SHARE and its Policy Lessons from International Comparisons Axel Börsch-Supan Coordinator SHARE Israel Van Leer Institute, Jerusalem, 17 October 2012

 Look over the fence and learn from others  Benchmarking  US vs. Europe & Israel  How do public policies work?  Do they reach their intended aims?  Do they avoid unintended side-effects? – macro level – micro level Cross-national variation of policies Cross-national data: SHARE International comparisons

Example 1: Does spending for the old crowd out spending for the young? (Börsch-Supan and Reil-Held) IT DK FR EU DE No convincing relation to age structure of country! Per capita expenditure dedicated to the elderly Per capita expenditure dedicated to the young Compare time trend by country

Example 2: The effect of health care spending on health status (Hendrik Jürges) ● US

Example 3: Is retirement really bliss? Mental retirement : early retirement and cognition (Adam, Bonsang, Perelman et al. 2007; Rohwedder and Willis 2010)

Example 4: The lump of labor fallacy (Börsch-Supan with OECD employment data) Share of early retirees among males (in %) Unemployment rate (in %) The old should make place… …for the young!

Causality issues in analyses based on cross-national data  Macro evidence needs micro foundation:  usually many other influential variables  aggregates almost always simultaneously determined  Gold standard: laboratory experiments in natural sciences  usually not an option for policy evaluation  replace by “historical (natural) experiments”  Even in micro data: selectivity and reverse causality  time as strongest instrument: longitudinal panel data  policy changes (“regression discontinuity designs”)  Design of SHARE

PL CZ IE EE PT SI HU SE DK DE CH FR SP IT GR BE NL LU AT Wave 4 participation (2010): plus EE, LU, HU, SI, PT: now 20 countries Wave 1 participation (2004): 11 countries: NL, DE, AT, DK, BE, FR, CH, SP, IT, GR, SE (+UK) Waves 2 and 3 (2006 and 08): plus CZ, PL, IE, IL: 15 countries IL UK Korea Japan China India SHARELAND 62,000 resps, 130,000 i‘views Mexico, Brazil, Argentina Europe as a Laboratory in a global network

 Generic survey instrument to conduct Computer Assisted Personal Interviews (CAPI)  Internet based translation tool (LMU)  Online overview of country specifics Minimize artifacts: Ex-ante harmonization

 Objective measures of health help distinguishing actual differences in health from different response styles to extract genuine policy effects Source: Jürges, 2006 Minimize artifacts: Performance measures and biomarkers

Result: Reporting styles of general health status indicators

Mental retirement: Rohwedder and Willis Use pension policies as instruments to isolate causal direction

Mental retirement Early retirement: bliss or detriment?  Very controversial since causality is everything:  health  early retirement  early retirement  health  Börsch-Supan and Jürges 2006: Life satisfaction after early retirement  Adam, Bonsang, Perelman et al. 2007: Depreciation of cognitive reserve after early retirement  Coe, Lindeboom (et al.) 2008+: Does early retirement kill?  Zweimüller et al 2010: Plant closures and mortality  Rohwedder and Willis 2010: Mental retirement  Bonsang, Perelman et al. 2010: Cognitive functioning  Coe, Gaudecker, Lindeboom & Maurer 2012: Early retirement and cognition  Fabrizio Mazzoni 2013: Cognitive functioning

Cross-cutting policy results  Guglielmo Weber: Parental status and Retirement income Importance of intergenerational linkages: Books in parental home increase early earnings. Effects persists onto later earnings.  Mathis Schröder: Health and Employment Experience of redundancy reduces health at retirement. Unemployment benefits appear to reduce this effect.  Agar Brugiavini: Work and Retirement I Gaps in employment history reduce retirement income. Maternity benefits first increases female LFP, thus retirement income, but U-shape pattern  Johannes Siegrist/Morten Wahrendorf: Work and Retirement II Work quality improves health at retirement. Active labour market policies are associated with higher work quality and thus better health  Nicolas Sirven: Health Care Utilisation in Europe Doctor density helps to improve preventive care, positive effects on health at retirement. Could reduce health disparities across Europe.  Radim Bohacek/Michal Myck: Histories of War Strong effects of persecution on later-life health and income situation 14

Figure 6: Labor Force Participation of youth, young and elderly males Source: German Mikrozensus Shocks to the system: 1972, 1984 and 1997 Exploit “policy experiments”: Pension policy changes and youth employ. (Börsch-Supan/Schnabel) Use pension policy discontinuities to show the fallacy in the „lump of labor“

Further aims: The Crisis 16 ….there is still a lot more to happen, and to find out!  e.g., on the long-term effects of the crisis and effectiveness of policy interventions (old age poverty, health, labor market participation,…)  especially in countries with funding problems

The SubPrime-Financial-PublicDebt-Euro-Crisis 17 ….there is still a lot more to happen, and to find out!  e.g., on the long-term effects of the crisis and effectiveness of policy interventions (old age poverty, health, labor market participation,…)  especially in countries with funding problems

Wave 5-6-7: Scientific aims  Poverty and social exclusion  Biomarker collection in all countries, central laboratory (SDU in DK)  Well-being (Sarkozy Commission): - time use/day reconstruction method - mixed mode: paper/telefone/Internet  Life histories revisited  Cognition, productivity and retirement

Conclusions  International comparisons very powerful in detecting, isolating and measuring policy effects  Substantial harmonization efforts necessary to avoid spurious effects through differences in language, institutions, interpretation, and methods  „Historical experiments“ greatly help in identification. Requires genuine panel data, preferably with retrotspecive dimension:  SHARELIFE in connection with administrative records  Again: requires knowledge of history and how the country-specific institutions changed  Israel‘s contribution: history, migration, policy experiments 19 Use !