In the absence of social security reform, current pension entitlements of an aging population exceed future fiscal capacity. However, structural labor market reforms facilitate the transition to ...sustainable schemes in which a sizeable part of the current generosity of European welfare states can be maintained. In fact, many European states have already taken important steps in this direction. In the end insufficient productive capacities to support the welfare state pose smaller challenges to reform than do time inconsistencies built into the political process of redesigning pension plans.
This article uses the Survey of Health, Ageing and Retirement in Europe (SHARE) to investigate the role of pension and social security institutions in shaping the European patterns of work and ...retirement. The key novelty of our article is a careful account of the health status of the respondents. We provide new evidence on the extent of health-adjusted ‘unused capacity’ in the labour force, on the institutional determinants of the pathways to retirement, and on the relationship between actual health status and disability-benefit recipiency. We find that institutional differences between countries explain much of the cross-national differences in work and retirement, while differences in health and demographics play only a minor role.
Population aging in the United States poses challenges to societal institutions while simultaneously creating opportunities to build a more resilient, successful, and cohesive society. Work ...organization and labor-force participation are central to both the opportunities and challenges posed by our aging society. We argue that expectations about old age have not sufficiently adapted to the reality of aging today. Our institutions need more adaptation in order to successfully face the consequences of demographic change. Although this adaptation needs to focus especially on work patterns among the "younger elderly," our society has to change its general attitudes toward work organization and labor-force participation, which will have implications for education and health care. We also show that work's beneficial effects on well-being in older ages are often neglected, while the idea that older workers displace younger workers is a misconception emerging from the "lump-of-labor" fallacy. We conclude, therefore, that working at older ages can lead to better quality of life for older people and to a more productive and resilient society overall.
This keynote speech draws three broad lessons to turn the challenges of population ageing into chances: Lesson number one is that the quantity effects of adding more labour into our ageing economies ...are very large. To exploit them, one has to use the entire spectrum of labour market policies: earlier labour market entry, later retirement age, higher female labour force participation, and lower unemployment. Lesson number two is that there is a positive and enforcing effect of pension reform. A pension regime that alleviates the tax burden of the younger generation creates higher productive capacity. The third lesson is on behavioural effects. Some strengthen reform but they are dominated by opposition effects, such as taking advantage of loopholes, withdrawal of labour supply, or simple within-household substitution. Negative behavioural effects can be minimised by informing people better about the chances and challenges of population ageing, and by de-mystifying false beliefs about ageing.
We build a simple model of reforms and reform backlashes into an overlapping generations model which is extended to the multi-country situation typical for Europe. As a particular feature of our ...model, we add the distinction between exogenous labor supply components – representing the key results of labor market and pension reform – and endogenous labor supply components – representing household reactions to those reforms and possible reform backlash.
•Population aging requires major pension and labor market reforms.•We model a mixture of exogenous and endogenous labor supply.•The exogenous part reflects reforms of pension and labor markets.•The endogenous part reflects resistance to those policies.•Maintaining current living standards requires overcoming such resistance.
Welfare state interventions shape our life courses in almost all of their multiply linked domains. In this introduction, we sketch how cross-nationally comparative retrospective data can be ...fruitfully employed to better understand these links and the long-run effects of the welfare state at the same time. We briefly introduce SHARE, the Survey of Health, Ageing and Retirement in Europe, and SHARELIFE, which collected 30,000 life histories of SHARE respondents from 14 European countries, providing a unique data infrastructure for interdisciplinary research on the various influences of contextual structures on the lives of Europeans during the last century until today. The eight studies in this special issue show that the multidisciplinary cross national approach of SHARELIFE allows a much more detailed understanding of life histories in Europe than was possible before.
While the population age structure will continue to vary from country to country, this century will see a considerably higher proportion of older people worldwide. As a macroeconomic result, labor ...will become scarcer & capital more abundant, which will increase the price of labor, result in higher capital intensity, & conceivably generate flows of capital from faster to slower aging countries. Microeconomically, changes in the age composition of the reduced labor force could impact labor productivity, & the elderly will come to represent a larger proportion of consumers & savers, which will affect capital & goods markets. How demographic change will affect the wealth of nations & whether public policy can mitigate the gains & losses are two core questions addressed in this chapter's analysis of the major economic challenges & opportunities posed by global aging. Tables, Figures, References. S. Stanton
In response to population aging, pay-as-you-go pensions are being reduced in almost all developed countries. In many countries, governments aim to fill the resulting gap with subsidized private ...pensions. This paper exploits the recent German pension reform to shed new light on the uptake of voluntary, but heavily subsidized private pension schemes. Specifically, we investigate how the uptake of the recently introduced ‘Riester pensions’ depends on state-provided saving incentives, and how well the targeting at families and low-income households works in practice. We show that, after a slow start, private pension plans took off very quickly. While saving incentives were effective in reaching parents, they were less successful in attracting low-income earners, although Riester pensions exhibit a more equal pattern by income than occupational pensions and unsubsidized private pension plans. We also provide circumstantial evidence on displacement effects between saving for old-age provision and other purposes. Households who plan to purchase housing are less likely to have a Riester pension. The same holds for households who attach high importance to a bequest motive. Occupational pensions and other forms of private pensions, however, act as complements rather than as substitutes.
Health and disability insurance Börsch-Supan, Axel
Journal for Labour Market Research,
11/2011, Letnik:
44, Številka:
4
Journal Article
Recenzirano
Odprti dostop
Disability insurance - the insurance against the loss of the ability to work - is a substantial part of social security expenditures in many countries. The benefit recipiency rates in disability ...insurance vary strikingly across European countries and the US. This paper investigates the extent of, and the causes for, this variation, using econometric analyses based on new data from SHARE, ELSA and HRS. We show that even after controlling for differences in the demographic structure and health status these differences remain. This holds for a broad set of objective and subjective physical and mental health measures as well as for contemporal, intertemporal and life-course specifications of health, including measures of childhood health. In turn, indicators of disability insurance generosity explain 75% of the cross-national variation. We conclude that it is not health but the country-specific design of early retirement and labor market institutions, and especially disability insurance rules, which explain the observed cross-country variation in the receipt of disability benefits.
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