Old-age Consumption Research Articles

Association between milk consumption in middle age and frailty in later life: The Aichi Workers' cohort study.

Several studies have shown that dairy consumption in old age is effective in preventing frailty. However, there is a lack of evidence regarding the association between milk consumption during middle age and the development of frailty in old age. Therefore, we carried out an investigation to explore the association between milk consumption during middle age and development of frailty examined after over 15 years of follow up in a long-term cohort study in Japan. We studied 265 participants aged 60-79 years (212 men and 53 women) in 2018, who participated in both the baseline survey in 2002 and the frailty assessment in 2018. The amount of milk consumption (g/day) at baseline was age- and energy-adjusted, and classified into three categories (no, low and high consumption: 0 g/day, ≤135.86 g/day, >135.86 g/day in men and 0 g/day, ≤126.44 g/day, >126.44 g/day in women). Odds ratios (OR) and 95% confidence intervals (CI) for prefrailty/frailty after adjusting for lifestyles at baseline, stratified by sex, were estimated using logistic regression analysis. The prevalence of prefrailty/frailty in 2018 was 37.7% and 28.3% in men and women, respectively. Milk consumption categories were inversely associated with the prevalence of prefrailty/frailty in men (OR 0.34, 95% CI 0.14-0.84 in low consumption; OR 0.31, 95% CI 0.10-0.95 in high consumption; P < 0.05), but not in women (OR 0.53, 95% CI 0.11-2.65; P = 0.44). In this study, milk intake in middle-aged men was inversely associated with the prevalence of prefrailty/frailty later in life. Geriatr Gerontol Int 2024; 24: 700-705.

Explaining factors contributing to alcohol consumption among elderly men: a qualitative study

ABSTRACT Background With an increase in the elderly population, there is a greater need to pay attention to the problems of this group. This study aims to determine the influencing factors on alcohol consumption in elderly men. Methods In this qualitative design, data were collected on 31 men older than 65 years and with at least mild dependence on alcohol using semi-structured interviews. The participants in the study were chosen using purposive and snowball sampling methods. The content analysis approach was used to analyze the data. Results The data analysis revealed two main categories: (1) trigger events with two sub-categories of internal (beliefs about achieving goals, alcohol use experience in youth, desire to drink alcohol, low self-esteem) and external factors (peer connectedness, availability of alcohol, family member’s alcohol consumption, allowed to consume at home, having a reasonable price, participating in events) and (2) reinforcing events with two sub-categories of physical (having physical pain, sleep problem, increase the effect of drugs, fatigue) and psychological factors (enhancing mood, coping with stress, feeling alone, depression, anxiety, sense of emptiness, recent bereavements). Conclusions It is possible to prevent excessive consumption of alcoholic beverages and related complications by identifying the factors that initiate and enhance alcohol consumption in old age.

Unconditional cash transfers, health and savings

This paper examines the relationship between a national unconditional cash transfers (UCTs) program, health and savings. We theoretically and empirically show that motives to save can be strong when cash transfers promote health outcomes. We first present a theoretical model that considers lifecycle-consumption savings decisions, where households derive utility from consumption and leisure time at working age, as well as old-age consumption and old-age longevity that positively depend on health spending. We then empirically examine the impact of Pakistan’s Benazir Income Support Programme on various indicators of savings and provide suggestive evidence on how UCTs influence savings via health. We find that in the short and medium term, UCTs increase the probability that a household decides to save and have significant positive effects on the rates and amounts of household savings. The effects of UCTs are more pronounced on informal compared to formal savings. The results present exploratory and suggestive evidence that health is a mechanism through which UCTs transmit to savings. These findings are consistent with our theoretical predictions.

Can fiscal incentives to saving alleviate looming old-age poverty?

