Chapter
Chapter 1: The Global Demography of Aging: Facts, Explanations, Future
2.1. Trends and Projections
2.2. Reliability of Population Projections
3. The Demographic Transition and Population Aging
3.1. The Historic Demographic Transition
3.2. The Ongoing Demographic Transition in Developing Countries
4. The Demographic Determinants of Population Aging
4.1. Decline in Fertility
4.1.1. Theoretical Framework
4.1.2. Developed Countries
4.1.2.1. The Cost of Children
4.1.2.2. The Role of Education
4.1.2.3. The Accessibility of Birth Control
4.1.2.4. The Baby Boom and Bust
4.1.3. Developing Countries
4.1.3.1. The Decline in Child Mortality
4.1.3.2. Anticipated Future Support from Children
4.1.3.3. Contraceptives and Family Planning Programs
4.1.3.5. The Impact of Social Media
4.1.4. The Future of Fertility
4.2. Increase in Life Expectancy
4.2.1. Developed Countries
4.2.2. Developing Countries
4.2.3. The Future of Mortality
4.3. Migration as a Determinant of the Age Structure
5.1. The Rise of Noncommunicable Diseases
5.1.1. The Prevalence and Economic Costs of Dementia
5.1.2. The Risk Factors of NCDs and Policy Implications
5.2. The Question of Compression or Expansion of Morbidity
5.3. Living Arrangements for the Elderly
5.3.1. Developed Countries
5.3.2. Developing Countries
6. Open Research Questions
Part II: Economic Impacts of Population Aging
Chapter 2: Macroeconomics, Aging, and Growth
3. Population Aging, Dependency, and Redistribution of Income Across Generations
5. The Changing Age Pattern of Consumption
6. Population Aging and Economic Growth in Comparative Steady States
8. International Comparisons of Support Systems for Elderly
9. Population Aging and Capital Market Equilibrium with Transfers
11. Dynamic Analysis of Population Aging
12. Special Topics on Population Aging, Saving, and Capital Intensification
12.1. Population Aging and Saving: Will Saving Rates Decline?
12.2. The Role of PAYGO Transfers, Public and Private, Implicit Debt, Asset Accumulation, and Capital Intensity
12.3. Public Sector Transfers
12.4. Open and Closed Economies in an Aging World
12.5. Will Population Aging Cause an Asset Price Meltdown?
12.6. How Much Population Aging Is Optimal?
13. Population Aging and Human Capital Intensification
14. Aging and Productivity Growth
14.1. Age and Productivity of Workers
14.2. Endogenous Growth and Population Aging
15. Political Economy of Population Aging and the Public Sector
17.1. Fertility, Mortality, and Possibly Health Status
17.2. Intergenerational Transfers
17.5. Technological Progress and Endogenous Growth
Chapter 3: Migration and the Demographic Shift
2. Trends in Population Aging and International Migration
3. Age and Migration: Supply-and-Demand Framework
3.1. Theoretical Determinants of Migration: Supply-Push and Demand-Pull Factors
3.2. Age and Migration: Empirical Studies with Individual Data
3.3. Age and Migration: Empirical Studies with Aggregate Data
3.4. Changing Migration Patterns: Mobility of the Elderly and Demand for Eldercare
4. Aging and Migration: Implications for Labor Markets, Public Budgets, and Political Economy
4.1. Aging, Migration, and Labor Markets
4.2. Aging, Migration, and Public Budgets
4.3. Aging, Migration, Welfare, and Political Economy Aspects
4.4. Aging and Individual Attitudes Toward Immigrants
5. Migration, Aging, and Health
Chapter 4: Global Demographic Trends: Consumption, Saving, and International Capital Flows
Part I. The Overlapping Generations Model
2. The Auerbach and Kotlikoff (1987) Model
2.1 Steady States and Transitions
2.2 Market Structure and Intergenerational Links
2.3 OLG Models and Demographic Trends
3. Extensions to the Model and Methodological Challenges
