système de retraite a été adoptée sous le gouvernement Borne en avril 2023. Elle prévoit un recul de l'âge de la retraite reposant sur une mesure incitative d'accélération de la réforme Touraine de 2014 qui prévoyait déjà un allongement de la durée de cotisation (43 années de cotisation à partir de la génération née en 1965 au lieu de celle née en 1973) ainsi que sur une mesure contraignante de hausse de l'âge d'ouverture des droits (64 ans au lieu de l'actuel 62 ans). Si la réforme Borne 2023 s'inscrit dans la continuité de celle de Woerth 2010 (passage de 60 à 62 ans), elle inclut un volet social renforcé : l'âge du taux plein automatique reste fixé à 67 ans ; une surcote parentale a été ajoutée ; les dispositifs « carrières longues » demeurent ; la pension minimum est fortement revalorisée et le taux de non-recours au minimum vieillesse devrait diminuer en raison d'un relèvement important du seuil de patrimoine avant récupération sur héritage. Dans cet article, nous revenons sur les différents arbitrages financiers, économiques et sociaux qui ont pu orienter vers de tels choix et tentons de répondre à quatre questions : 1) La réforme était-elle urgente ? 2) L'âge est-il le seul paramètre d'ajustement acceptable ? 3) Quels sont les principaux points de vigilance ? 4) Que faire des excédents des régimes déjà à l'équilibre financier avant la réforme ? |
| Keywords: | système de retraite, réforme, âge de la retraite |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04626886 |
| By: | Mitsuru Katagiri (Hosei University); Takemasa Oda (Bank of Japan); Yasutaka Ogawa (Bank of Japan); Takeshi Shinohara (Bank of Japan); Nao Sudo (Bank of Japan) |
| Abstract: | It is generally believed that the demographic landscape affects the natural rate of interest and aggregate asset composition, such as money vs. real assets, by influencing household savings-investment behaviors. This article provides an overview of the insights of prior studies regarding the macroeconomic consequences of population aging and describes some of the quantitative implications derived from overlapping generations models. |
| Keywords: | Wage; Demographics; Household asset portfolio; Natural rate of interest; Deflation; Current account |
| JEL: | E21 E31 J11 |
| Date: | 2024–07–26 |
| URL: | https://d.repec.org/n?u=RePEc:boj:bojlab:lab24e01 |
| By: | Gemma Abio; Ció Patxot; Guadalupe Souto |
| Abstract: | Este artículo recoge resultados de distintos estudios realizados por las autoras, junto con otros investigadores, con el objetivo de medir los efectos externos que genera la existencia de un sistema de transferencias intergeneracionales como el sistema de pensiones, y del estado del bienestar en su conjunto. El motivo fundamental de la presencia de esta externalidad es que el sistema de pensiones financiado vía reparto socializa el contrato intergeneracional, y con ello asegura contra el hecho de no tener hijos. Este rasgo se extiende a otros programas del estado del bienestar que, de manera implícita, también se financian vía reparto. Como resultado, los hijos de una parte de los ciudadanos, criados en buena parte con sus recursos privados, generan una externalidad positiva a las personas que no tienen hijos. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:fda:fdaeee:eee2024-24 |
| By: | Gokben Aydilek (Department of Economics, Gebze Technical University); Deniz Karaoglan (Department of Economics, Gebze Technical University) |
| Abstract: | The emergence of COVID-19 required the Turkish government to implement various measures. Given a specific focus on the elderly as the high-risk population, seniors above 65 were imposed a strict curfew for a prolonged period. While social distancing measures are crucial for curbing the transmission, their unintended consequences, particularly on vulnerable populations, require exploration. This paper aims to analyse how those age-targeted restrictions affected the chronic health conditions of seniors, with a special focus on cardiovascular and metabolic diseases which are the main factors of mortality (e.g., coronary heart disease, chest pain, diabetes, obesity, etc). To address the potential bias arising from gender-specific mortality rates due to the pandemic, we focus exclusively on senior women. Employing a difference-in-differences (DiD) methodology, our results indicate that strict curfew on the elderly cause an escalation in chronic health problems. Morbidity of coronary heart diseases is notably higher among the affected women. In addition, they experience a significant increase in BMI and become more physically and mentally dependent in their daily lives. Highlighting the potential adverse effects of curfews on senior health, we emphasise the need for a more balanced strategy that prioritises both the control of the pandemic and the well-being of high-risk populations. |
| Keywords: | COVID-19, lockdown, health, elderly people, cardiovascular disease, metabolic disease, difference-in-differences |
| JEL: | I12 I18 |
