Tuesday, February 28th, 2017 1:12 pm

Aging

Question A: Without changes in policy, a rising share of people who are over age 65 will exert a substantial downward influence on per capita real GDP in western European countries.

Responses
 

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Responses weighted by each expert's confidence

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Question B: In European countries where the share of those over 65 is rising, there are net social benefits to adjusting retirement ages for state-financed (including pay-as-you-go) pension systems upwards, so that revised retirement ages better reflect longer life expectancies.

Responses
 

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Responses weighted by each expert's confidence

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Question A Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Aghion Philippe Aghion Harvard Did Not Answer
Bio/Vote History
         
Allen Franklin Allen Imperial College London Agree 7
It depends on how easy it is for them to keep working. The easier it is the less likely this scenario will unfold.
Bio/Vote History
         
Antras Pol Antras Harvard Strongly Agree 8
Hard to argue against "downward influence". A different matter is whether GDP per capita will fall, which is possible but unlikely
Bio/Vote History
         
Baldwin Richard Baldwin The Graduate Institute Geneva Did Not Answer
Bio/Vote History
         
Besley Timothy J. Besley LSE Agree 8
It is not just about policy but also about shifting social norms. Traditional notions of "retirement" are now increasingly outdated.
Bio/Vote History
         
Blanchard Olivier Blanchard Peterson Institute Strongly Agree 9
The direct effect is nearly by construction. The indirect effects, on pay as you go, on fiscal balance, are well documented
Bio/Vote History
         
Bloom Nicholas Bloom Stanford Agree 8
Bio/Vote History
         
Blundell Richard William Blundell University College London Agree 8
Current policies reduce incentives to work after 65. Good evidence that these can be reformed successfully.
Bio/Vote History
         
Bénassy-Quéré Agnès Bénassy-Quéré Paris School of Economics Strongly Agree 8
Bio/Vote History
         
Carletti Elena Carletti Bocconi Agree 4
Bio/Vote History
         
Danthine Jean-Pierre Danthine Paris School of Economics Agree 3
Bio/Vote History
         
De Grauwe Paul De Grauwe LSE Agree 7
Without changes in legislation the fiscal burden of pensions will require further taxation of the working population
Bio/Vote History
         
Eeckhout Jan Eeckhout University College London Agree 8
Bio/Vote History
         
Fehr Ernst Fehr Universität Zurich Did Not Answer
Bio/Vote History
         
Freixas Xavier Freixas Universitat Pompeu Fabra Agree 6
European pension and care systems are still ill prepared to cope with the increased aging.
Bio/Vote History
         
Fuchs-Schündeln Nicola Fuchs-Schündeln Goethe-Universität Frankfurt Agree 9
Bio/Vote History
         
Galí Jordi Galí Universitat Pompeu Fabra Agree 9
Bio/Vote History
         
Garicano Luis Garicano LSE Strongly Agree 8
Bio/Vote History
         
Giavazzi Francesco Giavazzi Bocconi Uncertain 5
indeed it depends on policies. Aging accompanied by improvemente in human capital of the youth could have the opposite effect.
Bio/Vote History
         
Griffith Rachel Griffith University of Manchester Disagree 7
What matters is the ratio of economically dependent to economically productive people. How this will change with ageing is unclear.
Bio/Vote History
         
Guerrieri Veronica Guerrieri Chicago Booth Agree 8
Bio/Vote History
         
Guiso Luigi Guiso Einaudi Institute for Economics and Finance Uncertain 5
Bio/Vote History
         
Hellwig Martin Hellwig Max Planck Institute for Research on Collective Goods Strongly Agree 10
As the statement is formulated, it is a trusm. The real issue is whether people's standards of living will fall below what they are used to.
Bio/Vote History
         
Honohan Patrick Honohan Trinity College Dublin Agree 8
Average withdrawal age from labour market too low.
Bio/Vote History
         
