The
AGE RTN Inaugural Conference was held in Copenhagen, on 3-5 October 2002, at the
Palace Hotel and organized by the Centre of Applied Microeconometrics (CAM), The programme and the
papers presented are available at CAM
(University of Copenaghen).
The Inaugural Conference focused on the economic decisions of the elderly, and
namely on redistributive policies, intergenerational transfers, retirement,
saving, portfolio choice and health expenditures.
The
Conference had four sessions and had papers presented by young researchers and
network participants. The first session started on the 3rd of October
2002 at 12:00 pm and lasted until 5:00 pm, was chaired by Arie Kapteyn (RAND)
and hosted four papers. Andre Masson (Delta-CNRS and ENS) presented the first
paper in this session, “Altruism,
exchange or indirect reciprocity: What do the data on family transfers show?” and
argued that inter-vivos transfers between family members may be due to either
“altruism” or to “exchange”, or to precautionary saving motivations when
the time of death is uncertain. In his paper “Redistributive
policies through taxation: Theory and evidence”, Christos Koulovatianos
(University of Cyprus) noted that increasing marginal tax rates and making
payments to the poor reduce inequality but introduce savings dis-incentives. The
quality of primary health care ought to have an impact on health outcomes. By
exploiting the substantial variability in the quality of public health care
between Italian regions, this is investigated by Mario Padula (CSEF, University
of Salerno) in the third paper presented in this session, “The quality of health care: Theory and evidence”. Akiko
Suwa-Eisenmann (INRA) presented the last paper in this session, “Why
a rise in wealth ownership did not accompany growth? A puzzle of `primary'
inequality using French data (1800-1940)”. The paper studies the level and
distribution of wealth among French individuals by looking at historical records
on bequests.
The
second session took the 4th of October morning, from 9:00 to 12:00,
had three papers presented and was chaired by Mike Hurd (RAND). Martin Junge
(University of Copenhagen) presented the first paper in this session, “A
structural model of early retirement”. This paper derives a model of early
retirement and estimates it on Danish data. The study by Muriel Roger (INRA) is
on “The impact of the 1990's French
reform on farmers retirement decisions” and
examines the effects of the French Government's reform of the farming sector
in 1990. The presenter noted that the reform induced different changes in the
social security wealth of farmers living in different rural areas, thus
providing a “natural experiment” in which the impact of reform on behavior
can be analyzed using individual data. The last few decades decline of the
participation rate of older workers coupled with the population ageing is cause
of concern amongst policy makers and challenges the sustainability of the
current system. This is the topic of “Changes
in retirement behavior of older workers in Italy”,
the last paper of this session, presented by Margherita Borella (University
of Venice and CeRP).
The
third session of the Inaugural Conference took the afternoon of the 4th
of October 2002 and was chaired by Agar Brugiavini (University of Venice).
Michael Haliassos (University of Cyprus) presented the first paper of this
session, documented the current state of stock ownership among households for
France, Germany, Italy, the Netherlands, Sweden, and the UK in “Household stockholding in Europe: Where do we stand and where do we
go?” and compared the European experience with the US. In
“Portfolio choice with correlated background risk: Theory and evidence”,
Hector Calvo Pardo (DELTA,CNRS-EHEESS-ENS) showed that if the background risk is
negatively correlated with the asset in the portfolio, then it is rational for
the agent to increase holdings off the risky asset. The effect of interest rate
subsidies on the demand for mortgages in Portugal is investigated by Ernesto
Villanueva (Universitat Pompeu Fabra) in the last paper presented in this
session, “The impact of mortgage
interest rate subsidies on the demand for long-term debt”.
The
last session of the Inaugural Conference took the 5th of October
morning and was chaired by James Banks (IFS,UCL). Susann Rohwedder (RAND)
presented the first paper of the session, “New
evidence on the retirement savings puzzle”, and argued that the decline of
consumption after retirement can be due to the cessation of work-related
expenses and the substitution of home production for market-purchased goods and
services. The distribution of bequests is investigated by James Smith (RAND) in
the paper “Expected bequests and their
distribution”, which uses information on the subjective probability of
bequests and shows that the distribution of bequests is highly skewed and that
the typical baby-boomer will receive a very modest inheritance. Axel Börsch-Supan
(Mannheim Inst. Aging), in “The SAVE
survey: Household saving in Germany” raised four issues: if government
saving schemes encourage saving, especially among low income people; how saving
is related to the demographic profile of the population, how saving affects
growth; and how pension reforms can possibly affect both compulsory and
voluntary savings. Finally, Charles Grant (European Universtity Institute)
discussed how to empirically identify which households are credit constrained
when all that is observed is the households level of debt. In the paper “Estimating
credit constraints among US households” he defined an agent as
credit-constrained if he wants to borrow, but banks restrict their lending and
provided evidence on the main determinants of credit constraints in the US.
