[McMaster Crest] QSEP
Research Institute for Quantitative Studies in Economics and Population

Abstracts of Research Reports: 2004/05

  1. Financial Planning For Later Life: Subjective Understandings of Catalysts and Constraints

    by Candace L. Kemp, Carolyn J. Rosenthal and Margaret Denton

    This paper examines the conditions under which individuals begin or do not begin making financial plans for their later years. The data are drawn from a sample of mid- and later-life individuals (n=51) who participated in qualitative, life-history interviews. Participants identified three types of circumstances that acted as both catalysts and constraints to their planning: financial, personal and familial. Catalytic financial influences included employer programs and enrolment in retirement courses, while job loss and unforeseen expenses were viewed as constraints. Personal influences such as health and age, as well as familial transitions such as the death of a spouse, divorce, or remarriage served as both catalysts and constraints, depending on the individual. For example, divorce was viewed by some as a constraint, while others viewed it as a catalyst. Participants' locations in the social structure influenced the onset of financial preparation, however, subjective perceptions of life circumstances were also pivotal.

  2. Exploring the Use of a Nonparametrically Generated Instrumental Variable in the Estimation of a Linear Parametric Equation

    by Frank T. Denton

    The use of a nonparametrically generated instrumental variable in estimating a single-equation linear parametric model is explored, using kernel and other smoothing functions. The method, termed IVOS (Instrumental Variables Obtained by Smoothing), is applied in the estimation of measurement error and endogenous regressor models. Asymptotic and small-sample properties are investigated by simulation, using artificial data sets. IVOS is easy to apply and the simulation results exhibit good statistical properties. It can be used in situations in which standard IV cannot because suitable instruments are not available.

  3. Borrowing Constraints, the Cost of Precautionary Saving, and Unemployment Insurance

    by Thomas F. Crossley and Hamish W. Low

    Job losers exhibit significant heterogeneity in wealth holdings and in the marginal propensity to consume transitory income. We consider potential sources of this heterogeneity, whether (some of) the unemployed face borrowing constraints, and the implications of this heterogeneity for unemployment insurance. We show theoretically how the optimal benefit can depend significantly on borrowing constraints, and on other (non-precautionary) savings motives. We report empirical evidence that (i) a quarter of job losers cannot borrow for current consumption, (ii) this constraint is binding for a much smaller fraction, and (iii) that "excess sensitivity" is not limited to the constrained.

  4. Healthy Aging at Older Ages: Are Income and Education Important?

    by Neil J. Buckley, Frank T. Denton, A. Leslie Robb, and Byron G. Spencer

    Being higher on the socioeconomic scale is correlated with being in better health, but is there is a causal relationship? Using three years of longitudinal data for individuals aged 50 and older from the Canadian Survey of Labour and Income Dynamics, we study the health transitions for those who were in good health in the first year, focussing especially on income and education. The initial good health restriction removes from the sample those whose incomes may have been affected by a previous history of poor health, thus avoiding a well known problem of econometric endogeneity. We then ask, for those in good health, whether later transitions in health status are related to socioeconomic status. We find that they are that changes in health status over the subsequent two years are related in particular to income and education.

  5. Where Have All The Home Care Workers Gone?

    by Margaret Denton, Isik Urla Zeytinoglu, Sharon Davies, and Danielle Hunter

    Because of the on-going need to co-ordinate care and ensure its continuity, issues of retention and recruitment are of major concern to home care agencies. The purpose of this study was to examine the factors affecting turnover decisions among visiting home care workers. In 1996, 620 visiting nurses and personal support workers from three non-profit agencies in a mid-sized Ontario city participated in a survey on their work and health. By the fall of 2001, 320 of these respondents had left the agencies. Analysis of the turnover data showed a temporal association between the implementation of managed competition and turnover.

    We mailed a self-completion questionnaire asking about their reasons for leaving the agency and about their subsequent work experience. One hundred and sixty nine (53%) responded to this survey. Respondents indicated dissatisfaction with the implementation of managed competition, with pay, hours of work, lack of organizational support and work load as well as health reasons, including work-related stress, as reasons for leaving. Less than one-third remained employed in the home care field, one-third worked in other health care workplaces and one-third were no longer working in health care.

    Their responses to our 1996 survey were used to predict turnover. Results show that nurses were more likely to leave if they had unpredictable hours of work, if they worked shifts or weekends and had higher levels of education. They were more likely to stay with the agency if they reported working with difficult clients, had predictable hours, good benefits, had children under 12 years of age in the home, and were younger. Personal support workers were more likely to leave if they reported higher symptoms of stress, and had difficult clients. They were more likely to stay if they worked weekends and perceived their benefits to be good.

