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How large are the effects of population aging on economic inequality?

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  • Joshua R. Goldstein
  • Ronald D. Lee

Abstract

The attention given to Piketty (2014) has renewed interest in the level and causes of inequality. In this paper, we look at the role that population aging plays in increasing economic inequality. We provide estimates of the magnitudes of the effects on inequality of three different factors related to population aging: capital intensification, changing population age structure, and increasing longevity. Changing age structure is found to have a small effect on aggregate inequality, while capital deepening and longevity-based life cycle savings are shown to be more important. Taken together, our findings suggest that aging has a substantial effect on economic inequality.

Suggested Citation

  • Joshua R. Goldstein & Ronald D. Lee, 2014. "How large are the effects of population aging on economic inequality?," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 12(1), pages 193-209.
    • Handle: RePEc:vid:yearbk:v:12:y:2014:i:1:p:193-209
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    2. Sara Lindersson & Elena Raffetti & Maria Rusca & Luigia Brandimarte & Johanna Mård & Giuliano Di Baldassarre, 2023. "The wider the gap between rich and poor the higher the flood mortality," Nature Sustainability, Nature, vol. 6(8), pages 995-1005, August.
    3. Nolan, Brian & Richiardi, Matteo & Valenzuela, Luis, 2018. "The Drivers of Inequality in Rich Countries," INET Oxford Working Papers 2018-15, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    4. Nolan, Matt, 2018. "Did tax-transfer policy change New Zealand disposable income inequality between 1988 and 2013?," Working Paper Series 7661, Victoria University of Wellington, Chair in Public Finance.
    5. Nolan, Matt, 2018. "Did tax-transfer policy change New Zealand disposable income inequality between 1988 and 2013?," Working Paper Series 20842, Victoria University of Wellington, Chair in Public Finance.
    6. Malá Ivana, 2022. "Ageing of the European Population and Deprivation," Economics and Culture, Sciendo, vol. 19(1), pages 43-53, June.
    7. Kim, Hyun Kyung & Lee, Sang-Hyop, 2021. "The effects of population aging on South Korea’s economy: The National Transfer Accounts approach," The Journal of the Economics of Ageing, Elsevier, vol. 20(C).

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