3.1 Expectations of Demographic Trends and Institutional Arrangements
3.2 Heterogeneity Within Cohorts
3.3 Aggregate and Idiosyncratic Uncertainty
3.4 Moving Away From the Simplest Preferences: Labor Supply and Habits
4. Demographic Trends and Savings
Part II. A Multiregion Model of the World Economy
5. Demographic Data and Projections
6.1.4 Household Preferences
6.1.5 Household Endowments
6.1.6 Household Budget Constraint
6.1.7 Government Budget Constraint
6.1.8 Commodities, Assets, and Markets
7.3 Technological Parameters
7.4 Demographic Parameters
7.5 Preferences and Endowments Parameters
7.6 Government Policy Parameters
8.2 Alternative Scenarios in Low-Income Region
8.2.1 Fast Productivity Convergence
8.2.2 Fast Convergence in Longevity in Low-Income Region
8.2.3 Investment Risk in Low-Income Region
8.2.4 Additional Experiments
Chapter 5: Insurance Markets for the Elderly
2. Risks Faced by the Elderly
2.1.1. Job Displacement and Labor Income Risks
2.1.2. Investment Income Risks
2.1.4. Decline of Defined Benefit Pension Plans
2.2. Health and Health Expenditure Risks
2.3. Longevity/Mortality Uncertainty
2.4. Morbidity/Long-Term Care Risks
3.1. Health Insurance Market
3.1.1. US Health Insurance System for the Elderly
3.1.1.3. Employer Coverage for Retirees
3.1.1.4. Medicare Supplemental Insurance
3.1.2. Health Insurance Reform in the United States
3.1.3. Health Insurance System in Other OECD Countries
3.2. Annuity Insurance Market
3.2.1. Theory of the Demand of Annuities
3.2.2. Under-Annuitization Puzzle and Its Solutions?
3.2.2.1. Information Problems in Annuity Insurance Market
3.2.2.2. High Loadings of Annuities
3.2.2.4. Behavioral Explanations
3.3. Life Insurance Market
3.3.1. Front-Loaded Premiums and Reclassification Risk Insurance
3.3.2. Life Settlement Market and Its Welfare Effects
3.3.3. Why Do Life Insurance Policyholders Lapse?
3.4. Long-Term Care Insurance Market
3.4.1. Basic Facts of Long-Term Care Arrangements
3.4.2. Why Is the Private LTC Insurance Market so Small?
3.4.2.1. Informational Barriers in the LTC Insurance Market
3.4.2.2. Strategic Rational Nonpurchase
4. Interactions Between Social Insurance and Private Insurance Programs
4.1. Medicaid and Long-Term Care Insurance
4.2. Medicare and Private Health Insurance
4.2.1. Medicare and Medigap
4.2.2. Medicare and Medicare Advantage
4.2.3. Medicare and Employer-Sponsored Health Insurance
4.2.4. Medicaid and Medicaid Managed Care
5. Summary and Directions for Future Research
5.1. Interaction Between Insurance Markets and Labor Markets
5.2. A Portfolio Approach to Households Insurance Demands
5.3. Insurer-Side Risks and Regulation
Chapter 6: Intergenerational Risk Sharing
2. Intergenerational Risk Sharing and Aging
2.1. Types of Risks and Potential for Risk Sharing
2.2. Distinguishing Risk Sharing from Redistribution
2.3. Limits to the Scope of This Chapter
2.4. The Role of Population Aging
3. Intergenerational Risk Sharing Under Various Settings
3.1. The Closed Endowment Economy
3.2. Intertemporal Smoothing
3.3. The Production Economy
4. Pension Arrangements in the Market Economy
4.1. General Features of the Market Economy
4.2. Classification of Pension Arrangements
4.3. Retirement Arrangements
4.4. Individual and Firm Decisions
4.5. Macroeconomic Equilibrium
5.1. IRS in Stylized Pension Arrangements
5.1.2. Notional Defined Contribution Schemes
5.1.3. Funded Pension Schemes
5.1.4. Discussion of Demographic Risks
5.1.5. Aging and the Role of Factor Prices
5.2. Optimal Pension Arrangements for IRS
5.2.1. Special Case: Period t Is the Final Period
5.2.2. Generational Accounting
5.2.3. An Infinite Horizon
5.2.4. Links to the Literature
6. Alternative Channels for IRS
6.1. Informal Arrangements for IRS