  6. Survey Results of the New Health Care Worker Study: Implications of Changing Employment Patterns

    by Isik Urla Zeytinoglu, Margaret Denton, Sharon Davies, Andrea Baumann, Jennifer Blythe, and Ann Higgins

    This report examines the effects of contemporary employment arrangements on the quality of nursing work life, and the implications of these employment arrangements for individual nurses, the hospitals, and also for the organization. First we look at nurse work status (full-time, part-time or casual job), contract status (permanent or temporary), and employment preference as factors affecting commitment to the hospital and profession, job satisfaction, retention in the organization, and absenteeism from work. Second, we examine stress, burnout, and physical occupational health problems (in particular, musculoskeletal disorders), as affecting nurse and hospital outcomes.

    This project investigated how the quality of nursing worklife and career choices differ for nurses in full-time, part-time and casual employment, and whether nurses who have the employment arrangements they prefer enjoy a standard of worklife that encourages retention. We collected data for the study from 1,396 nurses employed at three large teaching hospitals in Southern Ontario (Hamilton Health Sciences, Kingston General Hospital, and St. Michael's Hospital in Toronto) using the New Health Care Worker Questionnaire. Results indicate that although a substantial majority of the nurses were employed in the type of job that they preferred, problems of stress, burnout and physical health problems were reported. Further, these problems affected the nurses' job satisfaction, commitment, and propensity to leave the hospitals.

  7. Unexploited Connections Between Intra- and Inter-temporal Allocation

    by Thomas F. Crossley and Hamish W. Low

    This paper shows that a power utility specification of preferences over total expenditure (ie. CRRA preferences) implies that intratemporal demands are in the PIGL/PIGLOG class. This class generates (at most) rank two demand systems and we can test the validity of power utility on cross-section data. Further, if we maintain the assumption of power utility, and within period preferences are not homothetic, then the intertemporal preference parameter is identified by the curvature of Engel curves. Under the power utility assumption, neither Euler equation estimation nor structural consumption function estimation is necessary to identify the power parameter. In our empirical work, we use demand data to estimate the power utility parameter and to test the assumption of the power utility representation. We find estimates of the power parameter larger than obtained from Euler equation estimation, but we reject the power specification of within period utility.

  8. Measurement Errors in Recall Food Expenditure Data

    by Naeem Ahmed, Matthew Brzozowski and Thomas F. Crossley

    Household expenditure data is an important input into the study of consumption and savings behaviour and of living standards and inequality. Because it is collected in many surveys, food expenditure data has formed the basis of much work in these areas. Recently, there has been considerable interest in properties of different ways of collecting expenditure information. It has also been suggested that measurement error in expenditure data seriously affects empirical work based on such data.

    The Canadian Food Expenditure Survey asks respondents to first estimate their household's food expenditures and then record food expenditures in a diary for two weeks. This unique experiment allows us to compare recall and diary based expenditure data collected from the same individuals. Under the assumption that the diary measures are "true" food consumption, this allows us to observe errors in measures of recall food consumption directly, and to study the properties of those errors. Under this assumption, measurement errors in recall food consumption data appear to be substantial, and they do not have many of the properties of classical measurement error. In particular, they are neither uncorrelated with true consumption nor conditionally homoscedastic. In addition, they are not well approximated by either a normal or log normal distribution.

    We also show evidence that diary measures are themselves imperfect, suffering for example, from "diary exhaustion". This suggests alternative interpretations for the differences between recall and diary consumption measures.

    Finally, we compare estimates of income and household size elasticities of per capita food consumption based on the two kinds of expenditure data and, in contrast to some previous work, find little difference between the two.

  9. The Effect of Health Changes and Long-term Health on the Work Activity of Older Canadians

    Doreen Wing Han Au, Thomas F. Crossley, and Martin Schellhorn

    Using longitudinal data from the Canadian National Population Health Survey (NPHS), we study the relationship between health and employment among older Canadians. We focus on two issues: (1) the possible problems with self- reported health, including endogeneity and measurement error, and (2) the relative importance of health changes and long-term health in the decision to work. We contrast estimates of the impact of health on employment using self-assessed health, an objective health index contained in the NPHS - the HUI3, and a "purged" health stock measure. Our results suggest that health has an economically significant effect on employment probabilities for Canadian men and women aged 50 to 64, and that this effect is underestimated by simple estimates based on self-assessed health. We also corroborate recent U.S. and U.K. findings that changes in health are important in the work decision.

