Grant Period : Mar 2018 to Feb 2021
Faculty : FONG, Joelle H.
The demographic transition is one of the biggest challenges facing decision-makers and policymakers not only in Asia, but also around the globe. Ageing populations are associated with higher social expenditure in a number of areas, the two most prominent being pensions and healthcare. This project (a collection of six essays) focuses – squarely – on these two areas of economic activity that are of particular importance to the demographic transition.
How pension systems are organized and the economic, institutional and social factors influencing the development of pension arrangements determine to a large extent whether public pension systems can adequately respond to the ageing challenge. the first essay on pensions reviews the state of population ageing in Asia, and examines how societal ageing is straining existing models of social support and public pension systems in China, India, and Japan. the second essay applies the notion of path dependency in public policy studies to examine the institutionalization of provident funds in Singapore, Hong Kong, India, Kenya and other former British colonies. With the shift from defined benefit to defined contribution pension systems, individuals take on greater responsibility in managing their own retirement savings and decumulation. the third essay thus turns attention the importance of financial literacy among older adults. Empirical analysis is performed to assess levels of financial knowledge among older Singaporeans in the Singapore Life Panel (SLP®) and evaluate the extent to which financial knowledge is associated with common financial and investment mistakes.
the three proposed essays on health and ageing are empirical in nature. Non-communicable diseases and the loss of functional independence pose a substantial economic burden for older adults due to out-of-pocket health and long-term care spending over a long duration. One essay aims to estimate the excess health/ medical spending attributable to older Americans with severe disability as compared to non-disabled persons using micro data from U.S. household surveys. Repeated cross-sectional analysis allows insights into whether and how cost burdens have shifted across income groups over time. Using a nationally representative dataset of oldest-old in mainland China, another essay quantifies the additional health/ medical spending attributable to older persons with non-communicable diseases, such as diabetes, cardiovascular disease, and cancer. the final essay uses the same Chinese dataset and builds on prior work to examine and evaluate the sequence of loss in functional capability among the urban versus rural oldest-old adults.