Measuring private transfers between generations and gender: an application of national transfer accounts for Austria 2015.

Few data sources provide information on private transfers between generations and gender. We use a novel approach based on the National Transfer Accounts methodology to estimate the value of intra-family transfers between generations by age, gender and parental status in Austria 2015. The paper considers monetary transfers together with transfers of consumption goods and transfers of services produced by non-market work. Our results show that parents use one third of their disposable income and up to four hours of daily non-market work for their children. The total size of the intra-family transfers corresponds to 38 per cent of primary income.

The impact of COVID-19 vaccines on the Case Fatality Rate: The importance of monitoring breakthrough infections.

OBJECTIVES: This study aimed to test the behavior of the case fatality rate (CFR) in a mixed population of vaccinated and unvaccinated individuals by illustrating the role of both the effectiveness of vaccines in preventing deaths and the detection of infections among both the vaccinated (breakthrough infections) and unvaccinated individuals. METHODS: We simulated three hypothetical CFR scenarios that resulted from a different combination of vaccine effectiveness in preventing deaths and the efforts in detecting infections among both the vaccinated and unvaccinated individuals. RESULTS: In the presence of vaccines, the CFR depends not only on the effectiveness of vaccines in preventing deaths but also on the detection of breakthrough infections. As a result, a decline in the CFR may not imply that vaccines are effective in reducing deaths. Likewise, a constant CFR can still mean that vaccines are effective in reducing deaths. CONCLUSIONS: Unless vaccinated people are also tested for COVID-19 infection, the CFR loses its meaning in tracking the pandemic. This shows that unless efforts are directed at detecting breakthrough infections, it is hard to disentangle the effect of vaccines in reducing deaths from the probability of detecting infections on the CFR.

Age-Specific Income Trends in Europe: The Role of Employment, Wages, and Social Transfers.

This study analyses age-specific differences in income trends in nine European countries. Based on data from National Accounts and the European Union Statistics on Income and Living Conditions, we quantify age-specific changes in income between 2008 and 2017 and decompose these changes into employment, wages, and public transfer components. Results show that income of the younger age groups stagnated or declined in most countries since 2008, while income of the older population increased. The decomposition analysis indicates that the main drivers of the diverging trends are higher employment among the older population and a strong increase in public pensions, especially for women. Supplementary Information: The online version contains supplementary material available at 10.1007/s11205-021-02838-w users.

The optimal lockdown intensity for COVID-19.

One of the principal ways nations are responding to the COVID-19 pandemic is by locking down portions of their economies to reduce infectious spread. This is expensive in terms of lost jobs, lost economic productivity, and lost freedoms. So it is of interest to ask: What is the optimal intensity with which to lockdown, and how should that intensity vary dynamically over the course of an epidemic? This paper explores such questions with an optimal control model that recognizes the particular risks when infection rates surge beyond the healthcare system's capacity to deliver appropriate care. The analysis shows that four broad strategies emerge, ranging from brief lockdowns that only "smooth the curve" to sustained lockdowns that prevent infections from spiking beyond the healthcare system's capacity. Within this model, it can be optimal to have two separate periods of locking down, so returning to a lockdown after initial restrictions have been lifted is not necessarily a sign of failure. Relatively small changes in judgments about how to balance health and economic harms can alter dramatically which strategy prevails. Indeed, there are constellations of parameters for which two or even three of these distinct strategies can all perform equally well for the same set of initial conditions; these correspond to so-called triple Skiba points. The performance of trajectories can be highly nonlinear in the state variables, such that for various times t , the optimal unemployment rate could be low, medium, or high, but not anywhere in between. These complex dynamics emerge naturally from modeling the COVID-19 epidemic and suggest a degree of humility in policy debates. Even people who share a common understanding of the problem's economics and epidemiology can prefer dramatically different policies. Conversely, favoring very different policies is not evident that there are fundamental disagreements.

An indirect method to monitor the fraction of people ever infected with COVID-19: An application to the United States.

