Demographics and savings: can we reconcile the evidence?
It is well known that over the next few decades there will be significant changes in the demographic structures of nearly all developed countries; in the absence of massive immigration, or of catastrophic new fatal illnesses, by the middle of the next century the ratio of people of working age to those of retirement age will, in many countries, be only around one half the current level. Such dramatic demographic change could have a powerful impact upon saving behaviour in both the public and private sectors and upon asset prices and wages. But estimates of how great the effects will be differ substantially depending on what kind of evidence is used. This paper first shows that projections based on a calibrated, overlapping generations model of the economy where agents display life-cycle savings behaviour are similar in broad shape to projections based on panel data estimates of the relation between demographics and saving. But the implications for the impact of demographic change of evidence from household data sets are strikingly different. This paper presents an explanation of this and assesses how far alternative pieces of evidence can be reconciled. The implications for asset prices, savings rates, capital accumulation and labour productivity over the next fifty years are explored.
|Date of creation:||16 Aug 1997|
|Contact details of provider:|| Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE|
Phone: (+44) 020 7291 4800
Fax: (+44) 020 7323 4780
Web page: http://www.ifs.org.uk
More information through EDIRC
|Order Information:|| Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE|
When requesting a correction, please mention this item's handle: RePEc:ifs:ifsewp:97/06. 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: (Emma Hyman)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.