| Date: | 2024–06–28 |
| URL: | https://d.repec.org/n?u=RePEc:geb:wpaper:2024-01 |
| By: | Caroline Klein; Jonathan Smith |
| Abstract: | The Danish labour market is strong, but tensions have increased since the pandemic. The post-pandemic recovery boosted labour demand, but structural factors, such as late labour market entry by the young, changing skills requirements and obstacles to the recruitment of migrants, contribute to persistent shortages and impact the wider economy. Lowering the effective tax rate on labour income could reduce disincentives to higher working hours and to moving from part-time to full-time employment. Adapting the workplace to an ageing population and adjusting early retirement schemes could help to extend working lives. Targeting the tenth grade to students with greater learning needs, reducing student allowances and introducing an income-contingent loan system for master’s students could also encourage faster entry into the labour market. There is room to increase the recruitment of foreign-born workers, as well as improving their integration. The demographic, digital and green transitions will transform jobs and skills requirements, demanding an agile education and training system throughout the working life. Encouraging vocational education and training, notably by facilitating mobility between vocational and academic tracks, would ensure strong skills in areas where workers are lacking. |
| Keywords: | Denmark, education, gender, labour market, migration, pension, skills, taxation |
| JEL: | I28 J16 J20 J24 J26 J60 M53 |
| Date: | 2024–07–25 |
| URL: | https://d.repec.org/n?u=RePEc:oec:ecoaaa:1811-en |
| By: | Guaitoli, Gabriele (University of Warwick); Pancrazi, Roberto (University of Warwick) |
| Abstract: | The widening income gap between older and younger individuals is a key topic in political and academic discussions. Research often focuses on labor earnings, neglecting other income sources and cross-country comparisons. This paper fills these gaps by analyzing disposable income trends in 2004-2018 across 32 countries using the Luxembourg Income Study Database. Key findings : (1) The age-income gap has increased in richer countries but decreased in poorer ones ; (2) Higher employment rates among older individuals drive this disparity in richer countries; (3) Increased female labor market participation mildly affected the employment margin, while rising education and later retirement did not. JEL Codes: E24, J31, O57 |
| Keywords: | Age group income ; growth decomposition ; income distribution ; cross-country comparison |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1504 |
| By: | Charles Yuji Horioka; Emin Gahramanov; Xueli Tang |
| Abstract: | The purpose of this paper is to conduct a theoretical and empirical analysis of the nexus between long-term care insurance (LTCI), formal care, informal (family) care, and bequests. In our empirical analysis, we use micro data from the Japan Household Panel Survey on Consumer Preferences and Satisfaction (JHPS-CPS), formerly known as the Preference Parameter Study, conducted by Osaka University. Japan is an interesting case to analyze because a public LTCI system was introduced there in 2000. Our analysis shows that, in the case of Japan, if parents are eligible for public LTCI benefits, their children will be less likely to be their primary caregiver and that this, in turn, will reduce their children’s perceived likelihood of receiving a bequest from them. This result implies that bequests are selfishly or strategically motivated (i.e., that parents leave bequests to their children in order to elicit care from them) and that the introduction of a public LTCI system will reduce the likelihood of children providing care to their parents and through this channel reduce their perceived likelihood of receiving a bequest from them. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1250 |
| By: | Didier Blanchet (IPP - Institut des politiques publiques); Vincent Touzé (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Didier Blanchet (CREST-INSEE - Centre de Recherche en Economie et en Statistique - Institut national de la statistique et des études économiques (INSEE)) |
| Abstract: | Trois arguments structurent traditionnellement le débat sur l'âge de la retraite : 1) l'idée que l'allongement de la durée de vie impose logiquement de le relever en proportion, 2) le fait que la pénibilité du travail plaide, à l'inverse, pour limiter cette hausse et 3) le fait que, au demeurant, on a longtemps su combiner élévation de l'espérance de vie et baisse du temps travaillé, et qu'il pourrait continuer d'en être ainsi. L'urgence environnementale introduit un quatrième argument semblant aller dans ce même sens. Si moins polluer impose de moins produire, il faut travailler moins plutôt que davantage. Mais cet argument de la sobriété est moins unilatéral qu'il n'en a l'air. Ce sont les énergies fossiles qui ont, en large part, permis le découplage passé entre espérance de vie et âge de la retraite : c'est en polluant plus qu'on a pu vivre mieux en travaillant moins. Peut-on se passer de ces énergies fossiles sans avoir à remobiliser davantage de travail ? Un modèle heuristique simple permet de mettre à plat les principaux éléments du débat. Le choix de l'âge de la retraite doit trouver le point d'équilibre entre des contraintes qui ne vont pas toutes dans le même sens. |