Abstract We develop a general equilibrium overlapping generations framework with incompletely rational individuals to study old-age saving incentives. Such incentives are used worldwide to help achieve the high savings rate required to sustain sufficient consumption in old age. We show that they raise the welfare of financially illiterate individuals and those with a high degree of time inconsistency. They also reduce the incidence of poverty in old age. We further quantify the fiscal cost, crowd-out, and ability to target the transfers to individuals who need the most. Given the high prevalence of these schemes, our paper has broad policy implications.

The optimal delayed retirement age in aging China: Determination and impact analysis

Facing a deepening aging population, nations like China are calling for a gradually delayed retirement policy urgently. Based on the dynamic model of Miyazaki (2014), this paper first examines the difference between the agent's labor productivities in youth and old age (the age difference in labor productivity as defined below). We then establish an agent's optimal consumption model under the background of delayed retirement, and derive formulas to calculate the steady-state output per labor, wage rate, and rate of capital return. Based on the model, we propose a formula to determine the optimal delayed retirement age, which can optimize the government's delaying retirement policy. Moreover, we provide theoretical demonstrations and perform numerical simulations about how delayed retirement ages affect key variables such as the agent's optimal consumption and steady-state output per labor in the context of deepening population aging, and further analyze how the Chinese government determines the optimal delayed retirement age. Results are as follows: Firstly, extending the delayed retirement age will reduce the agent's optimal youth consumption, but increase the agent's optimal old-age consumption, life-time consumption, and the total consumption of economy in the current period. Secondly, the aging population problem is affected by both changes in the birth rate and the survival probability. From 2020 to 2100, the former is constantly declining in China, while the latter is gradually rising. Although these two drivers have different influences on the optimal delayed retirement age, the influence of a higher survival probability is greater, so aging postpones the optimal delayed retirement age in China. Thirdly, the degree of population aging and the agent's labor productivity of the elderly are two main factors affecting the optimal delayed retirement age. Although both factors present an increasing trend from 2020 to 2100, they have opposite implications: the former dominates the latter until 2075 and increases the optimal delayed retirement age. On the other hand, the inhibitory effect of the latter gradually increases and eventually dominates the former from 2075. Fourthly, under the cross influence of the above two factors, the optimal delayed retirement age in China shows an inverted U-shaped trend of rising initially and then decreasing after reaching the peak in 2075. Fifthly, we estimate that if the delayed retirement policy is adopted from 2025, it is reasonable to set the average annual delayed retirement time to two to three months. Finally, we propose measures and suggestions to mitigate the possible negative impacts of delayed retirement.

Renewable resource and harvesting cost in a simple monetary overlapping generation economy

The literature has shown that the long-term preservation of renewable resources is ensured in two situations: (1) when the resource can be used as a store of value, and (2) when households are altruistic. This article shows that there is a third situation in which renewable resources are preserved in the long term: when harvesting is costly. To prove this, a monetary overlapping-generations economy is developed, in which a renewable resource is held by a representative household living through two periods. In his youth, he inherits the resource from his parents and decides how much to harvest. Income from the sale of the harvest is saved entirely in fiat currency to finance consumption in old age. It is assumed that harvesting takes time (harvesting cost), and so the young household has to trade off leisure for harvesting. In this simple context, we show that the resource level can be different from zero in the long term (resource preservation). In particular, we observe that two stationary states can coexist: one with a low resource level (overexploitation) and the other with a high resource level (underexploitation). Moreover, with a sufficiently productive harvesting technology, cycles of period two can emerge around each stationary state (flip bifurcation), as well as local indeterminacy around the stationary state with the highest resource level. In this sense, the cost of harvesting seems to be both a source of preservation and a source of resource fluctuations.JEL classification: E32, O44, Q20.

