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on Economics of Ageing |
| By: | Axel H. Börsch-Supan; Johannes Rausch; Luca Salerno |
| Abstract: | Germany, like many other countries, has undergone a series of pension reforms since the 1980s which generally decreased benefit generosity and increased the retirement age due to demographic pressures. This paper investigates whether these reforms have increased income and wealth inequality among retirees. In order to answer this question, we employed counterfactual simulations in which we predict how the income and social security wealth distributions would have developed if these reforms had not taken place, compared to the actual development of the income and social security wealth distributions. Our analysis reveals that the pension reforms has led to an increase in inequality in terms of social security wealth between the 1990s and 2000s and decreased inequality thereafter. The decrease in inequality is mainly driven by social assistance as it represents a lower bound for benefit size and thus mitigates the effect of benefit-reducing reforms for lower income groups. We further divided the total effect of the pension reforms into two components. The first component is the mechanical effect, which keeps retirement probabilities constant and only considers changes in benefit calculation. The second component is the behavioral effect, which describes how SSW differs because of altered retirement probabilities. Our findings indicate that in the German context the behavioral effect is statistically significant but economically small. |
| JEL: | H55 J23 J26 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32796 |
| By: | Cristina Belles-Obrero; Sergi Jiménez-Martín; Han Ye |
| Abstract: | This paper studies the mortality effect of delaying retirement by investigating the impacts of the 1967 Spanish pension reform, which affected the general population and exogenously changed the early retirement age, depending on the date individuals started contributing to the pension system. Using the Spanish administrative data, we find that delaying retirement by one year increases the hazard of dying between the ages of 60 and 69 by 38 percent. We show that the reform leads to higher mortality in all subgroups, and the effects are statistically stronger for those employed in sectors with the highest workplace accidents and for those with low self-value jobs. Moreover, we show that allowing flexible retirement mitigates the adverse effects of delaying retirement. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:fda:fdaeee:eee2024-27 |
| By: | de Bresser, J.;; Knoef, M.;; van Ooijen, R.; |
| Abstract: | There is rising interest in combined insurance products to finance long-term care (LTC) and retirement income. We analyze the market for life care annuities, which combine life annuities and LTC insurance, and examine how reverse mortgages can extend the accessibility of these retirement finance products. These combined products offer several benefits, such as reducing adverse selection, enabling consumption smoothing, and enhancing financial well -being at advantaged ages, while not breaking the role of housing as a savings commitment. To explore the preferences for combined products, we conducted a discrete choice experiment in a large representative household panel in the Netherlands, including individuals aged 40 to 66. We found that 40% would want to buy LTC-only annuities – which pay out between 500 and 1250 euros per month when having LTC needs – at market prices regardless of whether the payment vehicle is a monthly premium or a reverse mortgage. Reverse mortgages as a mode of payment increases the desired demand for more expensive life care annuities by 8 %-points. Further, the accessibility of life care annuities increases considerably when home equity can be used as a funding source. |
| Keywords: | long-term care; life care annuities; reverse mortgages; discrete choice experiment; saving motives; health expectations; |
| JEL: | D14 I13 J14 J18 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:yor:hectdg:24/11 |
| By: | Maira Colacce (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Julia Córdoba (Universidad de la República (Uruguay). Facultad de Psicología); Alejandra Marroig (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Graciela Muniz-Terrera (Ohio University); Guillermo Sánchez-Laguarda (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | This paper addresses the geographical differences in the prevalence of dependency in older adults and its differences by demographic characteristics (gender and age) within and across countries. We estimate internationally comparable dependency indicators for 31 countries in 4 continents with available information on help requirements in Activities of Daily Living for people aged 65 and older. The main indicator includes three activities: bathing, eating, and dressing. The highest level of dependency is found in Israel (18.5%) and the lower in Switzerland (5.5%). Dependency rates are almost always higher for women than for men, but sex differences only appear in people aged 80+ and statistically country differences blur for those aged 65-79. Our analysis supports the male-female survival paradox for dependency. The differences found in the prevalence regarding the family of surveys is a strong argument for the international harmonization of the formulation of the dependency questions. |
| Keywords: | activities of daily living, need for help, SHARE, HRS, ageing measures |
| JEL: | I10 C89 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:ulr:wpaper:dt-03-24 |
| By: | Martina Börsch-Supan; Karen Andersen-Ranberg; Nis Borbye-Lorenzen; Jake Cofferen; Rebecca Groh; Hannah M. Horton; Elizabeth Kerschner; Thu Minh Kha; Alan Potter; Daniel Schmidutz; Kristin Skogstrand; Aijing Sun; Luzia Weiss; Mark H. Wener; Axel H. Börsch-Supan |
