In the first chapter, I study whether sending children to college affects the contemporaneous labor supply of their parents. I use data on the retirement behavior of parents and their children's college enrollments from the Health and Retirement Survey and show that parents do delay retirement when they are paying for their children to attend college. Mothers and fathers are more likely to be working, less likely to be collecting Social Security benefits, and less likely to report that they are retired if they are currently paying for the college education of a child. For those who continue working, I find little evidence of any impact on work intensity. For fathers, the pattern of effects is consistent with a model of precautionary savings.
Aging populations place significant pressure on policy makers in rich and poor countries alike, especially as they contemplate publicly funded old-age support programs. My dissertation explores the economic behaviour of the elderly in three different countries, under three quite different institutional settings for the support of the elderly. The core chapters focus on the experience of the elderly in Taiwan, a middle-income country that recently adopted a modern public pension system. I also examine retirement behaviour in rural China, where there is no public pension scheme, and the economic outcomes of elderly immigrants to Canada---a country at the other end of income spectrum. In the last chapter, Michael Baker, Dwayne Benjamin, and I investigate the efficacy of the combination of Canadian public policies aimed at minimizing the extent to which elderly immigrants collect age-related public transfers. In our empirical analysis we compare immigrants' and natives' income sources, highlighting trends in public transfers received by the elderly from 1981 to 1997. We find that elderly immigrants are relatively dependent on provincially funded social assistance over their first ten years upon arrival, and thereafter they substitute towards OAS/GIS benefits. Also exploiting the FPP in Taiwan, chapter 3 explores additional welfare implications of publicly funded pensions, focusing on the "income effect" associated with the additional pension income, and interpreted in the light of differential responsiveness of consumption to income sources that vary by stability. Using private income as the baseline, the estimated "marginal propensity to consume" out of pension income is around 0.85, significantly higher than the counterpart estimate for private income---around 0.33. A further examination suggests that more risk-averse households appear to make less consumption out of private income---a result that highlights the role of income uncertainty in household consumption. In Chapter 4, joint work with Dwayne Benjamin and Loren Brandt, we evaluate the modern empirical content of the metaphor---"ceaseless toil"--Used by Davis-Friedmann (1991) to describe the retirement pattern in rural China before early 1980s: lacking sufficient means of support, the elderly had to work their entire lives. Our analysis centres around the role of age and deteriorating health in retirement decisions. The empirical results suggest that "ceaseless toil" is a reasonable depiction of elderly Chinese work patterns since economic reform, but failing health only plays a small observable role in predicting declining labour supply over the life-cycle. In Chapter 2 I address a key question regarding the major welfare connotation of publicly financed pensions: when a pensioner receives a dollar of benefit, does his/her income go up by the full amount? To answer this question, I examine private responses to public pensions, focusing on the displacement of private inter-household transfers---a traditional channel for adult children to support elderly parents---by pension income. Using the introduction of the Taiwan Farmers' Pension Program (FPP) as a "quasi-experiment," the empirical results from multiple identification strategies consistently imply that one dollar of pension income "crowds out" around 25 cents of private transfers received by the elderly. The partial (less than dollar-for-dollar) replacement rate implies that the pension benefits are shared by the recipients and their adult children, who would otherwise make more transfers to their elderly parents.
For over a decade, the National Bureau of Economic Research has sponsored the Economics of Aging Program, under the direction of David A. Wise. The program addresses issues that affect the well-being of individuals as they age and a society that is composed increasingly of older people. Within the next twenty years, an unprecedented proportion of Americans will be over sixty-five. New research in the economics of aging is an essential element of understanding what the future holds for this aging population. Inquiries in the Economics of Aging presents both empirical papers that consider questions that are fundamental to public policy and more theoretical contributions that lay new groundwork for future research in the economics of aging. Inquiries in the Economics of Aging provides a timely overview of some of the most important questions facing researchers on aging and outlines new techniques and models that may help to answer these questions. This important volume will be of great interest to specialists and policy makers as it paves the way for future analysis.
Economic analysis of patterns of employment, leisure and income, and their allocation through the lifespan according to age, with emphasis on retirement - includes a comparison of labour force activity, work life, hours of work and wages by age group in developed countries, and examines consumer expenditure and savings needs for retirement by occupational structure, and the incomes policy implications of financing old age benefits in the USA. References and statistical tables.
The original essays and commentary in this volume—the third in a series reporting the results of the NBER Economics of Aging Program—address issues that are of particular importance to the well-being of individuals as they age and to a society at large that is composed increasingly of older persons. The contributors examine social security reform, including an analysis of the Japanese system; present the startling finding that the vast majority of people choose the wrong accumulation strategies for their pension plans; explore the continuing consequences of the decline in support of parents by children in the postwar period; investigate the relation between nursing home stays and the source of payment for the care; and offer initial findings on the implications of differences between developed and developing countries for understanding aging issues and determining appropriate directions for research.
