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Fertility, Mortality, and the Developed World’s Demographic Transition

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  • Hans Fehr
  • Sabine Jokisch
  • Laurence Kotlikoff

Abstract

This study uses Fehr, Jokisch, and Kotlikoff’s (2004a) dynamic general equilibrium model to analyze the effects of changes in fertility and mortality on the developed world’s demographic transition. The model features three regions – the U.S., Japan, and the EU-15 – and incorporates age- and time-specific fertility and mortality rates, detailed fiscal institutions, and international capital mobility, subject to adjustment costs. Our simulations confirm the offsetting fiscal and economic consequences of both higher fertility and lower mortality rates. The simulations indicate very minor effects on the developed world’s rather bleak baseline transition path from either major increases in fertility rates or major reductions in mortality rates.

Suggested Citation

  • Hans Fehr & Sabine Jokisch & Laurence Kotlikoff, 2004. "Fertility, Mortality, and the Developed World’s Demographic Transition," CESifo Working Paper Series 1326, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_1326
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    References listed on IDEAS

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    Cited by:

    1. Hans Fehr & Sabine Jokisch & Laurence J Kotlikoff, 2006. "Will China Eat Our Lunch or Take Us to Dinner? Simulating the Transition Paths of the US, EU, Japan and China," RBA Annual Conference Volume,in: Christopher Kent & Anna Park & Daniel Rees (ed.), Demography and Financial Markets Reserve Bank of Australia.
    2. Patrick GEORGES & Marcel MERETTE & Aylin SECKIN, "undated". "Should Canada Diversify its Trade Pattern? An Overlapping-Generations CGE Analysis of Trade and Ageing," EcoMod2009 21500036, EcoMod.
    3. Krzysztof Makarski & Joanna Tyrowicz, 2017. "On welfare effects of increasing retirement age," GRAPE Working Papers 10, GRAPE Group for Research in Applied Economics.
    4. repec:eee:ecmode:v:70:y:2018:i:c:p:351-369 is not listed on IDEAS
    5. Bodrova, Vera & Gvozdeva, Margarita & Kazakova, Maria, 2015. "Methods of Long-term Forecasting: Comparative Analysis and Foreign Experience of Applying," Published Papers 2310, Russian Presidential Academy of National Economy and Public Administration.
    6. Jokisch, Sabine & Kotlikoff, Laurence J., 2007. "Simulating the Dynamic Macroeconomic and Microeconomic Effects of the FairTax," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(2), pages 225-252, June.
    7. repec:eee:hapoch:v1_59 is not listed on IDEAS
    8. Mario Catalan & Nicolas E Magud, 2012. "A Tradeoff between the Output and Current Account Effects of Pension Reform," IMF Working Papers 12/283, International Monetary Fund.
    9. repec:acb:cbeeco:2014-616 is not listed on IDEAS
    10. Simon Gilchrist & Egon Zakrajsek, 2007. "Investment and the Cost of Capital: New Evidence from the Corporate Bond Market," NBER Working Papers 13174, National Bureau of Economic Research, Inc.
    11. Melnikov, N.B. & O'Neill, B.C. & Dalton, M.G., 2012. "Accounting for household heterogeneity in general equilibrium economic growth models," Energy Economics, Elsevier, vol. 34(5), pages 1475-1483.
    12. Naito, Takumi & Zhao, Laixun, 2009. "Aging, transitional dynamics, and gains from trade," Journal of Economic Dynamics and Control, Elsevier, vol. 33(8), pages 1531-1542, August.
    13. repec:eee:hapoch:v1_179 is not listed on IDEAS
    14. repec:eee:hapoch:v1_713 is not listed on IDEAS
    15. Lee, R., 2016. "Macroeconomics, Aging, and Growth," Handbook of the Economics of Population Aging, Elsevier.
    16. Fehr, Hans, 2016. "CGE modeling social security reforms," Journal of Policy Modeling, Elsevier, vol. 38(3), pages 475-494.
    17. Hans Fehr & Sabine Jokisch, 2006. "Demographischer Wandel und internationale Finanzmärkte," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(4), pages 501-517, November.
    18. Hans Fehr & Sabine Jokisch & Laurence J. Kotlikoff, 2005. "Will China Eat Our Lunch or Take Us Out to Dinner? Simulating the Transition Paths of the U.S., EU, Japan, and China," NBER Working Papers 11668, National Bureau of Economic Research, Inc.
    19. Rossana Merola & Douglas Sutherland, 2013. "Fiscal Consolidation and the Implications of Social Spending for Long-Term Fiscal Sustainability," Review of Economics and Institutions, Università di Perugia, vol. 4(3).
    20. Fernando Perera-Tallo, 2012. "Optimal Retirement Age and Aging Population," 2012 Meeting Papers 728, Society for Economic Dynamics.
    21. George Kudrna & Chung Tran & Alan Woodland, 2015. "Facing Demographic Challenges: Pension Cuts or Tax Hikes," ANU Working Papers in Economics and Econometrics 2015-626, Australian National University, College of Business and Economics, School of Economics.
    22. repec:kap:openec:v:28:y:2017:i:4:d:10.1007_s11079-016-9429-5 is not listed on IDEAS
    23. Knell, Markus, 2013. "The Intergenerational Distribution of Demographic Fluctuations in Unfunded and Funded Pension Systems," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79830, Verein für Socialpolitik / German Economic Association.
    24. Tran, Chung, 2018. "Temptation and taxation with elastic labor," Economic Modelling, Elsevier, vol. 70(C), pages 351-369.
    25. Kudrna, George & Tran, Chung & Woodland, Alan, 2015. "The dynamic fiscal effects of demographic shift: The case of Australia," Economic Modelling, Elsevier, vol. 50(C), pages 105-122.

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    Keywords

    demographic transition; computable general equilibrium model (CGE); fertility; mortality;

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