| Abstract: | SHARE, the “Survey of Health, Ageing and Retirement in Europe”, is a large population-based panel survey among people aged 50 and over with data from 28 European countries and Israel. It investigates individual, economic, health-related, and social life-course circumstances in order to shed light on the challenges of population aging for individuals and society as a whole. Understanding aging per se, and how we age differently over the life course given our individual backgrounds, current health, and socio-economic factors, are the aims of SHARE. In order to maintain intertemporal, international and intercultural comparability, SHARE has adopted collection of objective data in the health domain. SHARE measures physical performance, such as grip strength, peak expiratory flow, walking speed, chair stand, word recall, and Euro-D depression among others in the physical, cognitive and mental health modules. In 2015, SHARE collected dried blood spot (DBS) samples as an additional objective measure of health. Eleven European countries and Israel participated in the DBS collection. The collection was harmonized in terms of designing documents, gaining consent, procuring blood-collection material, and training interviewers how to collect DBS samples while observing the national ethic and administrative regulations in all countries. Altogether, approximately 27, 200 respondents consented, resulting in an overall participation rate of 67% with considerable differences between countries and interviewers. This report describes the carefully monitored processes of gaining consent for DBS collection and for the implementation, collection and evaluation of the to-date largest DBS-based study of a representative adult population in Europe. We also describe the choice of blood biomarkers, the assays employed to determine the blood biomarker concentrations in DBS collected in the home of survey respondents and the validation and adjustment of the laboratory results for the impact of sample collection in a non-medical environment. Finally, we present the data obtained for seven out of 17 blood biomarkers. The data for the remaining ten biomarkers analyzed at the Statens Serum Institut will follow in a separate release. |
| JEL: | I1 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32764 |
| By: | Singh, Yadawendra (CM College, Darbhanga); Chakraborty, Lekha (National Institute of Public Finance and Policy) |
| Abstract: | Against the backdrop of demographic transition in India, the study highlights the necessity of integrating the elderly population as a critical factor in formula-based intergovernmental fiscal transfers. The demographic transition, characterized by an increasing elderly population, imposes unique fiscal challenges on states, necessitating a revision of transfer formulas to ensure equitable and efficient resource distribution. The paper employs a historical analysis of fiscal devolution criteria, and analysing the impact of incorporating the elderly population into the devolution formula on the share of states in the total tax transfer to states. The findings indicate that integrating the elderly population into the tax devolution formula can significantly alter the distribution of resources among states, with states having higher shares of elderly populations benefiting more. The study recommends that there is a need to consider demographic changes by incorporating the share of elderly population to working age population ratio as a criterion by the Sixteenth Finance Commission to promote a more equitable and efficient allocation of resources. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:npf:wpaper:24/417 |
| By: | Stefano Castaldo (University of Padova) |
| Abstract: | I study household investment decisions to shed light on how people approach and plan for retirement. To address this topic I exploit a particular institutional context. In Italy, private and public sector employees receive a lump sum upon retirement. This exogenous shock to liquidity presents an opportunity to see how people re-balance their portfolios for retirement. Studying data from the Survey on Household Income and Wealth (SHIW) in the period 1993-2016, and comparing people marginally above and below the labor pension eligibility threshold, I find that new retirees increased investments in stocks and in housing. This result is determined by the receipt of the liquidity infusion and is robust to testing against a number of alternative explanations, including stock market entry costs and the increase in leisure time. These results suggest that newly retired have a long-term investment horizon. |
| Keywords: | household investment decisions, retirement |
| URL: | https://d.repec.org/n?u=RePEc:pad:wpaper:0313 |
| By: | Breen, Casey |
| Abstract: | The Black-White mortality crossover is well-studied demographic paradox. Black Americans experience higher age-specific mortality rates than White Americans throughout most of the life course, but this puzzlingly reverses at advanced ages. The leading explanation for the Black-White mortality crossover centers around selective mortality over the life course. Black Americans who survived higher age-specific mortality risk throughout their life course are highly selected on robustness, and have lower mortality than White Americans in late life. However, skeptics argue the Black-White mortality crossover is simply a data artifact from age misreporting or related data quality issues. We use large-scale linked administrative data (N = 2.3 million) to document the BlackWhite mortality crossover for cohorts born in the early 20 th century. We find evidence the crossover is not a data artifact and cannot be uncrossed using sociodemographic characteristics alone. |
| Date: | 2024–08–23 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:ax9u3 |
| By: | Adam Bloomfield; Lucas Goodman; Manita Rao; Sita Slavov |
| Abstract: | Several states have recently attempted to boost retirement saving by adopting “auto-IRA” policies that require employers not currently offering an employer-sponsored retirement plan (ESRP) to either (1) establish an ESRP or (2) enroll employees in state-facilitated Individual Retirement Accounts (IRAs). We identify the effect of these state retirement plan mandates on firm decisions to offer ESRPs, treating the gradual rollout of these policies across states and employer size categories as a series of “experiments.” Using U.S. tax microdata, we estimate that at least 30, 000 firms have been induced to offer an ESRP by these policies, although there is substantial heterogeneity in these effects across firm and worker characteristics. This effect is large considering that, for employers, establishing and maintaining an ESRP is more costly than utilizing the state-facilitated IRAs. We explore both rational and behavioral explanations for why firms might choose the higher-cost approach to complying with auto-IRA policies. |
