How do middle-aged children allocate time and money transfers to their older parents in Europe?

The modifications of the demographic structure in Europe are expected to change several aspects of the economic and social landscape. Among the several issues posed by ageing, financing of health care and more precisely long-term care appears as a major challenge for the twenty-first century. Historically, family has always been a non-negligible provider of informal long-term care to elderly. Changes in family structures and the individual roles are likely to influence the provision of informal care to elderly in the future and, by the way, the demand for formal care.

Does Informal Care from Children to their Elderly Parents Substitute for Formal Care in Europe?

This paper analyzes the impact of informal care by adult children on the use of long-term care among the elderly in Europe and the effect of the level of the parent’s disability on this relationship. We focus on two types of formal home care that are the most likely to interact with informal care: paid domestic help and nursing care. Using the most recent European data emerging from the Survey on Health, Ageing and Retirement in Europe (SHARE), we build a two-part utilization model analyzing both the decision to use each type of formal care or not and the amount of formal care received by the elderly. Instrumental variables estimations are used to control for the potential endogeneity existing between formal and informal care. We find endogeneity of informal care in the decision to receive paid domestic help. Estimation results indicate that informal care substitutes for this type of formal home care. However, we find that this substitution effect tends to disappear as the level of disability of the elderly person increases. Finally, informal care is a weak complement to nursing care, independently of the level of disability. These results highlight the heterogeneous effects of informal care on formal care use and suggest that informal care is an effective substitute for long-term care as long as the needs of the elderly are low and require unskilled type of care. Any policy encouraging informal care to decrease long-term care expenditures should take it into account to assess its effectiveness.

Retirement and Subjective Well-Being

We provide an explanation for the common finding that the effect of retirement on life satisfaction is negligible. For this we use subjective well-being measures for life and domains of life satisfaction that are available in the German Socio-Economic Panel (GSOEP) and show that the effect of voluntary retirement on satisfaction with current household income is negative, while the effect on satisfaction with leisure is positive. At the same time, the effect on health satisfaction is positive but small. Following the life domain approach we then argue that these effects offset each other for an average individual and that therefore the overall effect is negligible. Furthermore, we show that it is important to distinguish between voluntary and involuntary retirement. The effect of involuntary retirement is negative because the adverse effect on satisfaction with household income is bigger, the favorable effect on satisfaction with leisure is smaller, and the effect on satisfaction with health is not significantly different from zero. These results turn out to be robust to using different identification strategies such as fixed effects and first differences estimation, as well as instrumental variables estimation using eligibility ages and plant closures as instruments for voluntary and involuntary retirement.labour economics ;

Retirement and Subjective Well-Being

We provide an explanation for the common finding that the effect of retirement on life satisfaction is negligible. For this we use subjective well-being measures for life and domains of life satisfaction that are available in the German Socio-Economic Panel (GSOEP) and show that the effect of voluntary retirement on satisfaction with current household income is negative, while the effect on satisfaction with leisure is positive. At the same time, the effect on health satisfaction is positive but small. Following the life domain approach we then argue that these effects offset each other for an average individual and that therefore the overall effect is negligible. Furthermore, we show that it is important to distinguish between voluntary and involuntary retirement. The effect of involuntary retirement is negative because the adverse effect on satisfaction with household income is bigger, the favorable effect on satisfaction with leisure is smaller, and the effect on satisfaction with health is not significantly different from zero. These results turn out to be robust to using different identification strategies such as fixed effects and first differences estimation, as well as instrumental variables estimation using eligibility ages and plant closures as instruments for voluntary and involuntary retirement.retirement, subjective well-being, satisfaction measurement

Does Retirement Affect Cognitive Functioning?

This paper analyzes the effect of retirement on cognitive functioning using two large scale surveys. On the one hand the HRS, a longitudinal survey among individuals aged 50+ living in the United States, allows us to control for individual heterogeneity and endogeneity of the retirement decision by using the eligibility age for Social Security as an instrument. On the other hand, a comparable international European survey, SHARE, allows us to identify the causal effect of retirement on cognitive functioning by using the cross-country differences in the age-pattern of retirement. The results highlight in both cases a significant negative, and quantitatively comparable, effect of retirement on cognitive functioning. Our results suggest that promoting labor force participation of older workers is not only desirable to insure the viability of retirement schemes, but it could also delay cognitive decline, and thus the occurrence of associated impairments at older age.labour economics ;

Occupational Activities and Cognitive Reserve: a Frontier Approach Applied to the Survey on Health, Ageing, and Retirement in Europe