The number of COVID-19 infections is key for accurately monitoring the pandemics. However, due to differential testing policies, asymptomatic individuals and limited large-scale testing availability, it is challenging to detect all cases. Seroprevalence studies aim to address this gap by retrospectively assessing the number of infections, but they can be expensive and time-intensive, limiting their use to specific population subgroups. In this paper, we propose a complementary approach that combines estimated (1) infection fatality rates (IFR) using a Bayesian melding SEIR model with (2) reported case-fatality rates (CFR) in order to indirectly estimate the fraction of people ever infected (from the total population) and detected (from the ever infected). We apply the technique to the U.S. due to their remarkable regional diversity and because they count with almost a quarter of all global confirmed cases and deaths. We obtain that the IFR varies from 1.25% (0.39-2.16%, 90% CI) in Florida, the most aged population, to 0.69% in Utah (0.21-1.30%, 90% CI), the youngest population. By September 8, 2020, we estimate that at least five states have already a fraction of people ever infected between 10% and 20% (New Jersey, New York, Massachussets, Connecticut, and District of Columbia). The state with the highest estimated fraction of people ever infected is New Jersey with 17.3% (10.0, 55.8, 90% CI). Moreover, our results indicate that with a probability of 90 percent the fraction of detected people among the ever infected since the beginning of the epidemic has been less than 50% in 15 out of the 20 states analyzed in this paper. Our approach can be a valuable tool that complements seroprevalence studies and indicates how efficient have testing policies been since the beginning of the outbreak.

How long should the COVID-19 lockdown continue?

Nations struggled to decide when and how to end COVID-19 inspired lockdowns, with sharply divergent views between those arguing for a resumption of economic activity and those arguing for continuing the lockdown in some form. We examine the choice between continuing or ending a full lockdown within a simple optimal control model that encompasses both health and economic outcomes, and pays particular attention to when need for care exceeds hospital capacity. The model shows that very different strategies can perform similarly well and even both be optimal for the same relative valuation on work and life because of the presence of a so-called Skiba threshold. Qualitatively the alternate strategies correspond to trying essentially to eradicate the virus or merely to flatten the curve so fewer people urgently need healthcare when hospitals are already filled to capacity.

Redistributive effects of different pension systems when longevity varies by socioeconomic status.

We propose a general analytical framework to model the redistributive features of alternative pension systems when individuals face ex ante differences in mortality. Differences in life expectancy between high and low socioeconomic groups are often large and have widened recently in many countries. Such longevity gaps affect the actuarial fairness and progressivity of public pension systems. However, behavioral responses to longevity and policy complicate analysis of possible reforms. Here we consider how various pension systems would perform in an OLG setting with heterogeneous longevity and ability. We evaluate redistributive effects of three Notional Defined Contribution plans and three Defined Benefit plans, calibrated on the US case. Compared to a benchmark non-redistributive plan that accounts for differences in mortality, US Social Security reduces regressivity from longevity differences, but would require group-specific life tables to achieve progressivity. Moreover, without separate life tables, despite apparent accounting gains, lower income groups would suffer welfare losses and higher income groups would enjoy welfare gains through indirect effects of pension systems on labor supply.

A Quantitative Assessment of the Rush Hour of Life in Austria, Italy and Slovenia.

This article builds on time use data to explore cross-country differences between Austria, Italy and Slovenia in unpaid labour and its implications in terms of gender distribution of total work. A contribution of this paper is to measure the 'rush hour of life' (RHOL) based on age spans in which individuals' working time (including paid and unpaid work) exceeds their free time. In total, men and women work similar hours in Austria, whereas Italy and Slovenia show a gender gap with women working an average of approximately 50 min more per day during prime working ages. The different compositions and loads of total work are reflected in cross-country variations of the length and intensity of the RHOL, with Slovenian women reporting, on average, the larger squeeze of time. However, breadwinner arrangements differ considerably among the three countries, which can affect the amounts of work and free time available for men and even more so for women. Therefore, we further extend our analysis by developing a regression model to quantitatively assess the association between couples' working arrangements and levels of the RHOL indicator for men and women. Results indicate a dual burden for women in dual-earner couples, squeezing out their free time. By contrast, women in male-breadwinner arrangements report the lowest amounts of total work. Breadwinner models show no significant relation to male levels of work and free time, with the main exception of Italy where men face higher RHOL in full-time employed couples.

Education rather than age structure brings demographic dividend.

