The economics of population ageing

The study explored income distribution among elderly in Kanchanaburi Province, Thailand. It based its analysis on relative income distribution by dividing population by income into 5 groups from highest 20% to lowest 20% where the first group represents those with highest incomes and the latter are those who have lowest incomes. The result shows that there is a significant number of people who have reported themselves of working/having jobs/being employed but turned out to have no income. The investigation was carried out further and found that among these people, the majority participate in household economic activities and share income with other family members. Others may possibly have other sources of finance that are not related to work e.g. the Elderly allowance from the Government, remittances from children or pension etc. The findings can be concluded that most elderly in Kanchanaburi province are able to support themselves with different sources of income.

In Mexico a small proportion of the elderly is covered by pensions and a large number receive an insufficient pension. The question is how people survive into old age. Independent of whether or not they are pensioned, an option is working. The results of the Population Census 2010 show that 30.6% of the individuals aged 60 or older participate in the labor market. Our main objective in this paper is to review which factors are determinants of the labor force participation of elderly in Mexico. Based on the Census data we estimate a logistic regression model, separately for the three age groups (60-64, 65-74 and 75+). In the three age groups our main results show that men are more likely to participate in the labor market; and have a pension and a disability reduce the likelihood of participation. But, the marginal effects of these variables decrease in the last groups.

This paper presents estimates of the system of intergenerational transfers in Nigeria in 2004 and 2009. This necessitated identifying the surplus age range in the economic lifecycle and whether there were changes over the two periods. Based on the lifecycle deficit (LCD), options for intergenerational transfer to finance the deficit were examined within the context of social protection in Nigeria. The methodological framework utilised in this paper was motivated by the National Transfer Accounts methodology. The process of estimating the age profile of consumption and income formed the basis for the economic lifecycle deficit(LCD) equation in the model. Our estimates used the 2004 and 2009 National Income and Product Account data of Nigeria. Data were obtained from 2004 National Living Standard Survey and the 2009 Harmonised Living Standard in Nigeria. The paper revealed the structure of intergenerational transfers in 2004 and 2009 band how these were used in financing lifecycle deficit. In general, LCDs are financed through age reallocations. The implications of government and familial transfers in financing deficits of the children and the elderly were examined within the context of social protection policies and programs in Nigeria.

In the Czech Republic population ageing is becoming a serious problem at the labor market, financial stability, pension system, health and social care. Before principal changes in the pension system are prepared and confirmed, some parametrical changes have been introduced since 1994 till 2011. One of the fundamental changes is prolongation of retirement age (without any stopping rule) and different prolongation for males and females. It has significant consequences to dependency ratios and other indicators. Unlike the calculation with fixed limits, where the total dependency ratio gradually grows, the scenario referred to as ‘REAL’ does not seem as negative as it is often described. In this case, the TDR ranges between 1.67 and 1.84 in the basic version. This calculation should support wide discussions regarding the pension system and its reform. In 2060, a person of economically active age should support himself/herself and another 0.84 individuals of economically inactive age.

CO-AUTHORS: Tomas Fiala, Jitka Langhamrova, Jindrich Klufa

This paper investigates how Indonesian public transfers contributes to the well being of the elders and how the new social security system will be sustained in the future. It discusses to what extent existing government support reaches the elderly poor and meets their consumption needs. The results show that how the elderly finance their retirement differs by income level, that the elderly poor in both rural and urban areas rely heavily on public transfers, and that they use public cash transfers to support other household members as well as themselves. The analysis of Generational Accounting also shows that with the same scheme, in which public transfers only covers their 80% consumption, tax adjustment as much as 7% is needed in 2020 from the current level.
Alternate scheme that follow the commitment at Law on Social Security System considers higher coverage on health insurance, particularly for the poor families. If public transfers are higher to comply with the social security requirement, tax adjustment needed is about 13% in 2020 and increase to 16% and 19% in 2030 and 2040. General imbalance is increase to 26%. However, this adjustment does not consider other component of social security that considered as public transfers.