The aim of this paper was to use a parametric stochastic frontier approach (coming from the economic literature) to explore the impact of the concept of activity (taken in a broad sense: i.e., including both professional and non-professional activities) on the constitution and the care of cognitive reserve among the European population aged 50 and up. For this purpose, we use individual data collected during the first wave of SHARE (Survey on Health, Ageing and Retirement in Europe) performed in 2004. The advantages of this survey were (1) it included a large population (n = 18,623) geographically distributed throughout Europe; and (2) it simultaneously analyzed several dimensions (physical and mental health, mobility, occupational activities, socioeconomic status, etc.). Our results confirm the positive impact of occupational activities on the cognitive functioning of elderly people. These results are discussed in terms of the prevention of cognitive aging and Alzheimer’s disease, and more particularly of retirement policy issues.

Les conditions de vie des prépensionnés

En Belgique, une proportion importante de travailleurs quittent la vie active avant d'atteindre l'âge de 60 ans. Dans cette étude nous analysons les conditions de vie de cette tranche de la population à l'aide d'une série d'indicateurs. Il apparaît que plus d'un quart d'entre eux sont "pauvres" selon le critère du seuil de 60% du revenu médian (15,6% au seuil de 50%) et ces observations sont confirmées quand on s'intéresse à la situation de ces mêmes personnes du point de vue patrimonial ou au travers d'indicateurs de pauvreté subjective ou de privation matérielle. Avec une population vieillissant à grands pas du fait de l'arrivée massive de la génération issue du "baby-boom" et de l'allongement de l'espérance de vie, on doit s'inquiéter des conditions dans lesquelles une partie de cette population vivra ces vieux jours.

Retraite, activités non professionnelles et vieillissement cognitif. Une exploration à partir des données de Share

peer reviewedUne approche en termes de frontières d’effi cacité peut être utilisée pour étudier les relations entre les fonctions cognitives des personnes âgées de plus de 50 ans en Europe d’une part, et différents facteurs, plus particulièrement l’âge, l’éducation et l’exercice d’activités, professionnelles ou non, d’autre part. Le but est de construire une « frontière » correspondant au fonctionnement cognitif optimal que chacun des individus est censé atteindre étant donné son âge et son niveau d’éducation. À cette fi n, nous utilisons des données individuelles collectées durant la première vague de l’enquête internationale et interdisciplinaire Share de 2004, laquelle contient le résultat de tests cognitifs réalisés auprès de plus de 22 000 individus âgés, ainsi que des informations sur leur état de santé, mentale et physique, leur situation socio-économique, leur entourage familial, l’exercice d’activités professionnelles ou non professionnelles, l’isolement social et les performances cognitives individuelles mesurées à l’aide de tests. En plus du rôle fondamental joué par l’éducation face au vieillissement cognitif, le fait de rester en activité, ainsi que la pratique d’une activité non professionnelle ou d’activités physiques, vigoureuses ou modérées, sont positivement associés à la constitution des « réserves cognitives » individuelles. La mise à disposition des données des vagues successives de Share , prévues tous les deux ans auprès des mêmes individus, pourrait permettre de déterminer les liens de causalité subjacents

Retirement and cognitive reserve: a stochastic frontier approach applied to survey data

This paper proposes the use of the stochastic frontier approach to analyse the relationship between cognitive performance, retirement and non-professional activities of the 50+ individuals using data from three surveys conducted in Europe (the Survey on Health, Ageing and Retirement in Europe and the English Longitudinal Survey on Ageing) and United States (the Health and Retirement Study). Next to the strong relationship between cognitive performance, age and education, this study highlights the negative effect of retirement and the positive impact of non-professional activities and social contacts

Occupational activity and cognitive reserve: implications in terms of prevention of cognitive aging and Alzheimer’s disease

This paper investigates the relationship between the concept of activity (including both professional and nonprofessional) and cognitive functioning among older European individuals. In this research, we used data collected during the first wave of SHARE (Survey on Health, Ageing and Retirement in Europe), and a measurement approach known as stochastic frontier analysis, derived from the economic literature. SHARE includes a large population (n . 25,000) geographically distributed across Europe, and analyzes several dimensions simultaneously, including physical and mental health activity. The main advantages of stochastic frontier analysis are that it allows estimation of parametric function relating cognitive scores and driving factors at the boundary and disentangles frontier noise and distance to frontier components, as well as testing the effect of potential factors on these distances simultaneously. The analysis reveals that all activities are positively related to cognitive functioning in elderly people. Our results are discussed in terms of prevention of cognitive aging and Alzheimer’s disease, and regarding the potential impact that some retirement programs might have on cognitive functioning in individuals across Europe