The "Second Dividend" and the Demographic Structure
The demographic structure of a country influences economic activity. The "second dividend" modifies growth. Accordingly, in general equilibrium, the second dividend and the demographic structure are interrelated. This paper aims at assessing empirically the "second dividend" in a dynamic, empirical and intertemporal setting that allows for measuring its impact on growth, its intergenerational redistributive effects, and its interaction with the demographic structure. The article uses a general equilibrium model with overlapping generations, an energy module and a public finance module. Policy scenarios compare the consequences of recycling a carbon tax through lower proportional income tax rather than higher public lumpsum expenditures. They are computed for two countries with different demographics (France and Germany). Results suggest that the magnitude of the "second dividend" is significantly related with the demographic structure. The more concentrated the demographic structure on cohorts with higher income and saving rate, the stronger the effect on capital supply of the second dividend. The second dividend weighs on the welfare of relatively aged working cohorts. It fosters the wellbeing of young working cohorts and of future generations. The more concentrated the demographic structure on aged working cohorts, the higher the intergenerational redistributive effects of the second dividend.
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.:
- John, A. & Pecchenino, R. & Schimmelpfennig, D. & Schreft, S., 1995. "Short-lived agents and the long-lived environment," Journal of Public Economics, Elsevier, vol. 58(1), pages 127-141, September.
- K. Sato, 1967. "A Two-Level Constant-Elasticity-of-Substitution Production Function," Review of Economic Studies, Oxford University Press, vol. 34(2), pages 201-218.
- Pearce, David W, 1991. "The Role of Carbon Taxes in Adjusting to Global Warming," Economic Journal, Royal Economic Society, vol. 101(407), pages 938-48, July.
- Börsch-Supan, Axel & Heiss, Florian & Winter, Joachim, 2000.
"Pension reform, capital markets, and the rate of return,"
589, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
- Axel Boersch-Supan & Florian Heiss & Alexander Ludwig & Joachim Winter, 2003. "Pension Reform, Capital Markets and the Rate of Return," German Economic Review, Verein für Socialpolitik, vol. 4(2), pages 151-181, 05.
- Börsch-Supan, Axel H. & Heiss, Florian & Ludwig, Alexander & Winter, Joachim, 2003. "Pension reform, capital markets and the rate of return," Munich Reprints in Economics 20200, University of Munich, Department of Economics.
- Florian Heiss & Alexander Ludwig & Joachim Winter, 2002. "Pension reform, capital markets, and the rate of return," MEA discussion paper series 02023, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
- R. M. Solow, 1974.
"Intergenerational Equity and Exhaustible Resources,"
Review of Economic Studies,
Oxford University Press, vol. 41(5), pages 29-45.
- R. M. Solow, 1973. "Intergenerational Equity and Exhaustable Resources," Working papers 103, Massachusetts Institute of Technology (MIT), Department of Economics.
- Parry, Ian & Bento, Antonio, 1999.
"Tax deductions, environmental policy, and the"double dividend"hypothesis,"
Policy Research Working Paper Series
2119, The World Bank.
- Parry, Ian W. H. & Bento, Antonio M., 2000. "Tax Deductions, Environmental Policy, and the "Double Dividend" Hypothesis," Journal of Environmental Economics and Management, Elsevier, vol. 39(1), pages 67-96, January.
- Frederic Ghersi and Jean-Charles Hourcade, 2006. "Macroeconomic Consistency issues in E3 Modeling: The Continued Fable of the Elephant and the Rabbit," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 39-62.
- de Bovenberg, A Lans & Mooij, Ruud A, 1994.
"Environmental Levies and Distortionary Taxation,"
American Economic Review,
American Economic Association, vol. 84(4), pages 1085-89, September.
- Miles, David, 1999.
"Modelling the Impact of Demographic Change upon the Economy,"
Royal Economic Society, vol. 109(452), pages 1-36, January.
- Miles, David K, 1997. "Modelling the Impact of Demographic Change Upon the Economy," CEPR Discussion Papers 1762, C.E.P.R. Discussion Papers.
- Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
- Daron Acemoglu, 2001.
"Directed Technical Change,"
NBER Working Papers
8287, National Bureau of Economic Research, Inc.
- Olivier Sassi & Renaud Crassous & Jean-Charles Hourcade & Vincent Gitz & Henri Waisman & Celine Guivarch, 2010.
"IMACLIM-R: a modelling framework to simulate sustainable development pathways,"
International Journal of Global Environmental Issues,
Inderscience Enterprises Ltd, vol. 10(1/2), pages 5-24.
- Jean Charles Hourcade & Olivier Sassi & Renaud Crassous & Vincent Gitz & Henri Waisman & Céline Guivarch, 2010. "IMACLIM-R: a modelling framework to simulate sustainable development pathways," Post-Print hal-00566290, HAL.
- Oecd, 2006. "Projecting OECD Health and Long-Term Care Expenditures: What Are the Main Drivers?," OECD Economics Department Working Papers 477, OECD Publishing.
- Bovenberg, A. Lans & Heijdra, Ben J., 1998. "Environmental tax policy and intergenerational distribution," Journal of Public Economics, Elsevier, vol. 67(1), pages 1-24, January.
- Broer, D.P. & Westerhout, E.W.M.T. & Bovenberg, A.L., 1994.
"Taxation, pension and saving in a small open economy,"
Other publications TiSEM
667e0603-e83e-4340-aad4-5, Tilburg University, School of Economics and Management.
- Broer, D Peter & Westerhout, Ed W M T & Bovenberg, A Lans, 1994. " Taxation, Pensions and Saving in a Small Open Economy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(3), pages 403-24.
- Jean-Charles Hourcade, Mark Jaccard, Chris Bataille, and Frederic Ghersi, 2006. "Hybrid Modeling: New Answers to Old Challenges Introduction to the Special Issue of The Energy Journal," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 1-12.
- Epstein, Larry G & Zin, Stanley E, 1991. "Substitution, Risk Aversion, and the Temporal Behavior of Consumption and Asset Returns: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 99(2), pages 263-86, April.
When requesting a correction, please mention this item's handle: RePEc:cec:wpaper:1405. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Climate Economics Chair)
If references are entirely missing, you can add them using this form.