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The distributional impact of population ageing in New Zealand

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  • Omar A. Aziz
  • Christopher Ball
  • John Creedy
  • Jesse Eedrah

Abstract

This paper examines the potential distributional impacts of demographic change, particularly population ageing, and changes to labour force participation that are projected to arise over the next 50 years. The approach involves calibration weighting of the Treasury's microsimulation model, Taxwell, based on the New Zealand Household Economic Survey. The weights are adjusted for each projection year to ensure that a range of population aggregates (by age and gender) match the projected values provided by Statistics New Zealand. Measures of income inequality and poverty, along with the incidence of income tax, goods and services tax and a number of components of government spending (namely health and education) across age groups, are obtained. The results suggest that population ageing and expected changes in labour force participation, in isolation, do not have a significant impact on population-level measures of income inequality.

Suggested Citation

  • Omar A. Aziz & Christopher Ball & John Creedy & Jesse Eedrah, 2015. "The distributional impact of population ageing in New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 49(3), pages 207-226, August.
    • Handle: RePEc:taf:nzecpp:v:49:y:2015:i:3:p:207-226
    DOI: 10.1080/00779954.2014.890023
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    References listed on IDEAS

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    1. Ron Crawford & Grant Johnston, 2004. "Household incomes in New Zealand: The impact of the market, taxes and government spending, 1987/88–1997/98," Treasury Working Paper Series 04/20, New Zealand Treasury.
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    Cited by:

    1. Mathias Dolls & Karina Doorley & Alari Paulus & Hilmar Schneider & Eric Sommer, 2019. "Demographic change and the European income distribution," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(3), pages 337-357, September.
    2. Omoniyi B. Alimi & David C. Maré & Jacques Poot, 2018. "More Pensioners, Less Income Inequality? The Impact of Changing Age Composition on Inequality in Big Cities and Elsewhere," Advances in Spatial Science, in: Roger R. Stough & Karima Kourtit & Peter Nijkamp & Uwe Blien (ed.), Modelling Aging and Migration Effects on Spatial Labor Markets, chapter 0, pages 133-159, Springer.
    3. Omoniyi B Alimi & David C Maré & Jacques Poot, 2017. "More pensioners, less income inequality?," Working Papers 17_02, Motu Economic and Public Policy Research.

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