| Keywords: | âge de la retraite, productivité, longévité, pénibilité, transition climatique |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04626843 |
| By: | Naohisa Hirakata (General Manager, Niigata Branch, Bank of Japan (E-mail: naohisa.hirakata@boj.or.jp)); Mitsuru Katagiri (Associate Professor, Faculty of Business Administration, Hosei University (E-mail: mitsuru.katagiri@hosei.ac.jp)) |
| Abstract: | This paper investigates the role of foreign direct investment (FDI) in accounting for the long-term trend of capital flows under demographic changes. For this purpose, we incorporate horizontal FDI under the proximity-concentration trade-off into a two-country DSGE model and conduct a quantitative analysis using long-term Japanese data for capital flows since the 1960s. The quantitative analysis finds that the transition dynamics solely driven by demographic changes well account for the long-term trend of capital flows and that multinational firms' endogenous decision on FDI in response to population aging is key to explaining the long-term trend. |
| Keywords: | Capital flows, Demographic changes, Foreign direct investment (FDI) |
| JEL: | F12 F23 F32 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ime:imedps:24-e-05 |
| By: | PIETSCHMANN Ina; MAZZEO ORTOLANI Giovanna (European Commission - JRC) |
| Abstract: | This synthesis report stems from a joint International Labour Organization (ILO) and European Commission’s Joint Research Centre (JRC) project examining the impact of structural trends and the COVID-19 pandemic on labour market transitions, that is, the movements of individuals within and between employment, unemployment, and economic inactivity statuses. The studies analysed labour market transitions in European Union countries and selected non-EU countries in South Africa, Central and South America, and Asia, using different methodologies available. Focusing on less-explored study topics, such as transitions over the life course and old-age transitions, the research conducted under this project pillar reveals, for instance, that education is a pivotal factor influencing later-life transitions, challenging particularly vulnerable populations and women who face higher poverty risks. The COVID-19 analysis highlights scarring effects on labour market dynamics, especially for the most vulnerable, emphasising the need for continuous monitoring and targeted support for affected groups. The report underscores the complexity of methodologies used to analyse longitudinal data on individuals’ trajectories and data availability challenges, mainly in developing economies. In general, all studies summarised in the current report urge further research for comprehensive policymaking on labour market transitions in a fast-changing world, especially in high-impact areas like transitions out of informality and old-age workers’ movements within the labour market and into retirement. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc136461 |
| By: | Nicole Kapelle; Carla Rowold (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Background: Capturing the complexity of family life courses as predictors of later-life outcomes like wealth is challenging. Previous research has either (a) assessed a few selective but potentially irrelevant summary indicators, or (b) examined entire life course clusters without identifying specific important aspects within and between them. Objective: To investigate which family life-course variables—encompassing variables that capture the order, duration, and timing of states and transitions—are key personal wealth predictors for Western Germans aged 50 to 59. And analyse the strength and direction of associations between relevant variables and personal wealth, and whether these differ by gender. Methods: We used German Socio-economic panel study (SOEP) data and combined feature selection, sequence analysis tools, and regression techniques. Results: We identified 23 family life-course variables as relevant predictors, with two—the time spent never-married, both without and with children—deemed most relevant. Most family life-course variables were negatively associated with personal wealth and characterised by single parenthood, marital separation or early marital transitions with or without fertility transitions. The prevalence and significance of associations between these variables and personal wealth differed partly across genders. Results highlight the importance of previously concealed family life-course variables for wealth inequalities in late working age. Contribution: We extend previous research on the nexus between family demography and wealth stratification by using a novel, data-driven approach that more effectively explores family life-course complexities by considering the ‘entire’ universe of variables that describe such life courses and identifying those life-course variables that are relevant wealth predictors. |
