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on Demographic Economics |
| By: | Hotchkiss, Julie L. (Federal Reserve Bank of Atlanta); Moore, Robert E. (Georgia State University); Rios-Avila, Fernando (Levy Economics Institute); Trussell, Melissa R. (Georgia State University) |
| Abstract: | The female/male average wage ratio has steadily risen from 1983 to 2012. In earlier work, we found that the falling wage gap from 1983 to 1993 was materially detrimental to the average dual-earner family. The female/male wage ratio continued to rise over the following two decades, accompanied by a growing share of households in which the wife is the principal household income generator. This paper investigates how these two developments affected family welfare. Although family welfare rose during the 1990s, the story of the 2000s is quite different. |
| Keywords: | joint labor supply; family utility; micro-simulation |
| JEL: | D19 I30 J22 |
| Date: | 2014–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2014-26&r=dem |
| By: | Raquel Fonseca; Arie Kapteyn; Jinkook Lee; Gema Zamarro |
| Abstract: | Continued improvements in life expectancy and fiscal insolvency of public pensions have led to an increase in pension entitlement ages in several countries, but its consequences for subjective well-being are largely unknown. Financial consequences of retirement complicate the estimation of effects of retirement on subjective well-being as financial circumstances may influence subjective well-being, and therefore, the effects of retirement are likely to be confounded by the change in income. At the same time, unobservable determinants of income are probably related with unobservable determinants of subjective wellbeing, making income possibly endogenous if used as control in subjective wellbeing regressions. To address these issues, we estimate a simultaneous model of retirement, income, and subjective well-being while accounting for time effects and unobserved individual effects. Public pension arrangements (replacement rates, eligibility ru les for early and full retirement) serve as instrumental variables. We use data from HRS and SHARE for the period 2004-2010. We find that depressive symptoms are negatively related to retirement while life satisfaction is positively related. Remarkably, i ncome does not seem to have a significant effect on depression or life satisfaction. This is in contrast with the correlations in the raw data that show significant relations between income and depression and life satisfaction. This suggests that accounting for the endogeneity of income in equations explaining depression or life satisfaction is important. |
| Keywords: | Well-being, retirement, institutions, simultaneous equation approach |
| JEL: | I3 J26 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:criacr:1409&r=dem |
| By: | Mauro Mastrogiacomo; Rob Alessie |
| Abstract: | Survey data show that many respondents save for retirement in unconventional retirement accounts, such as investments in real estate. In countries where retirement savings are not mandatory for self-employed, representatives of this group often report this as an argument against making retirement savings compulsory. Our study shows that self-employed retirement savings are low and below individually pre-stated saving intentions, even though this group has generally no occupational pension. We also study the relation between the importance of a broad spectrum of saving motives, such as saving for retirement, and saving behavior. We show that finding the retirement motive important does not directly translate in additional retirement savings, both for self-employed and employees. The (median) annuity stream generated by conventional and unconventional accounts from age 67 is small; most savings are residual and are not being put aside for a specific motive. |
| Keywords: | retirement savings; precautionary savings; factor analysis; saving goals |
| JEL: | D12 D91 E21 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:454&r=dem |
| By: | David W. Brown; Amanda E. Kowalski; Ithai Z. Lurie |
| Abstract: | We examine the long-term impact of expansions to Medicaid and the State Children's Health Insurance Program that occurred in the 1980's and 1990's. With administrative data from the IRS, we calculate longitudinal health insurance eligibility from birth to age 18 for children in cohorts affected by these expansions, and we observe their longitudinal outcomes as adults. Using a simulated instrument that relies on variation in eligibility by cohort and state, we find that children whose eligibility increased paid more in cumulative taxes by age 28. These children collected less in EITC payments, and the women had higher cumulative wages by age 28. Incorporating additional data from the Medicaid Statistical Information System (MSIS), we find that the government spent $872 in 2011 dollars for each additional year of Medicaid eligibility induced by the expansions. Putting this together with the estimated increase in tax payments discounted at a 3% rate, assuming that tax impacts are persistent in percentage terms, the government will recoup 56 cents of each dollar spent on childhood Medicaid by the time these children reach age 60. This return on investment does not take into account other benefits that accrue directly to the children, including estimated decreases in mortality and increases in college attendance. Moreover, using the MSIS data, we find that each additional year of Medicaid eligibility from birth to age 18 results in approximately 0.58 additional years of Medicaid receipt. Therefore, if we scale our results by the ratio of beneficiaries to eligibles, then all of our results are almost twice as large. |
| JEL: | H2 I1 I38 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20835&r=dem |
| By: | Max Groneck; Frederic Krehl |
| Abstract: | Informal care of children for their frail elderly parents may induce parents to compensate their children for their help. To test this hypothesis, we use the Exit Interview from the Health and Retirement Study. Our results show that caregiving has a significant positive impact on the incidence and the amount of received bequests both at the extensive and intensive margin of help. Three pieces of evidence suggest exchange motives rather than altruism to be the main source for this outcome. First, financially more well off children are more likely to receive an inheritance. Second, we find that a positive impact of help on bequest requires a written will as a contract between the parent and the helping child. Third, our results are even more pronounced when employing a fixed effects model to control for family altruism. |
| Keywords: | Intergenerational Transfers, Strategic Bequest Motive, Informal Long-term care, Altruism |
| JEL: | D13 D19 J14 |
| Date: | 2014–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:kls:series:0079&r=dem |
| By: | Coral del Río; Olga Alonso-Villar |
| Abstract: | The aim of this paper is twofold: a) to explore the evolution of occupational segregation of women and men of different racial/ethnic groups in the U. S. during the period 1940- 2010 and b) to assess the consequences of segregation for each of them. For that purpose, this paper proposes a simple index that measures the monetary loss or gain of a group derived from its overrepresentation in some occupations and underrepresentation in others. This index has a clear economic interpretation. It represents the per capita advantage (if the index is positive) or disadvantage (if it is negative) of the group, derived from its segregation, as a proportion of the average wage of the economy. Our index is a helpful tool not only for academics but also for institutions concerned with inequalities among demographic groups because it makes it possible to rank them according to their segregation nature. |
| Keywords: | occupational segregation; local segregation; race; ethnicity; gender; wages; U.S. |
| JEL: | J15 J16 J71 D63 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:vig:wpaper:1405&r=dem |