Kleven Henrik Kleven LSE Uncertain 6
There are negative effects, but it also depends on the reasons for the rising dependency ratio (e.g. better health is good for growth)
Bio/Vote History
         
Krahnen Jan Pieter Krahnen Goethe University Frankfurt Agree 7
The emphasis is on "without change in policy" - but it is those changes that will weigh heavily on the policy agenda, e.g. retirement age.
Bio/Vote History
         
Krusell Per Krusell Stockholm University Agree 9
Mechanical argument but correct; behavioral responses exist but are limited.
Bio/Vote History
         
Kőszegi Botond Kőszegi Central European University Agree 7
Bio/Vote History
         
La Ferrara Eliana La Ferrara Bocconi Agree 5
Bio/Vote History
         
Leuz Christian Leuz Chicago Booth Agree 6 Bio/Vote History
         
Meghir Costas Meghir Yale Strongly Agree 9
Bio/Vote History
         
Neary Peter Neary Oxford Agree 7
Automation could conceivably offset fall in labor input to population ratio but unlikely
Bio/Vote History
         
O'Rourke Kevin O'Rourke Oxford Agree 5
Bio/Vote History
         
Pagano Marco Pagano Università di Napoli Federico II Agree 5
People over 65 tend to have lower productivity and require more spending on pensions and health care provision than others.
Bio/Vote History
         
Pastor Lubos Pastor Chicago Booth Strongly Agree 7
Bio/Vote History
         
Persson Torsten Persson Stockholm University Did Not Answer
Bio/Vote History
         
Pissarides Christopher Pissarides LSE Did Not Answer
Bio/Vote History
         
Portes Richard Portes London Business School Agree 5
If migration is further restricted, we shall need higher participation rates and retraining for those over 65, hence policy interventions.
Bio/Vote History
         
Prendergast Canice Prendergast Chicago Booth Agree 8
Bio/Vote History
         
Reichlin Lucrezia Reichlin London Business School Strongly Agree 9
Bio/Vote History
         
Repullo Rafael Repullo CEMFI Strongly Agree 6
Bio/Vote History
         
Rey Hélène Rey London Business School Agree 7
Bio/Vote History
         
Schoar Antoinette Schoar MIT Strongly Agree 8
Bio/Vote History
         
Van Reenen John Van Reenen MIT Agree 8
Key thing is to extend working life through extending retirement age and making it more flexible to enable healthy older people to wrok
Bio/Vote History
         
Vickers John Vickers Oxford Agree 5
Bio/Vote History
         
Voth Hans-Joachim Voth University of Zurich Agree 5
this is a supposition that seems logical but empirical evidence seems weak in general
Bio/Vote History
         
Weder di Mauro Beatrice Weder di Mauro Gutenberg University Mainz and INSEAD Agree 9
Bio/Vote History
         
Whelan Karl Whelan University College Dublin Agree 8
Bio/Vote History
         
Wyplosz Charles Wyplosz The Graduate Institute Geneva Uncertain 1
Mechanically, this seems true on both the demand and supply side. But many things may go in the other direction.
Bio/Vote History
         
Zilibotti Fabrizio Zilibotti Universität Zurich Agree 7
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Aghion Philippe Aghion Harvard Did Not Answer
Bio/Vote History
         
Allen Franklin Allen Imperial College London Strongly Agree 7
Yes, people need to work longer given the demographic distribution and increased longevity.
Bio/Vote History
         
Antras Pol Antras Harvard Strongly Agree 8
It's not just higher life expectancy, but also better health at current health retirement ages
Bio/Vote History
         
Baldwin Richard Baldwin The Graduate Institute Geneva Did Not Answer
Bio/Vote History
         
Besley Timothy J. Besley LSE Strongly Agree 10
Indexing to life expectancy makes sense and helps to depoliticize these decisions in future once the rule has been widely agreed.
Bio/Vote History
         