Health Risk and the Welfare Effects of Social Security

We examine the welfare effects of Social Security in a general equilibrium environment with realistic labor income, mortality, and health risks. We construct an overlapping generations model with rational-expectations households facing idiosyncratic health risk, profit maximizing firms, incomplete insurance markets, and a government that provides pensions and health insurance. We calibrate this model to the U.S. economy and perform two sets of computational experiments: (i) modifying the progressivity of the Social Security's benefit-earnings rule, and (ii) cutting Social Security's payroll tax. We find that both experiments have a larger effect on overall welfare in the presence of health risk, because health risk increases the importance of short-term consumption smoothing, both within work-life and retirement. Increased progressivity allows households to better smooth old-age consumption risk, and the payroll tax cut increases disposable income and allows better self-insurance against early-life health risk. We also find that labor supply is an important self-insurance tool in the presence of health risk, as increasing Social Security's progressivity has a smaller effect on overall welfare and cutting the payroll tax has a larger effect on overall welfare when labor supply is fixed. Finally, low-income households experience larger welfare gains both from increasing Social Security's progressivity and cutting the payroll tax, because of their relatively low ability to self-insure against health risk in general.

Annuity Markets and Capital Accumulation

Abstract We examine how the absence of annuities in financial markets affects capital accumulation in a two-period overlapping generations model. Our findings indicate that the effect on capital is ambiguous in general equilibrium, because there are two competing mechanisms at work. On the one hand, the absence of annuities increases the price of old-age consumption relative to the price of early-life consumption. This induces a substitution effect that reduces saving and capital, and an income effect that has the opposite effect as households want to consume less when young, causing them to save more. On the other hand, accidental bequests originate from the assets of the deceased under missing annuity markets. The bequest received in early life always has a positive income effect on saving, but the bequest received in old age, conditional on survival, is effectively a partial annuity with both substitution and income effects. We find that when the desire to smooth consumption is high, the income effects dominate, so the capital stock always increases when annuity markets are missing. However, when the desire to smooth consumption is low, the substitution effects dominate, and the capital stock decreases with missing annuity markets.

The costs of consumption smoothing: less schooling and less nutrition

AbstractUsing novel microdata, we explore lifecycle consumption in Sub-Saharan Africa. We find that households' ability to smooth consumption over the lifecycle is large, particularly, in rural areas. Consumption in old age is sustained by shifting to self-farmed staple food, as opposed to traditional savings mechanisms or food gifts. This smoothing strategy indicates two important costs. The first cost is a loss of human capital as children seem to be diverted away from school and into producing self-farmed food. Second, a diet largely concentrated in staple food (e.g., maize in Malawi) in old age results in a loss of nutritional quality for households headed by the elderly.

Differential mortality and the progressivity of social security

There is a well-established negative correlation between earnings and mortality risk. Using a calibrated general-equilibrium macroeconomic model, this paper examines how this correlation interacts with the welfare implications of Social Security's benefit-earnings rule. My primary findings suggest that the welfare ranking of alternative benefit-earnings rules is somewhat sensitive to differential mortality. Due to their relatively high mortality risk, households with unfavorable earnings histories heavily discount the expected utility from old-age consumption, and therefore do not put much weight on better work-retirement consumption smoothing. Because of this reason, Social Security's benefit-earnings rule warrants less redistribution in the presence of differential mortality, compared to when mortality risk is uncorrelated to earnings. I find that this result continues to hold when household-level labor supply distortions are ignored, and also when an alternative “maximin” welfare criterion is considered, but not when accidental bequests from the deceased are redistributed to the survivors.

Implications of Money-Back Guarantees for Individual Retirement Accounts: Protection Then and Now

Capital market volatility spurs interest in protecting retirement accounts; one such approach is to require money-back guarantees. Using a lifecycle model where investors have access to stocks, bonds, and tax-qualified retirement accounts, we show that such guarantees alter participant consumption, saving, and investment behavior during times of high interest rates, but impacts are even larger in a low-return environment. We conclude that abandoning guarantees could enhance old-age consumption for over 80% of retirees, particularly lower earners, without harming pre-retirement consumption. Our results are of interest for default investment options in individual retirement accounts such as the Pan-European Personal Pension Products. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Old-Age Social Insurance and Household Consumption: Evidence from China