The relationship between population changes and economic growth has been debated since Malthus. Initially focusing on population growth, the notion of demographic dividend has shifted the attention to changes in age structures with an assumed window of opportunity that opens when falling birth rates lead to a relatively higher proportion of the working-age population. This has become the dominant paradigm in the field of population and development, and an advocacy tool for highlighting the benefits of family planning and fertility decline. While this view acknowledges that the dividend can only be realized if associated with investments in human capital, its causal trigger is still seen in exogenous fertility decline. In contrast, unified growth theory has established human capital as a trigger of both demographic transition and economic growth. We assess the relative importance of changing age structure and increasing human capital for economic growth for a panel of 165 countries during the time period of 1980-2015. The results show a clear dominance of improving education over age structure and give evidence that the demographic dividend is driven by human capital. Declining youth dependency ratios even show negative impacts on income growth when combined with low education. Based on a multidimensional understanding of demography that considers education in addition to age, and with a view to the additional effects of education on health and general resilience, we conclude that the true demographic dividend is a human capital dividend. Global population policies should thus focus on strengthening the human resource base for sustainable development.

Optimal investment and location decisions of a firm in a flood risk area using impulse control theory.

Flooding events can affect businesses close to rivers, lakes or coasts. This paper provides an economic partial equilibrium model, which helps to understand the optimal location choice for a firm in flood risk areas and its investment strategies. How often, when and how much are firms willing to invest in flood risk protection measures? We apply Impulse Control Theory and develop a continuation algorithm to solve the model numerically. We find that, the higher the flood risk and the more the firm values the future, i.e. the more sustainable the firm plans, the more the firm will invest in flood defense. Investments in productive capital follow a similar path. Hence, planning in a sustainable way leads to economic growth. Sociohydrological feedbacks are crucial for the location choice of the firm, whereas different economic settings have an impact on investment strategies. If flood defense is already present, e.g. built up by the government, firms move closer to the water and invest less in flood defense, which allows firms to generate higher expected profits. Firms with a large initial productive capital surprisingly try not to keep their market advantage, but rather reduce flood risk by reducing exposed productive capital.

Quantifying Economic Dependency.

In this paper we compare several types of economic dependency ratios for a selection of European countries. These dependency ratios take into account not only the demographic structure of the population, but also the differences in age-specific economic behaviour such as labour market activity, income and consumption as well as age-specific public transfers. In selected simulations where we combine patterns of age-specific economic behaviour and transfers with population projections, we show that in all countries population ageing would lead to a pronounced increase in dependency ratios if present age-specific patterns were not to change. Our analysis of cross-country differences in economic dependency demonstrates that these differences are driven by both differences in age-specific economic behaviour and in the age composition of the populations. The choice of which dependency ratio to use in a specific policy context is determined by the nature of the question to be answered. The comparison of our various dependency ratios across countries gives insights into which strategies might be effective in mitigating the expected increase in economic dependency due to demographic change.

Conceptualizing socio-hydrological drought processes: The case of the Maya collapse.

With population growth, increasing water demands and climate change the need to understand the current and future pathways to water security is becoming more pressing. To contribute to addressing this challenge, we examine the link between water stress and society through socio-hydrological modeling. We conceptualize the interactions between an agricultural society with its environment in a stylized way. We apply the model to the case of the ancient Maya, a population that experienced a peak during the Classic Period (AD 600-830) and then declined during the ninth century. The hypothesis that modest drought periods played a major role in the society's collapse is explored. Simulating plausible feedbacks between water and society we show that a modest reduction in rainfall may lead to an 80% population collapse. Population density and crop sensitivity to droughts, however, may play an equally important role. The simulations indicate that construction of reservoirs results in less frequent drought impacts, but if the reservoirs run dry, drought impact may be more severe and the population drop may be larger.

Production activities and economic dependency by age and gender in Europe: A cross-country comparison.

We compare selected European countries using an economic dependency ratio which emphasizes the role of age-specific levels of production and consumption. Our analysis reveals large differences in the age- and gender-specific level and type of production activities across selected European countries and identifies possible strategies to adjust age-specific economic behaviour to an ageing population. The cross-country differences in economic dependency of children and elderly persons are largely determined by the age at which people enter, respectively exit, the labour market. The ability of the working age population to support children and elderly persons in turn is strongly influenced by the participation of women in paid work. We also provide a measure for the age-specific production and consumption in form of unpaid household work. The inclusion of unpaid household work leads to a decrease of the gender differences in production activities and indicates that the working age population supports children and elderly persons not only through monetary transfers but also through services produced by unpaid work (e.g. childcare, cooking, cleaning…). Given the available data, we cannot distinguish the age profile of consumption by gender and have to assume - in case of unpaid work - that each member of the household consumes the same. Hence, our results have to be regarded as a first approximation only. Our paper aims to argue that a reform of the welfare system needs to take into account not only public transfers but also private transfers, in particular the transfers in form of goods and services produced through unpaid household work.

