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  5. Inequality, Aging, and Welfare State Policies
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Inequality, Aging, and Welfare State Policies

Paper Session

Sunday, Jan. 7, 2024 1:00 PM - 3:00 PM (CST)

Marriott Riverwalk, Valero
Hosted By: Association for Social Economics & International Association for Feminist Economics
  • Chair: Pablo Troncoso, University of Houston

Universal Long-Term Care Reform: Evidence from South Korea

Secil Akin
,
American University
Sung Ah Bahk
,
American University
Lídia Brun
,
American University
Ignacio González
,
American University
Aina Puig
,
American University

Abstract

Using the Korean Labor and Income Panel Study (KLIPS), we show the impact of providing unpaid eldercare on adult-child caregivers’ labor market participation. Our findings suggest a significant inverse relationship between the adverse health status of parents and their children’s work decisions, both in terms of working status and work hours. This negative effect is more pronounced among female workers. Based on this empirical finding, we evaluate the introduction of the Korean Long-term Care Insurance System (LTCI) in 2008. This policy is one of the very few universal long-term care policies around the world and was specifically designed to ameliorate the burden that care work imposes on families. To analyze the causal effects of the LTCI reform, we use a regression kink design (RKD) model as in Card et al. (2015). We exploit various “kinks” introduced by the policy: five in-kind benefit levels for health status, as well as three levels of copayment that depend on household income and wealth levels. We find evidence that female caregivers primarily respond to LTCI benefits by adjusting their labor supply decisions on the extensive margin while males respond on the intensive margin. We estimate that the introduction of LTCI led to a 5% increase in female labor market participation and a 3% decrease in the number of females primarily engaged in caregiving (excluding childcare). Also, we estimate the elasticity of hours worked with respect to the LTCI reform is 0.6% for male caregivers. Our results indicate that that the LCTI reform has been pivotal in driving labor market outcomes of women after 2008.

Incomplete Take-up Rate of Social Benefits: The Role of Pension Knowledge

Clement Joubert
,
World Bank
Pablo Troncoso
,
University of Houston

Abstract

We study the take-up rate of pension transfers in the Chilean pension system. Pension transfers have non-contributory and contributory components. We use a pension reform in 2008 that increased the value of the benefits and eligibility criteria as a shock to measure the take-up rate. We use a unique database that combines monthly administrative records with a representative panel survey. We can observe actual and self-reported information that determines eligibility to the pension benefits and claiming outcomes. We document an incomplete take-up rate of pension benefits. Since the non-contributory take-up rate is around 55%, the contributory component reaches 90% between 2008 and 2017. Later we find that pension knowledge is a crucial variable to explain the low take-up rate among people with no contributions to the pension system. The magnitude of pension knowledge’s parameter is significant even after controlling for financial inclusion, financial literacy, how big the benefit relative to total income is and if a family member receives another benefit from the government. Finally, we estimate the reduction in inequality and poverty among retirees if everyone applied for the benefits.

Gender Roles and Division of Housework: Do We Model Our Parents?

Binderiya Byambasuren
,
American University
Jessie Wang
,
RAND Corporation

Abstract

Home production disproportionately falls on women and shapes women's labor market decisions. At the same time, social psychologists suggest that gender role perceptions formed during childhood shape the gendered division of labor in home production. This paper examines this link by focusing on the 'modeling effect' by parents on the development of gender role perceptions during childhood. It then investigates whether children model their parents' behavior in their marriage in adulthood. We first provide a theoretical framework with two household members whose division of household labor is endogenous to their parents' division of household labor, which in turn shapes their labor market decisions. Then, we test the model predictions using housework hours of married couples spanning two generations of families in the Panel Study of Income Dynamics. Preliminary results suggest evidence that the gendered division of housework persists intergenerationally. Growing up observing a more egalitarian division of household labor between parents increases the likelihood that adult children also demonstrate a more egalitarian division of household labor. We also disaggregate the findings by the gender of the parent and the adult child to examine whether fathers doing more household labor show differential outcomes for sons and daughters and vice versa for the mothers. Understanding how the gendered division of household labor persists intergenerationally sheds light on policies such as paid family leave and workplace flexibility. Policies encouraging fathers to be equally involved in childcare and household labor may have long-lasting implications regarding gender role perceptions for the
younger generations.

Divorce, Pension Wealth and Private Wealth

Eva Sierminska
,
Luxembourg Institute of Socio-Economic Research
Karla Cordova
,
Pomona College
Markus Grabka
,
German Institute for Economic Research-Berlin

Abstract

In this paper, we focus on the impact divorce can have on private wealth outcomes and the role of pension wealth in this regard. Germany has a three pillar pension system that includes a compensation scheme for statutory and company pensions in case of divorce. We investigate whether the compensation scheme is sufficient to reduce/eliminate the wealth gap after divorce. Previous work explored wealth at older ages due to employment trajectories (Nutz & Lersch, 2021) and marital histories (Bonnet et al. 2022). We incorporate both in the analysis and find the impact of pension wealth on the gender wealth gap. Preliminary results show a positive effect of divorced compared to married and never married and a negative effect in relation to cohabitors. The effect varies across age cohorts.
JEL Classifications
  • B5 - Current Heterodox Approaches
  • I1 - Health