Blanchard Olivier Blanchard Peterson Institute Strongly Agree 9
increase in retirement age, given increase in life expectancy and state of health, seems the least painful way to adjust.
Bio/Vote History
         
Bloom Nicholas Bloom Stanford Agree 9
Bio/Vote History
         
Blundell Richard William Blundell University College London Agree 8
For many, working later in life is attractive relative to higher costs of social security. Requires redistribution to those in poor health.
Bio/Vote History
         
Bénassy-Quéré Agnès Bénassy-Quéré Paris School of Economics Strongly Agree 8
Bio/Vote History
         
Carletti Elena Carletti Bocconi No Opinion
Bio/Vote History
         
Danthine Jean-Pierre Danthine Paris School of Economics Agree 3
Promoting flexibility in the retirement age (with actuarially fair rent adjustments) is more important than compulsory later retirement
Bio/Vote History
         
De Grauwe Paul De Grauwe LSE Agree 8
Bio/Vote History
         
Eeckhout Jan Eeckhout University College London Agree 8
Bio/Vote History
         
Fehr Ernst Fehr Universität Zurich Did Not Answer
Bio/Vote History
         
Freixas Xavier Freixas Universitat Pompeu Fabra Strongly Agree 6
The low natality combined with higher life expectation imply a heavy burden on young generations.
Bio/Vote History
         
Fuchs-Schündeln Nicola Fuchs-Schündeln Goethe-Universität Frankfurt Agree 9
Bio/Vote History
         
Galí Jordi Galí Universitat Pompeu Fabra Agree 8
Bio/Vote History
         
Garicano Luis Garicano LSE No Opinion
Bio/Vote History
         
Giavazzi Francesco Giavazzi Bocconi Strongly Agree 8
in some countries (e.g. Italy) retirement age isindedd already indexed to average life expectancy
Bio/Vote History
         
Griffith Rachel Griffith University of Manchester Agree 7
Bio/Vote History
         
Guerrieri Veronica Guerrieri Chicago Booth Strongly Agree 8
Bio/Vote History
         
Guiso Luigi Guiso Einaudi Institute for Economics and Finance Strongly Agree 9
this is the most sensible policy to guarantee the sustainability of pay as you go systems in European countries
Bio/Vote History
         
Hellwig Martin Hellwig Max Planck Institute for Research on Collective Goods Agree 8
People not only live longer but also remain vigorous and healthy for longer. Reduce distirbutional conflict between generations.
Bio/Vote History
         
Honohan Patrick Honohan Trinity College Dublin Agree 6
Bio/Vote History
         
Kleven Henrik Kleven LSE Strongly Agree 7
Bio/Vote History
         
Krahnen Jan Pieter Krahnen Goethe University Frankfurt Strongly Agree 7
Increasing retirement age will go hand in hand with changing work conditions. As a consequence, productivity of elderly is likely to rise.
Bio/Vote History
         
Krusell Per Krusell Stockholm University Agree 9
To the extent there is cont'd general productivity growth and we get richer, people may want more leisure, but this effect is likely small.
Bio/Vote History
         
Kőszegi Botond Kőszegi Central European University Strongly Agree 9
Bio/Vote History
         
La Ferrara Eliana La Ferrara Bocconi Uncertain 6
Need to consider distributional impact: increase in life expectancy is higher for high-wage earners.
Bio/Vote History
         
Leuz Christian Leuz Chicago Booth Agree 3
If benefits defined as pc GDP, not so clear if defined broader. Likely unpopular so indexing is option. Consider alternatives as well.
Bio/Vote History
         
Meghir Costas Meghir Yale Strongly Agree 9
Bio/Vote History
         
Neary Peter Neary Oxford Strongly Agree 7
Especially if not compulsory, such changes could even be welcomed by increasingly healthy 65-year olds
Bio/Vote History
         
O'Rourke Kevin O'Rourke Oxford Agree 6
Bio/Vote History
         
Pagano Marco Pagano Università di Napoli Federico II Agree 5
By rebalancing PAYG pension systems such reforms reduce the burden of taxes and contributions on young workers. and the implied distortions.
Bio/Vote History
         