6.2. IRS Through Public Debt and Taxes
6.3. Further Channels for IRS
7. Practical Limitations to IRS
7.1. Long-Run Correlation of Wage and Capital Risks
7.2. Labor Market Distortions and IRS
7.3. Participation Constraints
7.4. Political Commitment
7.5. Budgetary Pressures, Fiscal Constraints, and Reversibility Risk
7.6. Further Complications in Putting Theory to Practice
8. Quantification of the Welfare Gains from IRS
8.1. Measuring the Welfare Gains from IRS
8.2. Complications in Measuring the Welfare Gains
8.3. Introducing or Changing a PAYG Social Security Scheme
9.2. Aging and Pension Reform
9.2.1. Raising the Retirement Age
9.2.2. The Introduction of DC Funded Pillars
9.2.3. The Introduction of NDC Schemes
9.2.4. Recent Changes in the Pension Reform Agenda
9.3. Flexibility, Mobility, and the Width of the Solidarity Circle
9.4. Dealing with the Consequences of Changes in Accounting Rules
9.5. The Role of Supervision
9.6. Building Confidence, Transparency, and Fairness
9.7. Reform of Health and Long-Term Care Financing
9.8. The Importance of Combining Risk-Sharing Arrangements
10. Literature Gaps and Directions for Further Research
Chapter 7: The Political Economy of Population Aging
1.1. The Political Challenges of Population Aging
1.1.1. Facts on Aging, and Political Consequences
1.1.2. Policies at Stake with Aging
1.2. Features of Social Security Systems and Recent Reforms
1.2.1. Features of Social Security Systems
1.2.1.1. Funded Defined-Contribution System
1.2.1.2. Funded Defined-Benefit System
1.2.1.3. Unfunded Defined-Benefit System
1.2.1.4. Unfunded Defined-Contribution System
1.2.1.5. Pension Benefits and Eligibility
1.3. Contribution of This Chapter and Outline
1.3.1. Contribution of This Survey
2. Why Individuals Support PAYG Social Security
2.1. Dynamic Inefficiency
2.2. Reduced Time Horizon
2.2.2. Population Aging in the Browning Model
2.3. Effect of Social Security on Prices
2.4. Within Cohort Redistribution
2.4.1. Individually Optimal Tax Rates
2.4.2. Variation of the Optimal Tax Rates with the Wage Level
2.4.3. Majority Voting Tax Rate
2.4.4. Effect of a Drop in the Fertility Rate
2.4.5. Myopic Individuals
2.4.6. Other Dimension of Individual Heterogeneity: Differing Life Expectancies
3.1. Implicit Taxation and Early Retirement
3.1.1. The Political Support for Early Retirement Provisions
3.1.2. The Implicit Taxation on Continued Activity
3.2. Voting on the Retirement Age
3.2.1. One-Dimensional Voting
3.2.1.3. Aggregation of Preferences Through Majority Voting
3.2.1.4. Population Aging
3.2.2. Joint Determination of the Retirement Age and the Contribution Rate
4.1. Sustainability of the PAYG System
4.2. Dynamics of the Political Equilibrium
4.3. Markov Perfect Equilibria
4.3.1. A Median Voter Model with Capital as the State Variable
4.3.2. Probabilistic Voting
4.3.3. The Evolution of Retirement
5. The Transition to a Fully Funded System
6.1. Empirical Estimations
6.2. Simulating the Future Political Evolution of Social Security
6.2.1. Political Sustainability and the Evolution of the Contribution Rates for the Current Systems
6.2.2. Political Sustainability with Endogenous Retirement Age
7. The Political Impact of Aging on Other Public Programs
7.1. Aging and Political Support for Education
7.1.1.1. With Education Only
7.1.1.2. Joint Education and Social Security
7.1.2. Empirical Evidence
7.1.2.1. Empirics with Education Only
7.1.2.2. Empirics with Several Public Programs
7.1.2.3. Surveys of Voter Preferences
7.2. Aging and Support for Health Care
7.3. Aging and Long-Term Care
7.4. Aging and the Environment
7.5. Capital vs Labor Taxes
Handbook of the Economics of Population Aging
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