ABSTRACTImproving social welfare and stimulating consumption are two important issues in promoting economic growth. Based on the panel data of China Health and Retirement Longitudinal Study 2011 and 2013, this article precisely calculated the Social Security Wealth of employees and residents. The fixed-effect model and quantile regression method were employed. Besides, this study used the interaction of year dummy and age dummy as an instrumental variable. The results from this study indicate that Social Security Wealth can promote the total household consumption as well as improve the household consumption structure. However, the impact varies in both employees and residents’ groups.

Alcohol consumption in midlife and old age and risk of frailty: Alcohol paradox in a 30-year follow-up study.

alcohol consumption has many harmful health effects, but also benefits of moderate consumption on frailty have been reported. We examined this relationship longitudinally from midlife to old age. data of reported alcohol consumption in midlife (year 1974) and in old age (years 2000 and 2003) were available of a socioeconomically homogenous sample of 2360 men (born 1919-34, the Helsinki Businessmen Study). Alcohol consumption was divided into zero (N = 131 at baseline), light (1-98 g/week, N = 920), moderate (99-196, N = 593), and high consumption (>196, n = 716). Incidence of phenotypic frailty and prefrailty was assessed in 2000 and 2003. Alcohol consumption (reference 1-98 g/week, adjusted for age, body mass index and smoking) was related to frailty both longitudinally (from 1974 to 2000, and from 2000 to 2003) and cross-sectionally in 2000 and 2003. during a 30-year follow-up, high consumption clearly decreased whereas lighter consumption remained stable. High consumption in midlife predicted both frailty (odds ratio = 1.61, 95% confidence interval = 1.01-2.56) and prefrailty (1.42; 1.06-1.92) in 2000, association with zero and moderate consumption was insignificant. Cross-sectionally in 2000, both zero (2.08; 1.17-3.68) and high consumption (1.83; 1.07-3.13) were associated with frailty, while in 2003 only zero consumption showed this association (2.47; 1.25-4.88). the relationship between alcohol and frailty is a paradox during the life course. High, not zero, consumption in midlife predicts old age frailty, while zero consumption in old age is associated with frailty, probably reflecting reverse causality.

Assessing the Demand for Micropensions Among India's Poor

Using new data from a field experiment in India, we test hypotheses about micropension design in a poor population. We elicit demand for the basic micropension in addition to variants with different minimum withdrawal ages, government match rates, and options for lump sum withdrawal. A majority (80%) of respondents report interest in the micropension, and the amount they are willing to contribute would be enough to cover about 40% of expected old-age consumption. We find that prospective policyholders value the inability to access the assets until a particular age. We also find that they respond positively to the government match rate.

Assessing the Demand for Micropensions among India's Poor.

Using new data from a field experiment in India, we test hypotheses about micropension design in a poor population. We elicit demand for the basic micropension in addition to variants with different minimum withdrawal ages, government match rates, and options for lump sum withdrawal. A majority (80%) of respondents report interest in the micropension, and the amount they are willing to contribute would be enough to cover about 40% of expected old-age consumption. We find that prospective policyholders value the inability to access the assets until a particular age. We also find that they respond positively to the government match rate.

An Overlapping Generations Model of Taxpayer Bailouts of Banks

The paper constructs an overlapping generations model to evaluate how different bailout policies affect banks' risk-taking incentives. If banks maintain sufficient equity, we find equity bailout to be an efficient policy in the sense that it implements socially optimal risk-taking. Bailout policies financed by a tax imposed on the young generation always induce excessive risk-taking. No bailout or bailout policies with a tax imposed on the old generation induce increased or reduced risk taking compared with a tax imposed on the young generation depending on whether bank owners maximize the bank's shareholder value or their own old-age consumption.

