Macroeconomic Impacts of Demographic Change in Scotland: A Computable General Equilibrium Analysis
AbstractThis paper combines a multi-period economic Computable General Equilibrium (CGE) modelling framework with a demographic model to analyse the macroeconomic impact of the projected demographic trends in Scotland. Demographic trends are defined by the existing fertility-mortality rates and the level of annual net-migration. We employ a combination of a demographic and a CGE simulation to track the impact of changes in demographic structure upon macroeconomic variables under different scenarios for annual migration. We find that positive net migration can cancel the expected negative impact upon the labour market of other demographic changes. (Pressure on wages, falling employment). However, the required size of the annual net-migration is far higher than the current trends. The policy implication suggested by the results is that active policies are needed to attract migrants. We nevertheless report results when varying fertility and mortality assumptions. The impact of varying those assumptions is rather small.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2623.
Length: 31 pages
Date of creation: Feb 2007
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Find related papers by JEL classification:
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-31 (All new papers)
- NEP-CMP-2007-03-31 (Computational Economics)
- NEP-MAC-2007-03-31 (Macroeconomics)
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