| Keywords: | Germany (Alte Bundesländer), family life, gender, inequality, wealth |
| JEL: | J1 Z0 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2024-023 |
| By: | Xavier Ragot (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Vincent Touzé (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | L'année 2023 a été marquée par une nouvelle réforme des retraites. Cette réforme paramétrique portée par le gouvernement d'Élisabeth Borne fait suite à celle conduite par le gouvernement d'Édouard Philippe qui avait été suspendue puis abandonnée lors du précédent mandat présidentiel. Cette dernière se voulait systémique, mais son objectif de converger vers un système universel s'était heurtée à la nécessité de longues, et possiblement très coûteuses, transitions. Elle avait alors été jugée comme « très ambitieuse, extrêmement complexe et du coup porteuse d'inquiétude » (déclaration d'Emmanuel Macron, président de la République, 3 juin 2021). |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04626899 |
| By: | Bruno Ducoudré (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Éric Heyer (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | Notre étude utilise le modèle e-mod.fr de l'OFCE pour examiner les conséquences macroéconomiques à court et moyen termes d'une réforme du système de retraite en France. Après avoir présenté succinctement ce modèle néokeynésien, nous identifions les chocs macroéconomiques à simuler pour différents types de réformes : baisse des dépenses, hausse des recettes ou recul de l'âge de la retraite. Par la suite, nous évaluons l'impact macroéconomique de ces chocs et discutons des différents canaux de transmission (demande globale, coût de production, inflation et marché de travail). Enfin, nous analysons la sensibilité des résultats à la conjoncture ainsi qu'à l'élasticité de l'emploi à son coût et à la nature de l'ajustement des salaires (« wage setting » vs courbe de Phillips) |
| Keywords: | réforme des retraites, finances publiques, multiplicateur keynésien, inflation, chômage |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04626806 |
| By: | Maria Laura Miranda (Max Planck Institute for Demographic Research, Rostock, Germany); Cássio M. Turra; Ugofilippo Basellini (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | The COVID-19 pandemic has significantly increased mortality rates, disrupting historical trends and making it challenging to forecast future life expectancy levels. São Paulo, the first city in Brazil to report a COVID-19 case and death saw a decrease of over four years in life expectancy at birth for males and over three years for females between 2019 and 2021. São Paulo has been at the forefront of the demographic transition in the country and experienced a nonlinear mortality decline over the 20th century. The city's historical mortality trajectory and the disruptive effects of COVID-19 have introduced challenges to mortality forecasting. In this study, we used a unique dataset starting from 1920 to forecast life expectancy in São Paulo until 2050 using the Lee-Carter (LC) and Lee-Miller (LM) methods. Mortality rates were obtained from a combination of deaths gathered by the SEADE Foundation (SEADE) and population collected by the Brazilian Institute of Geography and Statistics (IBGE). To mitigate the dependency on the fitting period's choice and better incorporate the effects of the recent mortality shock, we used different baseline periods, using all years from 1920 to 1995 as the starting year of the analysis and six scenarios for post-pandemic mortality levels. Additionally, we used a simulation approach for the time-index parameter to calculate prediction intervals. Based on 73, 200 simulations for each year between 2023 and 2050, we synthesized the resulting life expectancy forecasts into median values and 95% prediction intervals (PI). By 2050, we predict that life expectancy at birth in São Paulo will reach approximately 81.5 years for men and 88.3 years for women. Also, within the 95% PI, we estimated that by 2045, male life expectancy could reach the levels of best-performing countries. Our approach is among the first attempts to forecast mortality in the presence of shocks. Additionally, by evaluating different baseline periods, we advocate for the adoption of more accurate forecasting strategies, particularly in contexts of recent mortality decline. These findings provide valuable resources for policymakers and researchers working to address public health challenges arising from the pandemic and plan for the future well-being of many populations. |
| Keywords: | Brazil |
| JEL: | J1 Z0 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2024-017 |