IDEAS home Printed from https://ideas.repec.org/p/sip/dpaper/08-062.html
   My bibliography  Save this paper

Adjusting Government Policies for Age Inflation

Author

Listed:
  • Gopi Shah Goda

    (Stanford Institue for Economic Policy Research, Stanford University)

  • John Shoven

    (Stanford Institue for Public Policy Research, Stanford University)

Abstract

Government policies that are based on age do not adjust to changes in remaining life expectancy and lower mortality risk relative to earlier time periods due to improvements in mortality. We examine four possible methods for adjusting the eligibility ages for Social Security, Medicare, and Individual Retirement Accounts to determine what eligibility ages would be today and in 2050 if adjustments for mortality improvement were taken into account. We find that historical adjustment of eligibility ages for age inflation would have increased ages of eligibility by approximately 0.15 years annually. Failure to adjust for mortality improvement implies the percent of the population eligible to receive full Social Security benefits and Medicare will increase substantially relative to the share eligible under a policy of age adjustment.

Suggested Citation

  • Gopi Shah Goda & John Shoven, 2008. "Adjusting Government Policies for Age Inflation," Discussion Papers 08-062, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:08-062
    as

    Download full text from publisher

    File URL: http://www-siepr.stanford.edu/repec/sip/08-062.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Victor R. Fuchs, 2018. "“Though Much Is Taken”: Reflections on Aging, Health, and Medical Care," World Scientific Book Chapters, in: Health Economics and Policy Selected Writings by Victor Fuchs, chapter 33, pages 403-424, World Scientific Publishing Co. Pte. Ltd..
    2. Eric French, 2005. "The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behaviour," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(2), pages 395-427.
    3. Kenneth Manton & Kenneth Land, 2000. "Active life expectancy estimates for the U.S. elderly population: A multidimensional continuous-mixture model of functional change applied to completed Cohorts, 1982–1996," Demography, Springer;Population Association of America (PAA), vol. 37(3), pages 253-265, August.
    4. Auerbach,Alan J. & Lee,Ronald D. (ed.), 2001. "Demographic Change and Fiscal Policy," Cambridge Books, Cambridge University Press, number 9780521662444.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Barslund, Mikkel Marten von Werder & von Werder, Marten, 2016. "Measuring ageing and the need for longer working lives in the EU," CEPS Papers 11349, Centre for European Policy Studies.
    2. Zou, Tieding, 2017. "延迟退休的制约因素、政策效果与动态研究方法评价 [Restriction, Policy Effect and Dynamic Research Method to Delay Retirement]," MPRA Paper 85556, University Library of Munich, Germany, revised 30 Jan 2018.
    3. Carstensen, Laura L. & Reynolds, Megan E., 2023. "Age differences in preferences through the lens of socioemotional selectivity theory," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    4. Mikkel Christoffer Barslund & Marten von Werder, 2016. "Measuring dependency ratios using National Transfer Accounts," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 14(1), pages 155-186.
    5. repec:agr:journl:v:4(605):y:2015:i:4(605):p:309-320 is not listed on IDEAS
    6. W. Heeringa & A. Bovenberg, 2012. "Generational Impacts of Demographic Changes in Pay-as-you-go Pension Schemes: Measurement and Application to the Netherlands," De Economist, Springer, vol. 160(1), pages 1-16, March.
    7. Callan, Tim & Keane, Claire & Walsh, John R., 2009. "Pension Policy: New Evidence on Key Issues," Research Series, Economic and Social Research Institute (ESRI), number RS14.
    8. Andreea Claudia ȘERBAN & Mirela Ionela ACELEANU, 2015. "Current Demographic Trends – A New Challenge for the Labour Market," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(605), W), pages 309-320, Winter.
    9. Jin Hu & Peter-Josef Stauvermann & Surya Nepal & Yuanhua Zhou, 2023. "Can the Policy of Increasing Retirement Age Raise Pension Revenue in China—A Case Study of Anhui Province," IJERPH, MDPI, vol. 20(2), pages 1-15, January.
    10. Willem Heeringa & A.L. Bovenberg, 2009. "Stabilizing pay-as-you-go pension schemes in the face of rising longevity and falling fertility: an application to the Netherlands," DNB Working Papers 220, Netherlands Central Bank, Research Department.
    11. Narciso, Alexandre, 2010. "The impact of population ageing on international capital flows," MPRA Paper 26457, University Library of Munich, Germany.
