Studies on the Relationship Between the Elderly and Public Policies

TitleStudies on the Relationship Between the Elderly and Public Policies
Publication TypeThesis
Year of Publication2000
AuthorsHarris, ALenae
Date Published2000
UniversityUniversity of Maryland, College Park
KeywordsDemographics, Employment and Labor Force, Methodology, Other, Public Policy, Retirement Planning and Satisfaction

A number of important demographic phenomena--rising life expectancy, the post-war baby boom, and the subsequent baby bust--will have dramatic effects on the age distribution of the U.S. population well into the next century. In particular, the American population is aging. This dissertation looks at the relationships between two very different public policies and the aging population. The first relationship is a possible intergenerational conflict over public education spending at the local level. Previous research by Poterba (1997) shows a negative effect from aging on public education spending at the state level. Using school district data, the second chapter shows that at the local level the elderly also have a negative and statistically significant effect on per-pupil education spending; however, the district-level results are much smaller than previous state-level results. Several pieces of evidence are then presented to bolster my results which indicate that the elderly are much less likely to support increased spending at the state level than at the local level. The second relationship is the interaction between elderly retirement behavior and the largest federal public spending program, Social Security. To project the aging population's future claims for Social Security benefits, it is crucial to have a reliable model of retirement behavior which incorporates the incentives of the Social Security system. A promising model of retirement is the Stock and Wise (1990a) option-value model. Their structural retirement model predicts retirement behavior based on the forward-looking incentives created by social security and pensions. However, they estimated their model using an unrepresentative sample of 1,500 salesmen working for one large firm. The third chapter tests whether the Stock and Wise option-value model can be applied to a more representative sample of males from the Health and Retirement Study. When the option-value model is applied to the HRS sample, the model fails to yield economically meaningful parameters. My results suggest that additional work is needed to accurately model and project future retirement behavior of the growing elderly population.

Endnote Keywords

Models, Theoretical

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ISBN 0-493-09995-6

Short TitleStudies on the Relationship Between the Elderly and Public Policies
Citation Key6330