On the Demographics and the Severity of the Social Security Crisis

Abstract Changing demographics across the world threatens the sustainability of pension benefits. Yet there is widespread sentiment among some business and policy analysts that in the presence of population ageing, more elderly people would mean more old-age consumption and robust business opportunities across all spending dimensions. In this paper we look at a micro-level analysis of intertemporal consumption/saving behavior, and find that in the presence of notable heterogeneity with respect to the consumer impatience and rationality degree, different demographic challenges and likely policy responses would imply greatly varying and significant consumption changes at old age. We also touch upon the associated issues of welfare analysis and transitional effects and discuss various complexities and challenges for policy implications and economic projections.

Adverse Childhood Experiences and Alcohol Consumption in Midlife and Early Old-Age.

To examine the individual and cumulative effects of adverse childhood experiences (ACEs) on alcohol consumption in midlife and early old-age, and the role of ACEs in 10-year drinking trajectories across midlife. Data were from the Whitehall II study, a longitudinal British civil service-based cohort study (N = 7870, 69.5% male). Multinomial logistic regression was used to examine the individual and cumulative effects of ACEs on weekly alcohol consumption. Mixed-effect multilevel modelling was used to explore the relationship between ACEs and change in alcohol consumption longitudinally. Participants who were exposed to parental arguments/fights in childhood were 1.24 (95% CI 1.06, 1.45) times more likely to drink at hazardous levels in midlife (mean age 56 years) after controlling for covariates and other ACEs. For each additional exposure to an ACE, the risk of hazardous drinking versus moderate drinking was increased by 1.12 (95% CI 1.03, 1.21) after adjusting for sex, age, adult socio-economic status, ethnicity and marital status. No associations between ACEs and increased risk of hazardous drinking in early old-age (mean age 66 years) were found. In longitudinal analyses, ACEs did not significantly influence 10-year drinking trajectories across midlife. The effect of exposure to parental arguments on hazardous drinking persists into midlife.

Association between childhood socioeconomic status and vegetables consumption in old age in Japan

Association between childhood socioeconomic status and vegetables consumption in old age in Japan

Bias in estimates of alcohol use among older people: selection effects due to design, health, and cohort replacement.

BackgroundThere is a growing awareness of the need to include the oldest age groups in the epidemiological monitoring of alcohol consumption. This poses a number of challenges and this study sets out to examine the possible selection effects due to survey design, health status, and cohort replacement on estimates of alcohol use among the oldest old.MethodsAnalyses were based on three repeated cross-sectional interview surveys from 1992, 2002 and 2011, with relatively high response rates (86 %). The samples were nationally representative of the Swedish population aged 77+ (total n = 2022). Current alcohol use was assessed by the question “How often do you drink alcoholic beverages, such as wine, beer or spirits?” Alcohol use was examined in relation to survey design (response rate, use of proxy interviews and telephone interviews), health (institutional living, limitations with Activities of Daily Living and mobility problems) and birth cohort (in relation to age and period). Two outcomes were studied using binary and ordered logistic regression; use of alcohol and frequency of use among alcohol users.ResultsHigher estimates of alcohol use, as well as more frequent use, were associated with lower response rates, not using proxy interviews and exclusion of institutionalized respondents. When adjusted for health, none of these factors related to the survey design were significant. Moreover, the increase in alcohol use during the period was fully explained by cohort replacement. This cohort effect was also at least partially confounded by survey design and health effects. Results were similar for both outcomes.ConclusionsSurvey non-participation in old age is likely to be associated with poor health and low alcohol consumption. Failure to include institutionalized respondents or those who are difficult to recruit is likely to lead to an overestimation of alcohol consumption, whereas basing prevalence on older data, at least in Sweden, is likely to underestimate the alcohol use of the oldest old. Trends in alcohol consumption in old age are highly sensitive for cohort effects. When analysing age-period-cohort effects, it is important to be aware of these health and design issues as they may lead to incorrect conclusions.