Eric Bonsang

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 parents 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 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.

Does Retirement Affect Cognitive Functioning

This paper analyses the effect of retirement on cognitive functioning using a longitudinal survey among older Americans, which allows controlling for individual heterogeneity and endogeneity of the retirement decision by using the eligibility age for social security as an instrument. The results highlight a significant negative effect of retirement on cognitive functioning. Our findings suggest that reforms aimed at promoting labour force participation at an older age may not only ensure the sustainability of social security systems but may also create positive health externalities for older individuals.

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.

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 Age and the Age of Onset of Alzheimer’s Disease: Results from the ICTUS Study

Objectives To test whether deferred retirement is associated with delayed onset of Alzheimer’s disease (AD), and, if so, to determine whether retirement age still predicts the age at onset of AD when two potential biases are considered. Methods The study sample was gathered from the Impact of Cholinergic Treatment Use/Data Sharing Alzheimer cohort (ICTUS/DSA), a European study of 1,380 AD patients. Information regarding retirement age, onset of symptoms and covariates was collected at baseline whereas age at diagnosis was gathered from the patient’s medical record prior to study entry. Linear mixed models, adjusted for gender, education, occupation, center, country, household income, depression and cardiovascular risk factors were conducted on 815 patients. Results (1) The global analyses (n = 815) revealed that later age at retirement was associated with later age at diagnosis (β = 0.31, p < 0.0001); (2) once the selection bias was considered (n = 637), results showed that this association was weaker but remained significant (β = 0.15, p = 0.004); (3) once the bias of the reverse causality (i.e., the possibility that subjects may have left the workforce due to prior cognitive impairment) was considered (n = 447), the effect was no longer significant (β = 0.06, p = 0.18). Conclusion The present study supports that there is an association between retirement age and age at onset of AD. However, the strength of this association appears to be overestimated due to the selection bias. Moreover, the causality issue remains unresolved. Further prospective investigations are mandatory in order to correctly address this question.

Cognitive Ageing and Risk Attitude

In this paper we investigate to what extent the decrease in the willingness to take risks with age can be traced to the cognitive ageing process. We use data from the Survey of Health, Ageing and Retirement in Europe (SHARE) that includes both a measure of financial risk preference and measures of cognitive ability for a representative sample of individuals aged 50 in 11 European countries. The availability of a large set of variables in SHARE allows us to control for potential confounding factors that may be related to both cognitive skills and risk attitudes. Conditional on socio-demographic characteristics, about two fifth of the agerelated cross-sectional difference in willingness to take risks can be explained by a noisy measure of cognitive skills. Due to the attenuation bias that results from measurement error in the cognitive skills measure, this is a lower bound estimate. Using the lag of the measured cognitive score as an instrument for the noisy contemporaneous cognitive skills measure, we show that about 70% of the difference in willingness to take risks between cohorts can be traced to age-related differences in cognitive skills.

As You Sow, So Shall You Reap: Gender-Role Attitudes and Late-Life Cognition:

Some studies have found that women outperform men in episodic memory after midlife. But is this finding universal, and what are the reasons? Gender differences in cognition are the result of biopsychosocial interactions throughout the life course. Social-cognitive theory of gender development posits that gender roles may play an important mediating role in these interactions. We analyzed country differences in the gender differential in cognition after midlife using data from individuals age 50 and above (N = 226,661) from 27 countries. As expected, older women performed relatively better in countries characterized by more equal gender-role attitudes. This result was robust to cohort differences as well as reverse causality. The effect was partially mediated by education and labor-force participation. Cognition in later life thus cannot be fully understood without reference to the opportunity structures that sociocultural environments do (or do not) provide. Global population aging raises the importance of understanding that gender roles affect old-age cognition and productivity.

Home Production and Retirement in Couples: A Panel Data Analysis

We analyse the effects of retirement of one partner on home production by both partners in a couple. Using longitudinal data from Germany on couples, we control for fixed household specific effects to address the concern that retirement decisions are correlated with unobserved characteristics that also affect home production. For males and females, we find that own retirement significantly increases the amounts of home production. There are negative cross-effects of retirement on home production done by the partner. The fall in household income at retirement of one of the partners is largely compensated by an increase in total household production.

Satisfaction with Daily Activities after Retirement in Europe

This paper analyses the determinants of satisfaction with daily activities among retirees aged 65 years or older in eleven European countries. We use data from the Survey of Health, Ageing and Retirement in Europe on self-assessed satisfaction with daily activities and anchoring vignettes to correct for potential differences in responses scales across countries and socio-demographic groups. On average, retired Europeans appear to be satisfied with their daily activities, but there are large differences across countries: respondents from Northern countries tend to be more satisfied than individuals from Central European or Mediterranean countries. Our analysis shows that correcting for response scale differentials alters the country ranking for satisfaction with daily activities but hardly affects the conclusions on the factors driving within country differences between socio-demographic groups.