Francesca Zantomio

Do household surveys give a coherent view of disability benefit targeting?: a multisurvey latent variable analysis for the older population in Great Britain

Summary We compare three major UK surveys, the British Household Panel Survey, Family Resources Survey and the English Longitudinal Study of Ageing, in terms of the picture that they give of the relationship between disability and receipt of the attendance allowance benefit. Using the different disability indicators that are available in each survey, we use a structural equation approach involving a latent concept of disability in which probabilities of receiving attendance allowance depend on disability. Despite major differences in design, once sample composition has been standardized through statistical matching, the surveys deliver similar results for the model of disability and receipt of attendance allowance. Provided that surveys offer a sufficiently wide range of disability indicators, the detail of disability measurement appears relatively unimportant.

Long-term care and reciprocity: does helping with grandchildren result in the receipt of more help at older ages?

This paper investigates the presence of reciprocity in informal care provision among European families. Using data from the first two waves of SHARE (the Survey of Health, Retirement and Ageing) we empirically analyze whether the provision of informal childcare by grandparents at some point in time has an impact on the prevalence and intensity of informal care they will later receive, once needing care to perform activities of daily living, from adult children. Results show that the prevalence of informal care receipt is significantly higher for grandparents who previously provided childcare, while no effect is registered for the amount of care received. Aknowledgments: We are grateful to Howie Litwin and participants to the Brixen SHARE meeting 2012 for helpful comments. This paper uses data from SHARE release 2.5.0, as of May 24th 2011. The SHARE data collection has been primarily funded by the European Commission through the 5th framework programme (project QLK6-CT-200100360 in the thematic programme Quality of Life), through the 6th framework programme (projects SHARE-I3, RII-CT2006-062193, COMPARE, CIT5-CT-2005-028857, and SHARELIFE, CIT4-CT-2006-028812) and through the 7th framework programme (SHARE-PREP, 211909 and SHARE-LEAP, 227822). Additional funding from the U.S. National Institute on Aging (U01 AG09740-13S2, P01 AG005842, P01 AG08291, P30 AG12815, Y1-AG-4553-01 and OGHA 04-064, IAG BSR06-11, R21 AG025169) as well as from various national sources is gratefully acknowledged (see http://www.share-project.org for a full list of funding institutions). This research has benefited from Authors acknowledge the funding received by Farmafactoring foundation. All responsibility for the analysis and interpretation of the data presented here lies with the authors only.

Older people's participation in extra-cost disability benefits

The targeting of an UK extra-cost disability benefit for older people, Attendance Allowance, is analyzed using longitudinal data from the British Household Panel Survey. First, a binary model of benefit participation is used to investigate whether receipt is responsive to the onset of disability. Second, matching estimators are used to evaluate the consequences of missed participation on later financial wellbeing. Results indicate that participation is highly responsive to the onset of disability, although the chance of delays in receipt emerges. Personal characteristics unrelated to eligibility also appear to influence benefit receipt, translating into sizeable differences in the amount of cash support received. The comparison of recipients with observationally equivalent non-recipients confirms that timely participation reduces disabled older peoples financial strain.

Accounting for Housing in Poverty Analysis

The treatment of housing in the definition of income used to measure poverty makes a big difference to who is counted as poor. Both the Before Housing Costs (BHC) and After Housing Costs (AHC) measures in current use in the UK pose problems. We compare BHC and AHC income with an alternative measure, overcoming their respective flaws by including in income the difference between the estimated value of housing consumed and housing costs, or net imputed rent. We investigate whether findings about poverty among children and pensioners, and the effectiveness of poverty-reducing policies, are affected by accounting for housing in this way.

Inequity in healthcare use among older people after 2008: The case of Southern European Countries

Despite the sizeable cuts in public healthcare spending, which were part of the austerity measures recently undertaken in Southern European countries, little attention has been devoted to monitoring its distributional consequences in terms of healthcare use. This study aims at measuring socioeconomic inequities in primary and secondary healthcare use experienced some time after the crisis onset in Italy, Spain and Portugal. The analysis, based on data drawn from the Survey of Health, Ageing and Retirement in Europe (SHARE), focuses on older people, who generally face significantly higher healthcare needs, and whose health appeared to have worsened in the aftermath of the crisis. The Horizontal Inequity indexes reveal remarkable socioeconomic inequities in older peoples access to secondary healthcare in all three countries. In Portugal, the one country facing most severe healthcare budget cuts and where user charges apply also to GP visits, even access to primary care exhibits a significant pro-rich concentration. If reducing inequities in older peoples access to healthcare remains a policy objective, austerity measures maybe pulling the Olive belt countries further away from achieving it.