Ageing, productivity and wages in Austria.

Current demographic developments in industrialized countries and their consequences for workforce ageing challenge the sustainability of intergenerational transfers and economic growth. A shrinking share of the young workforce will have to support a growing share of elderly, non-working people. Therefore, the productivity of the workforce is central to a sustainable economic future. Using a new matched employer-employee panel dataset for Austrian firms for the period 2002-2005, we study the relationship between the age structure of employees, labour productivity and wages. These data allow us to account, simultaneously, for both socio-demographic characteristics of employees and firm heterogeneity, in order to explain labour productivity and earnings. Our results indicate that firm productivity is not negatively related to the share of older employees it employs. We also find no evidence for overpayment of older employees. Our results do not show any association between wages and the share of older employees. Furthermore, we find a negative relationship between the share of young employees and labour productivity as well as wages, which is more prevalent in the industry and construction sector.

Union instability as an engine of fertility? A microsimulation model for France.

Opportunities for conceiving and bearing children are fewer when unions are not formed or are dissolved during the childbearing years. At the same time, union instability produces a pool of persons who may enter new partnerships and have additional children in stepfamilies. The balance between these two opposing forces and their implications for fertility may depend on the timing of union formation and parenthood. In this article, we estimate models of childbearing, union formation, and union dissolution for female respondents to the 1999 French Etude de l'Histoire Familiale. Model parameters are applied in microsimulations of completed family size. We find that a population of women whose first unions dissolve during the childbearing years will end up with smaller families, on average, than a population in which all unions remain intact. Because new partnerships encourage higher parity progressions, repartnering minimizes the fertility gap between populations with and those without union dissolution. Differences between the two populations are much smaller when family formation is postponed-that is, when union formation and dissolution or first birth occurs after age 30, or when couples delay childbearing after union formation.

The Impact of Policies Influencing the Demography of Age-Structured Populations: Lessons from Academies of Sciences.

In this paper, we assess the role of policies aimed at regulating the number and age structure of elections on the size and age structure of five European Academies of Sciences. We show the recent pace of ageing and the degree of variation in policies across them and discuss the implications of different policies on the size and age structure of academies. We also illustrate the potential effect of different election regimes (fixed vs. linked) and age structures of election (younger vs. older) by contrasting the steady-state dynamics of different projections of Full Members in each academy into 2070 and measuring the size and age-compositional effect of changing a given policy relative to a status quo policy scenario. Our findings suggest that academies with linked intake (i.e., where the size of the academy below a certain age is fixed and the number of elections is set to the number of members becoming that age) may be a more efficient approach to curb growth without suffering any ageing trade-offs relative to the faster growth of academies electing a fixed number of members per year. We further discuss the implications of our results in the context of stable populations open to migration.

Transition to parenthood: the role of social interaction and endogenous networks.

Empirical studies indicate that the transition to parenthood is influenced by an individual's peer group. To study the mechanisms creating interdependencies across individuals' transition to parenthood and its timing, we apply an agent-based simulation model. We build a one-sex model and provide agents with three different characteristics: age, intended education, and parity. Agents endogenously form their network based on social closeness. Network members may then influence the agents' transition to higher parity levels. Our numerical simulations indicate that accounting for social interactions can explain the shift of first-birth probabilities in Austria during the period 1984 to 2004. Moreover, we apply our model to forecast age-specific fertility rates up to 2016.

Externalities in a life cycle model with endogenous survival.

We study socially vs individually optimal life cycle allocations of consumption and health, when individual health care curbs own mortality but also has a spillover effect on other persons' survival. Such spillovers arise, for instance, when health care activity at aggregate level triggers improvements in treatment through learning-by-doing (positive externality) or a deterioration in the quality of care through congestion (negative externality). We combine an age-structured optimal control model at population level with a conventional life cycle model to derive the social and private value of life. We then examine how individual incentives deviate from social incentives and how they can be aligned by way of a transfer scheme. The age-patterns of socially and individually optimal health expenditures and the transfer rate are derived. Numerical analysis illustrates the working of our model.

The reproductive value in distributed optimal control models.

We show that in a large class of distributed optimal control models (DOCM), where population is described by a McKendrick type equation with an endogenous number of newborns, the reproductive value of Fisher shows up as part of the shadow price of the population. Depending on the objective function, the reproductive value may be negative. Moreover, we show results of the reproductive value for changing vital rates. To motivate and demonstrate the general framework, we provide examples in health economics, epidemiology, and population biology.