    12. Social Policy and Population Section, Social Development Division, ESCAP., 2011. "Asia-Pacific Population Journal Volume 26, No. 3," Asia-Pacific Population Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 26(3), pages 1-84, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John B. Shoven, 2008. "Adjusting Government Policies for Age Inflation," NBER Working Papers 14231, National Bureau of Economic Research, Inc.
    2. Gopi Shah Goda & John Shoven, 2009. "New Age Thinking: Alternative Ways of Measuring Age, Their Relationship to Labor Force Participation, Government Policies and GDP," Discussion Papers 08-056, Stanford Institute for Economic Policy Research.
    3. John Ameriks & Joseph Briggs & Andrew Caplin & Minjoon Lee & Matthew D. Shapiro & Christopher Tonetti, 2020. "Older Americans Would Work Longer If Jobs Were Flexible," American Economic Journal: Macroeconomics, American Economic Association, vol. 12(1), pages 174-209, January.
    4. John B. Shoven, 2007. "New Age Thinking: Alternative Ways of Measuring Age, Their Relationship to Labor Force Participation, Goverment Policies and GDP," NBER Working Papers 13476, National Bureau of Economic Research, Inc.
    5. Maria Casanova-Rivas, 2008. "Dynamic Complementarities: A Computational and Empirical Analysis of Couples' Retirement Decisions," 2008 Meeting Papers 1073, Society for Economic Dynamics.
    6. Aylit T. Romm, 2012. "Retirement Date Effects on Pre-Retirement Wealth Accumulation: An Analysis of US Households," Working Papers 266, Economic Research Southern Africa.
    7. Allais, Olivier & Leroy, Pascal & Mink, Julia, 2020. "Changes in food purchases at retirement in France," Food Policy, Elsevier, vol. 90(C).
    8. Charles Hokayem & James P. Ziliak, 2014. "Health, Human Capital, and Life Cycle Labor Supply," American Economic Review, American Economic Association, vol. 104(5), pages 127-131, May.
    9. Peter Haan & Victoria Prowse, 2010. "A structural approach to estimating the effect of taxation on the labour market dynamics of older workers," Econometrics Journal, Royal Economic Society, vol. 13(3), pages 99-125, October.
    10. Tajul Masron & Mduduzi Biyase & Talent Zwane & Thomas Udimal & Frederich Kirsten, 2023. "Ecological footprint and population health outcomes: an analysis of E7 countries," Economics Working Papers edwrg-07-2023, College of Business and Economics, University of Johannesburg, South Africa, revised 2023.
    11. Johan Gustafsson, 2021. "Age-Targeted Income Taxation, Labor Supply, and Retirement," CESifo Working Paper Series 8988, CESifo.
    12. Eric French & John Bailey Jones, 2017. "Health, Health Insurance, and Retirement: A Survey," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 383-409, September.
    13. Svetlana Pashchenko & Ponpoje (Poe) Porapakkarm & Mariacristina De Nardi, 2017. "The Lifetime Costs of Bad Health," 2017 Meeting Papers 533, Society for Economic Dynamics.
    14. Hugo Benítez-Silva & Eva Cárceles-Poveda & Selçuk Eren, 2011. "Effects of Legal and Unauthorized Immigration on the U.S. Social Security System," Working Papers wp250, University of Michigan, Michigan Retirement Research Center.
    15. Martin Flodén, 2006. "Labour Supply and Saving Under Uncertainty," Economic Journal, Royal Economic Society, vol. 116(513), pages 721-737, July.
    16. Richard Blundell & Jack Britton & Monica Costa Dias & Eric French, 2023. "The Impact of Health on Labor Supply near Retirement," Journal of Human Resources, University of Wisconsin Press, vol. 58(1), pages 282-334.
    17. Hugo Benitez-Silva & Moshe Buchinsky & John Rust & Emine Boz & Joseph B. Nichols & Sharbani Roy & Ignez Tristao, 2005. "Health Status, Insurance, and Expenditures in the Transition from Work to Retirement," Department of Economics Working Papers 05-11, Stony Brook University, Department of Economics.
    18. Jaimes, Richard & Westerhout, Ed, 2023. "Optimal policies in an ageing society," The Journal of the Economics of Ageing, Elsevier, vol. 26(C).
    19. Haan, Peter & Prowse, Victoria L., 2010. "The Design of Unemployment Transfers: Evidence from a Dynamic Structural Life-Cycle Model," IZA Discussion Papers 4792, Institute of Labor Economics (IZA).
    20. d'Albis, Hippolyte & Collard, Fabrice, 2011. "Age Groups and the Measure of Population Aging," LERNA Working Papers 11.05.339, LERNA, University of Toulouse.

    More about this item

    Keywords

    Social Security; inflation; Medicare; Individual Reditrement Accounts;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sip:dpaper:08-062. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anne Shor (email available below). General contact details of provider: https://edirc.repec.org/data/cestaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.