Pastor Lubos Pastor Chicago Booth Strongly Agree 10
In addition, more developed private pensions would help.
Bio/Vote History
         
Persson Torsten Persson Stockholm University Did Not Answer
Bio/Vote History
         
Pissarides Christopher Pissarides LSE Did Not Answer
Bio/Vote History
         
Portes Richard Portes London Business School Agree 5
Yes, but - we like our jobs, but there are many who do not, some suffer even from having to work to 65. Raising retirement age is regressive
Bio/Vote History
         
Prendergast Canice Prendergast Chicago Booth Agree 9
Bio/Vote History
         
Reichlin Lucrezia Reichlin London Business School Agree 9
Bio/Vote History
         
Repullo Rafael Repullo CEMFI Strongly Agree 8
Bio/Vote History
         
Rey Hélène Rey London Business School Agree 8
Bio/Vote History
         
Schoar Antoinette Schoar MIT Strongly Agree 10
Bio/Vote History
         
Van Reenen John Van Reenen MIT Strongly Agree 9
Bio/Vote History
         
Vickers John Vickers Oxford Agree 5
Bio/Vote History
         
Voth Hans-Joachim Voth University of Zurich Strongly Agree 1
The benefits for the finances of pay-as-you-go systems are fairly obvious...
Bio/Vote History
         
Weder di Mauro Beatrice Weder di Mauro Gutenberg University Mainz and INSEAD Strongly Agree 10
Bio/Vote History
         
Whelan Karl Whelan University College Dublin Strongly Agree 10
Bio/Vote History
         
Wyplosz Charles Wyplosz The Graduate Institute Geneva Strongly Agree 7
Either this or reduced pensions.
Bio/Vote History
         
Zilibotti Fabrizio Zilibotti Universität Zurich Agree 7
Bio/Vote History
         

About the European IGM Economic Experts Panel

This panel explores the views of European economists on vital public policy issues. It does this by polling them on important policy questions, by including a way for them to explain their answers briefly if they wish, and by disseminating these responses directly to the public in a simple format.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the main areas of economics, to be geographically diverse, and to include older and younger scholars. As with the IGM’s US panel, the experts are all outstanding researchers in their fields. The panel includes recipients of top national and international prizes in economics, fellows of the Econometric society and the European Economic Association, members of distinguished national and international policymaking bodies in Europe, recipients of significant grants for economic research, highly accomplished affiliates and program directors of the Centre for Economic Policy Research and the National Bureau of Economic Research, and past and current editors of leading academic journals in the profession. This approach not only provides a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters in Europe and beyond.

Questions for the European IGM Economic Experts Panel are emailed individually to all members of the panel. They are phrased as statements with which one can agree or disagree. The experts are also asked how confident they are in their knowledge of the issue associated with the question (10 being highest). Each panelist responds electronically at his or her convenience. Panelists may consult whatever resources they like before answering. They may also include brief comments with their responses, or provide links to relevant sources.

It is important to explain one aspect of our voting process. In some instances a panelist may neither agree nor disagree with a statement, and there can be two very different reasons for this. One case occurs when an economist knows a lot about a topic and yet sees the evidence on the exact claim at hand as ambiguous. In such cases our panelists vote "uncertain". A second case relates to statements on topics so far removed from the economist's knowledge that he or she does not feel well placed to judge. In this case, our panelists vote "no opinion".

Panelists suggest many of the questions themselves. Members of the public are also welcome to suggest questions (see link below). Although IGM faculty members are responsible for deciding the final version of each question, we send a draft of the question to the panel in advance and invite them to point out problems with the wording if they see any. This process helps us to reduce vagueness or problems of interpretation.

The panel data are copyrighted by the Initiative on Global Markets and will be analyzed for an article to appear in a peer-reviewed journal.

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