Estimating the Impact of a Policy Reform on Benefit Take-Up: The 2001 Extension to the Minimum Income Guarantee for UK Pensioners

In 2001 the Minimum Income Guarantee for UK pensioners was reformed, changing the structure and level of benefits. We evaluate the behavioural response to this reform, using nonparametric analysis comparing a sample of pensioners interviewed before and another interviewed after the reform, matching their simulated pre- and post-reform entitlements and other characteristics. We compare the results with conventional parametric methods and also ex ante matching, and we consider the effect of measurement error in simulated entitlements. The response of take-up to the reform is found to be significant and positive, with evidence of larger impacts from the nonparametric analysis.

Removing Homeownership Bias in Taxation: The Distributional Effects of Including Net Imputed Rent in Taxable Income

The income tax systems of most countries entail a favourable treatment of homeownership, compared to rental-occupied housing. Such ‘homeownership bias’ and its consequences for a wide range of economic outcomes have long been recognised in the economic literature. Although a removal of the homeownership bias is generally advocated on efficiency grounds, its distributional implications are often neglected, especially in a cross-country perspective. In this paper, we aim to fill this gap by investigating the first-order effects, in terms of distribution of income and work incentives, of removing the income tax provisions favouring homeownership. We consider six European countries – Belgium, Germany, Greece, Italy, the Netherlands and the UK – that exhibit important variation in terms of income tax treatment of homeowners. Using the multi-country tax benefit model EUROMOD, we analyse the distributional consequences of including net imputed rent in the taxable income definition that applies in each country, together with the removal of existing special tax treatments of incomes or expenses related to the main residence; thus, we provide a measure of the homeownership bias. We implement three tax policy scenarios. In the first, imputed rent is included in the taxable income of homeowners, while at the same time existing mortgage interest tax relief schemes and taxation of cadastral incomes are abolished. In the two further revenue-neutral scenarios, the additional tax revenue raised through the taxation of imputed rent is redistributed to taxpayers, through either a tax rate reduction or a tax exemption increase. The results show how including net imputed rent in the tax base might affect inequality in each of the countries considered. Housing taxation appears to be a promising avenue for raising additional revenues, or lightening taxation of labour, with no inequality-increasing side effects.

Accounting for Tax Evasion Profiles and Tax Expenditures in Microsimulation Modelling. The BETAMOD Model for Personal Income Taxes in Italy

The paper presents the main characteristics of BETAMOD, a static microsimulation model that reproduces the Italian personal income tax (IRPEF), as well as local income taxes, namely the regional and municipal additional income taxes, building on a detailed reconstruction of tax legislation. With respect to the vast majority of existing tax microsimulation models, the peculiarities of BETAMOD concern two aspects: the inclusion of a detailed set of tax expenditures, and the estimation of individual-specific tax evasion rates, which account for the total individual income level, its composition in terms of income sources, and the geographical area of residence.

The Impact of Acute Health Shocks on the Labour Supply of Older Workers: Evidence from Sixteen European Countries

We investigate the consequences of experiencing an acute health shock, namely the first onset of myocardial infarction, stroke or cancer, on the labour supply of older workers in Europe. Despite its policy relevance to social security sustainability, the question has not yet been empirically addressed in the European context. We combine data from the English Longitudinal Study of Ageing and the Survey of Health, Ageing and Retirement in Europe and cover sixteen European countries, representative of different institutional settings, in the years spanning from 2002 to 2013. The empirical strategy builds on the availability of an extremely rich set of health and labour market information as well as of panel data. To remove the potential confounding bias, a selection on observables strategy is adopted, while the longitudinal dimension of data allows controlling for time invariant unobservables. Implementation is based on a combination of stratification and propensity score matching methods. Results reveal that experiencing an acute health shock on average doubles the risk of an older worker leaving the labour market, and is accompanied by a deterioration in physical functioning and mental health, as well as by a reduction in perceived life expectancy. Men’s labour market response appears driven by the onset of impairment acting as a barrier to work. In in the case of women, preferences for leisure and financial constraints seem to play a prominent role. Heterogeneity in behavioural responses across countries – with the largest labour supply reductions observed in the Nordic and Eastern countries, and England – are suggestive of a relevant role played by social security generosity.