| JEL: | D14 H75 J26 J32 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32817 |
| By: | Margherita Borella; Francisco A. Bullano; Mariacristina De Nardi; Benjamin Krueger; Elena Manresa |
| Abstract: | While health affects many economic outcomes, its dynamics are still poorly understood. We use k means clustering, a machine learning technique, and data from the Health and Retirement Study to identify health types during middle and old age. We identify five health types: the vigorous resilient, the fair-health resilient, the fair-health vulnerable, the frail resilient, and the frail vulnerable. They are characterized by different starting health and health and mortality trajectories. Our five health types account for 84% of the variation in health trajectories and are not explained by observable characteristics, such as age, marital status, education, gender, race, health-related behaviors, and health insurance status, but rather, by one’s past health dynamics. We also show that health types are important drivers of health and mortality heterogeneity and dynamics. Our results underscore the importance of better understanding health type formation and of modeling it appropriately to properly evaluate the effects of health on people’s decisions and the implications of policy reforms. |
| JEL: | I1 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32799 |
| By: | R. Anton Braun; Karen A. Kopecky |
| Abstract: | Nursing home risk is significant and costly. Yet, most Americans pay for long-term care (LTC) expenses out-of-pocket. This chapter examines reforms to both public and private LTCI provision using a structural model of the US LTCI market. Three policies are considered: universal public LTCI, no public LTCI coverage, and a policy that exempts asset holdings from the public insurance asset test on a dollar-for-dollar basis with private LTCI coverage. We find that this third reform enhances social welfare and creates a vibrant private LTCI market while preserving the safety net provided by public insurance to low-income individuals. |
| Keywords: | Long-term care insurance; Medicaid; adverse selection; partnership program |
| JEL: | D82 D91 E62 G22 H30 I13 |
| Date: | 2024–08–14 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedcwq:98684 |
| By: | Miao Guo (Hunan University); Yang Li (University of Nottingham Ningbo China); Minghao Wu (China Life Insurance Company Ltd.); Terence C. Cheng (Harvard T.H. Chan School of Public Health & Monash University) |
| Abstract: | This study analyzes the effects of China’s long-term care insurance (LTCI) benefit design on household consumption and intergenerational support. The program provides two benefit options: in-kind benefits (or services) and cash allowances. We introduce a conceptual framework to analyze economic decision making under the two types of LTCI benefits. Using an empirical framework that exploits variations in LTCI benefit designs across China’s pilot cities, we find that both types of LTCI benefits increase household consumption and reduce medical expenditure. Specifically, ‘mixed’ benefits households – those with a choice between in-kind and cash benefits – significantly increase spending on food and housing, while households receiving services spend more on housing, transport, and clothing. Additionally, in-kind benefit recipients report receiving lower informal care from their children, implying a substitution with formal care. Households with mixed benefits experience a decline in financial support from children, suggesting a crowding-out of intergenerational transfers. Finally, we estimate income and sub-stitution effects that are implicit in recipients’ behavior to analyze welfare implications under China’s LTCI. |
| Keywords: | Long-term Care Insurance, Benefit Design, In-kind Benefits, Cash Benefits, Household Consumption |
| JEL: | I11 I13 I18 D10 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:mhe:chemon:2024-13 |
| By: | Keisuke Kokubun |
| Abstract: | As the aging of the world accelerates, clarifying the relationship between cultural differences and ageism is an urgent issue. Therefore, in this study, we conducted a correlation analysis between the six cultural scales of Hofstede et al. [1] and the 10 ageism scales calculated from data on 35, 232 people from 31 countries included in the World Values Survey Wave 6 by Inglehart et al. [2]. The results of a partial correlation analysis controlling for economic and demographic factors showed that the cultural scales were correlated with ageism. This is the first study to show that diverse cultural scales are related to multiple dimensions of ageism. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2408.04781 |
| By: | Marie Plessz (CMH - Centre Maurice Halbwachs - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - Département de Sciences sociales ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres, INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Séverine Gojard (CMH - Centre Maurice Halbwachs - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - Département de Sciences sociales ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres, INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | Plusieurs définitions d'une bonne alimentation coexistent dans l'espace public, faisant concurrence aux normes nutritionnelles diffusées par la santé publique. Par ailleurs, les enjeux de santé sont particulièrement prégnants pour les personnes âgées, il est donc important d'analyser leur alimentation au regard des prescriptions auxquelles elles se conforment. Pour le vérifier, des sociologues de l'alimentation ont analysé l'alimentation de 10000 volontaires de la cohorte épidémiologique Gazel, de 50 à 75 ans. L'alimentation de ces volontaires révèle trois définitions différentes d'une bonne alimentation, qui peut être une alimentation conforme aux normes nutritionnelles, ou facile à préparer et à apprécier, ou encore conforme aux normes culinaires traditionnelles françaises. L'orientation de l'alimentation vers l'une ou l'autre de ces trois dimensions dépend du sexe et du diplôme et se modifie au cours du vieillissement. |
| Keywords: | Alimentation -- Aspect social, Vieilissement, Séniors |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04651749 |