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SHARE and its Policy Lessons from International Comparisons

SHARE and its Policy Lessons from International Comparisons. Axel Börsch-Supan Coordinator SHARE Israel Van Leer Institute, Jerusalem, 17 October 2012. International comparisons. How do public policies work ? D o they reach their intended aims ?

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SHARE and its Policy Lessons from International Comparisons

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  1. SHARE and its Policy Lessons from International Comparisons Axel Börsch-Supan Coordinator SHARE IsraelVan Leer Institute, Jerusalem, 17 October2012

  2. International comparisons • How do publicpolicieswork? • Do they reach their intended aims? • Do theyavoidunintendedside-effects? – macrolevel– microlevel Cross-national variationofpolicies – macrolevel– microlevel • Look overthefenceandlearnfromothers • Benchmarking • US vs. Europe & Israel Cross-national data: SHARE

  3. Example 1: Doesspendingfortheoldcrowd out spendingfortheyoung? (Börsch-Supan andReil-Held) DK Compare time trendbycountry FR DE EU Noconvincingrelationtoagestructureofcountry! Per capitaexpenditurededicatedtotheyoung IT Per capitaexpenditurededicatedtotheelderly

  4. Example 2: The effect of health care spending on health status(Hendrik Jürges) ● US 15 16 17

  5. Example 3:Is retirement really bliss? Mental retirement : early retirement and cognition(Adam, Bonsang, Perelman et al. 2007; Rohwedderand Willis 2010)

  6. Share of early retireesamong males 60-64 (in %) Unemployment rate (in %) Example 4: The lump of labor fallacy(Börsch-Supan with OECD employment data) The old should make place… …for the young!

  7. Causality issues in analyses based on cross-national data • Macro evidence needs micro foundation: • usually many other influential variables • aggregates almost always simultaneously determined • Gold standard: laboratory experiments in natural sciences • usually not an option for policy evaluation • replace by “historical (natural) experiments” • Even in micro data: selectivity and reverse causality • time as strongest instrument: longitudinal panel data • policy changes (“regression discontinuity designs”)  Design of SHARE

  8. Korea Japan China Europe asa Laboratory in a global network SHARELAND Wave 1 participation (2004): 11 countries: NL, DE, AT, DK, BE, FR, CH, SP, IT, GR, SE (+UK) SE EE DK IE UK Waves 2 and 3 (2006 and 08): plus CZ, PL, IE, IL: 15 countries NL PL DE BE CZ LU Wave 4 participation (2010): plus EE, LU, HU, SI, PT: now 20 countries FR AT CH HU India SI PT IT SP 62,000 resps, 130,000 i‘views GR IL Mexico, Brazil, Argentina

  9. Minimizeartifacts:Ex-ante harmonization • Internet based translation tool (LMU) • Online overview of country specifics • Generic survey instrument to conduct Computer Assisted Personal Interviews (CAPI)

  10. Minimizeartifacts:Performance measuresandbiomarkers Source: Jürges, 2006 Objective measures of health help distinguishing actual differences in health from different response styles to extract genuine policy effects

  11. Result: Reporting stylesofgeneralhealthstatusindicators

  12. Mental retirement: Rohwedder and Willis Usepensionpoliciesasinstrumentstoisolatecausaldirection

  13. Mental retirement Early retirement: bliss or detriment? • Very controversial since causality is everything:  health  early retirement  early retirement  health • Börsch-Supan and Jürges 2006: Life satisfaction after early retirement • Adam, Bonsang, Perelman et al. 2007: Depreciation of cognitive reserve after early retirement • Coe, Lindeboom (et al.) 2008+: Does early retirement kill? • Zweimüller et al 2010: Plant closures and mortality • Rohwedder and Willis 2010: Mental retirement • Bonsang, Perelman et al. 2010: Cognitive functioning • Coe, Gaudecker, Lindeboom & Maurer 2012: Early retirement and cognition • FabrizioMazzoni 2013: Cognitive functioning

  14. Cross-cuttingpolicyresults Guglielmo Weber: Parental status and Retirement incomeImportance of intergenerational linkages: Books in parental home increase early earnings. Effects persists onto later earnings. Mathis Schröder: Health and EmploymentExperience of redundancy reduces health at retirement. Unemployment benefits appear to reduce this effect. Agar Brugiavini: Work and Retirement IGaps in employment history reduce retirement income. Maternity benefits first increases female LFP, thus retirement income, but U-shape pattern Johannes Siegrist/Morten Wahrendorf: Work and Retirement IIWork quality improves health at retirement. Active labour market policies are associated with higher work quality and thus better health Nicolas Sirven: Health Care Utilisation in EuropeDoctordensityhelpstoimprovepreventivecare, positive effects on healthatretirement. Couldreducehealthdisparitiesacross Europe. RadimBohacek/Michal Myck: Histories of WarStrong effects of persecution on later-life health and income situation 14

  15. Exploit “policy experiments”:Pension policy changes and youth employ.(Börsch-Supan/Schnabel) Figure 6: Labor Force Participation of youth, young and elderly males Shocks to the system: 1972, 1984 and 1997 Usepensionpolicydiscontinuitiestoshowthefallacy in the „lump oflabor“ Source: German Mikrozensus

  16. Further aims: The Crisis ….there is still a lot more to happen, and to find out! • e.g., on the long-term effects of the crisis and effectiveness of policy interventions (old age poverty, health, labor market participation,…) • especially in countries with funding problems

  17. The SubPrime-Financial-PublicDebt-Euro-Crisis ….there is still a lot more to happen, and to find out! • e.g., on the long-term effects of the crisis and effectiveness of policy interventions (old age poverty, health, labor market participation,…) • especially in countries with funding problems

  18. Wave 5-6-7: Scientific aims • Povertyandsocialexclusion • Biomarker collection in all countries,centrallaboratory(SDU in DK) • Well-being(Sarkozy Commission): - time use/dayreconstructionmethod - mixedmode: paper/telefone/Internet • Life historiesrevisited • Cognition, productivityandretirement

  19. Conclusions International comparisonsvery powerful in detecting, isolatingandmeasuringpolicyeffects Substantial harmonizationeffortsnecessarytoavoidspuriouseffectsthroughdifferences in language, institutions, interpretation, andmethods „Historical experiments“ greatlyhelp in identification. Requires genuine paneldata, preferablywithretrotspecivedimension: SHARELIFE in connectionwith administrative records Again: requiresknowledgeofhistoryandhowthecountry-specificinstitutionschanged Israel‘scontribution: history, migration, policyexperiments Use ! 19

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