Demographic Uncertainty in Europe. Implications on Macro Economic Trends and Pension Reforms
AbstractAgeing is a main concern in Western Europe for the present half century. It impinges heavily upon the financing of retirement because a shrinking labour force will entail decelerating growth. Moreover, contrary to popular opinion and to most prospective studies which rely on deterministic demographic projections, the determinants of population size and structure are stochastic. The present paper makes use of the INGENUE2 model to assess the economic impact of demographic uncertainty in Western Europe. Demographic uncertainty affects saving, financial conditions and growth significantly from year 2025 onwards. Worst case scenarios can have crippling effects on the financing of public pension under present retirement policies. It makes all the more necessary to study alternatives. We simulate a policy that involves the development of a funding system to substitute to part of the projected increase in the contribution rate, both under deterministic and stochastic demographic forecasts
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Bibliographic InfoPaper provided by CEPII research center in its series Working Papers with number 2008-22.
Date of creation: Oct 2008
Date of revision:
Computable General Equilibrium Models; International capital flows; Life cycle models and saving; Demographic trends and forecasts;
Find related papers by JEL classification:
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
This paper has been announced in the following NEP Reports:
- NEP-AGE-2009-01-03 (Economics of Ageing)
- NEP-ALL-2009-01-03 (All new papers)
- NEP-CMP-2009-01-03 (Computational Economics)
- NEP-EEC-2009-01-03 (European Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Vincent Delbecque & Isabelle Méjean & Lise Patureau, 2008. "Social Competition and Firms' Location Choices," Working Papers 2008-12, CEPII research center.
- Matthieu Crozet & Pamina Koenig & Vincent Rebeyrol, 2008. "Exporting to Insecure Markets: a Firm-Level Analysis," Working Papers 2008-13, CEPII research center.
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