One aspect of the expected negative economic consequences of population aging in Europe is based on the anticipated shrinkage of the labor force. However, a smaller but more productive labor force might be able to alleviate some of these expected consequences of population aging. Using data from the European Labor Force Survey, I project the economically active population for 26 EU-countries up to 2053 by age, sex, and highest level of educational attainment. Adding the education dimension has an effect on the absolute size of the projected labor force – due to significant heterogeneity in participation across education categories – and allows inferences about the composition of the labor force beyond the common projection dimensions age and sex. The results show that the European labor force – besides being older and “more female” – is projected to be composed of people that are significantly higher educated than today.

Nearly half of the India’s elderly population (50+ years) are engaged in productive work either in formal or informal sectors. In the absence of any social security measures, most elderly are forced to work for themselves and their families. There is a severe shortage of reliable data in India, thus posing severe challenges to go in-depth in this dimension. Using the recently available nationally representative SAGE survey in India (sponsored by WHO), this paper analyses the levels and determinants of elderly labour force participation and its influence on access to healthcare. The sample covers about 10,000 households across six states of India. Contrary to the popular notion that poor elderly is a burden; the study found that they contribute significantly to the income of the household. Aged are not only working with low wages but are engaged in unhealthy and hazardous occupation which will have bearing on their health status. While in accessing private health care services in comparison to public health care multinomial estimation shows place of residence, sex, education and wealth quin-tile to be significant factors. The findings of the study argue for better employment avenues, safer working conditions and health insurance policies for senior citizens.

In Japan due to the rapid population aging and its large financial pressure on pay-as-you-go retirement systems, the economic impact of bequest wealth has been drawing a tremendous amount of attention. Despite that, there are neither official statistics on bequest for the whole population nor analyses of the historical evolution of bequest. Our study fills this gap by offering an estimate of bequest in Japan from 1850 to 2100, based on a computable general equilibrium model with realistic demography. Our model shows that the historical evolution of the bequest-to-output ratio follows the same U-shaped pattern described by Piketty(2011) for France. Moreover, we estimate that the annual flow of bequest represented between 4% and 6% of output in the year 2000 and it is expected to reach between 7% and 13% of the output by year 2100.

Managing plentiful labour force efficiently is a challenging task for the transitional economies but shortfall creates problem in developed world. India, with a huge bulk of younger population, is going to produce a huge supply of labour force in coming decades. Utilizing three rounds of NSSO data during 1999-2009 on Employment and Unemployment Survey and scientifically projected population based on 2001 Census, the present paper has explored likely scenario of labour force in India and its 21 major states. The entry and exit rate method for synthetic cohort, developed by OECD has been applied for projection of labour force. The LFPR among women in India is much lower among females compared to males and likely to increase among females but will remain stagnant among males till 2051. Female LFPR will decline among youths and will increase rapidly in the late adulthood. This seems to be a serious policy concern.

The objective is to discuss the contradictions and the impact on poverty reduction of the Brazilian policies aimed to replace elderly income.
Brazilian Government has made great advances in ensuring a minimum income to the elderly population. However, these policies have some contradictions. One of them
is that individuals are fulfilling the conditions for retirement too young considering that life expectation has increased and health conditions have improved. So, they receive pensions but keep working. Another one is that women start to get the benefit earlier than men. This takes place in despite of them have a higher life expectation.
It cannot be denied that these policies have fulfilled an important role in reducing poverty among the elderly. Nevertheless, it is argued that better living standard for them has brought about income inequalities among the age groups. But the nature of the two benefits is quite different. The benefit for non-elderly persons aims to take off poor individuals from this situation and to give them conditions for entering in the labor market. Its value cannot be high in order not to disincentive them to look for a job, On the other hand, the social assistance benefit for elderly population is target to a very poor group, which has certainly lost the conditions to generate their own income