  10. Population Aging and the Macroeconomy: Explorations in the Use of Immigration as an Instrument of Control

    by Frank T. Denton and Byron G. Spencer

    Simulation methods are employed to explore the effects of immigration as a control instrument to offset the economic and demographic consequences of low fertility rates and aging population distribution. A neoclassical economic growth model is coupled with a demographic projection model. The combined model is calibrated and used in a series of experiments. The experiments are designed to generate the time paths of a hypothetical but realistic economic-demographic system under alternative assumptions about immigration policy. The government seeks to optimize policy results in the model, according to a specified criterion function. The model is calibrated with Canadian data but some experiments are carried out using initial populations and fertility rates of other countries.

  11. Users and Suppliers of Physician Services: A Tale of Two Populations

    by Frank T. Denton, Amiram Gafni, and Byron G. Spencer

    Physician shortages and their implications for required increases in the physician population are matters of considerable interest in many health care systems, in light especially of the widespread phenomenon of population ageing. To determine the extent to which shortages exist one needs to study the population of users of physician services as well as that of the physicians themselves. In this paper we study both, using the province of Ontario, Canada, as an example. The user population is projected and the implications for requirements calculated, conditional on given utilization rates. On the supplier side, the age and other characteristics of the (active) physician population are examined and patterns of withdrawal investigated. The necessary future growth of supply is calculated, assuming alternative levels of present shortages. The effects of population change on requirements are found to be smaller in the future than in the decade 1981- 1991, in the aggregate, not far from the effects in 1991-2001, but highly variable among different categories of physicians.

  12. MEDS-D Users' Manual

    by Frank T. Denton, Christine H. Feaver, and Byron G. Spencer

    This report is the Users' Manual that accompanies MEDS-D, the demographic component of a new Windows-based version of the MEDS (Models of the Economic-Demographic System) software. MEDS-D is designed for projecting the population, labour force, and number of households for Canada as a whole, for each of the provinces, and for the territories. The projections are made year-by-year, and extend as far as 2051.

    The time path of projections is determined by assumptions about fertility, mortality, international and interprovincial migration, household formation, labour force participation and unemployment. "Standard", "high growth", and "slow growth" projections are provided. It is easy to explore the implications of alternative assumptions and to input newly available data.

  13. MEDS-E Users' Manual

    by Frank T. Denton, Christine H. Feaver, and Byron G. Spencer

    This report is the Users' Manual that accompanies MEDS-E, the economic component of a new Windows-based version of the MEDS (Models of the Economic-Demographic System) software. MEDS-E is designed to make use of the all-Canada population and labour force projections from MEDS-D in projecting various Canadian macro-economic aggregates. The projections, which are made year-to-year, extend as far as 2051.

    The time paths of the economic projections are determined by the population and labour inputs, type of aggregate production function chosen, rates of depreciation, and investment, consumption, and other parameters. A set of "standard" assumptions is provided, but users can change those assumptions.

  14. Socioeconomic Influences on the Health of Older Canadians: Estimates Based on Two Longitudinal Surveys

    by Neil J Buckley, Frank T Denton, A Leslie Robb and Byron G Spencer

    It is well established that there is a positive statistical relationship between socioeconomic status (SES) and health but identifying the direction of causation is difficult. This study exploits the longitudinal nature of two Canadian surveys, the Survey of Labour and Income Dynamics and the National Population Health Survey, to study the link from SES to health (as distinguished from the health-to-SES link). For people aged 50 and older who are initially in good health we examine whether changes in health status over the next two to four years are related to prior SES, as represented by income and education. Although the two surveys were designed for different purposes and had different questions for income and health, the evidence they yield with respect to the probability of remaining in good health is similar. Both suggest that SES does play a role and that the differences across SES groups are quantitatively significant, increase with age, and are much the same for men and women.

  15. Population Aging in Canada: Software for Exploring the Implications for the Labour Force and the Productive Capacity of the Economy

    by Frank T. Denton, Christine H. Feaver, and Byron G. Spencer

    This report has two purposes: (1) to introduce a new version of the MEDS (Models of the Economic Demographic System) software; and (2) to apply it in a series of illustrative projections. The software is designed to illustrate the medium- to longer-term responses of the Canadian population and economy to a wide range of factors on either the demographic side, such as changes in rates of fertility, migration, and mortality, or the economic side, such as changes in the rate of technical progress or the educational attainment of young people or of new immigrants. "Standard" projections are provided, together with nineteen alternative projections. (For some illustrative projections, see QSEP Webpage.) The range of projections indicates the breadth of applications for which MEDS has been designed. It serves also to provide some quantitative measures of the likely demographic and economic consequences of population aging, and indicates the scope for evaluating policy initiatives by means of simulation.

Last updated: Dec 19, 2005.
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