2016

Working Time Regulation, Unequal Lifetimes and Fairness

We examine the redistributive impact of working time regulations in an economy with unequal lifetimes. We show that when hourly wages are kept constant, uniform working time reductions can reduce inequalities in lifetime well-being between short-lived and long-lived persons with respect to the laissez-faire, but they make the short-lived worse off. When total labour earnings are kept constant instead, uniform working time reductions make the short-lived better off, but they raise inequalities.

Retirement and Cognitive Functioning: International Evidence*

We survey the recent literature on the effects of retirement on cognitive functioning at older ages around the world. We describe results from studies using similar data, definitions and methods to capture causal effects. The studies yield widely varying results. Most papers find that being retired leads to a decline of cognition. However, the size and significance of the estimated effects vary dramatically depending on methods. We replicate several of these results using the same data sets.

Retirement Behavior in the U.S. and Europe

We develop a retirement model featuring various labor market exit routes: unemployment, disability, private and public pensions. The model allows for saving and uncertainty along several dimensions, including health and mortality. Individuals’ preferences are estimated on data from the U.S. and Europe using institutional variation across countries. We analyze the roles of preferences and institutions in explaining international heterogeneity in retirement behavior.

Les effets de l’équilibre budgétaire et du transfert canadien en santé sur les finances publiques du Québec

Using a simulation tool, we analyze four scenarios that allow to us to measure the effects over 20 years of 1) maintaining the budget balance for 4 years, and 2) a growth in the Canada Health Transfer (CHT) at its historical pace. In the reference scenario, which assumes structural expenditure growth rates consistent with the pre-budgetary rigour period and a CHT increasing at a slower pace than in the past, Quebec public expenditures should increase by G$166.6 by 2035, while revenue will only increase by G$106.

Self-Employment, Wealth and Start-up Costs: Evidence from a Financial Crisis*

Financial constraints affect individuals’ decision to become self-employed, suggesting a positive relationship between the propensity to become entrepreneur and personal wealth. Recent evidence confirms this hypothesis, and shows that the importance of the entrepreneurship—wealth relationship increases with the extent of liquidity constraints and flattens with the magnitude of start-up costs. Using individual-level data from 3 European and U.S. surveys as well as the World Bank, we investigate the impact of start-up costs on the self-employment—wealth relationship.

Analyse de la rentabilité économique des scénarios de réforme du RRQ proposés en 2016*

We use simulation methods to analyze the impacts of the most recent proposals to reform the Quebec Pension Plan – those put forward in June, 2016 by the Quebec and Canadian governments. Accounting for uneven life expectancy by level of education, earnings variability, and interactions with the tax and retirement income systems, we compute internal rates of return (IRR) for 78 types of individuals. The actual rate of return on new contributions is comparable to that of other financial products.

Discrimination à l’embauche des candidates d’origine maghrébine dans la région de la Capitale-Nationale*

Using a resume mailing experiment carried out in Quebec City, this paper seeks to identify whether – with identical resumes – “Samira Benounis” would get fewer job interviews than “Valérie Tremblay”. Our results show that, all else equal, when the candidate’s name is of North African rather than of Quebec origin, the probability of the candidate getting a job interview decreases by 11%. This suggests hiring discrimination against job seekers of North African origin in the Quebec City region, in the context of an increasingly important demographic role for immigration in Quebec.

Nursing Home Choice, Family Bargaining and Optimal Policy in a Hotelling Economy

We study the impact of the distribution of bargaining power within the family on the choices of nursing homes, and on the location and prices chosen by nursing homes. When the dependent parent only cares about distance, whereas his child cares also about price, the mark-up rate of nursing homes increases with the bargaining power of the dependent parent. We contrast the laissez-faire with the social optimum, and show how the latter can be decentralized 1) in a first-best setting and 2) when the government cannot force location.

Pensions, annuities, and long-term care insurance: On the impact of risk screening

We examine the interaction between the choice of a retirement saving vehicle and the purchase of long-term care insurance in a world where agents learn over time about their long-term care (LTC) risk. Absent any LTC issues, acquiring a savings product before learning one’s health status (or risk type) would be preferred by risk averse agents.

The commitment value of funding pensions*

This paper studies how funding public pensions can improve policy outcomes when short-sighted governments cannot commit. We focus on sustainable plans, where “optimal” pensions are not reneged on by subsequent governments. Funding pensions is a commitment mechanism. It implies lower contributions than does the second best policy, which reduces temptation to over-redistribute later. Funding may be preferable even if the population growth rate is higher than the rate of return on assets.

Pages

Partners

Industrielle Alliance, Groupe financier

2019 © Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques