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Employment and Growth in an Aging Society. A Simulation Study for Austria

Author

Listed:
  • Baumgartner, Josef

    (Austrian Institute of Economic Research (WIFO))

  • Hofer, Helmut

    (Department of Economics and Finance, Institute for Advanced Studies (IHS), Vienna)

  • Kaniovski, Serguei

    (Austrian Institute of Economic Research (WIFO))

  • Schuh, Ulrich

    (Institute for Advanced Studies (IHS), Vienna)

  • Url, Thomas

    (Austrian Institute of Economic Research (WIFO))

Abstract

In this study we use a long run macroeconomic model for Austria to simulate the effects of aging on employment, output growth, and the solvency of the social security system. By disaggregating the population into six age cohorts and modelling sex specific participation rates for each cohort, we are able to account for the future demographic trends. Apart from a baseline scenario, we perform three alternative simulations that highlight the effects of aging from different perspectives. These include (1) purely demographic developments, (2) increasing labour market imperfections, and (3) higher economic growth due to a productivity shock.

Suggested Citation

  • Baumgartner, Josef & Hofer, Helmut & Kaniovski, Serguei & Schuh, Ulrich & Url, Thomas, 2004. "Employment and Growth in an Aging Society. A Simulation Study for Austria," Economics Series 163, Institute for Advanced Studies.
  • Handle: RePEc:ihs:ihsesp:163
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    References listed on IDEAS

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    1. Alois Guger & Christine Mayrhuber, 2001. "Labour Force Participation and Public Pension System. Changes in the Labour Market and Their Impact on the Pension Dependency Ratio," Austrian Economic Quarterly, WIFO, vol. 6(2), pages 47-56, April.
    2. Hayashi, Fumio, 1982. "Tobin's Marginal q and Average q: A Neoclassical Interpretation," Econometrica, Econometric Society, vol. 50(1), pages 213-224, January.
    3. Solow, Robert M., 2000. "Growth Theory: An Exposition," OUP Catalogue, Oxford University Press, edition 2, number 9780195109030, November.
    4. Barry P. Bosworth & Susan M. Collins, 2003. "The Empirics of Growth: An Update," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 113-206.
    5. Manfred Koch & Christian Thimann, 1999. "From Generosity to Sustainability: The Austrian Pension System and Options for its Reform," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 26(1), pages 21-38, March.
    6. Alois Guger & Christine Mayrhuber, 2001. "Erwerbsbeteiligung und Alterssicherung. Auswirkungen der Arbeitsmarktentwicklung auf die Pensionsquote," WIFO Monatsberichte (monthly reports), WIFO, vol. 74(2), pages 111-119, February.
    7. Lawrence F. Katz & Olivier Blanchard, 1999. "Wage Dynamics: Reconciling Theory and Evidence," American Economic Review, American Economic Association, vol. 89(2), pages 69-74, May.
    8. Willi Leibfritz & Deborah Roseveare & Douglas Fore & Eckhard Wurzel, 1995. "Ageing Populations, Pension Systems and Government Budgets: How Do They Affect Saving?," OECD Economics Department Working Papers 156, OECD Publishing.
    9. Thomas URL & Josef BAUMGARTNER & Helmut HOFER & Serguei KANIOVSKI & Andreas U. SCHUH, 2010. "A Long-run Macroeconomic Model of the Austrian Economy (A-LMM)," EcoMod2004 330600143, EcoMod.
    10. Josef Baumgartner & Helmut Hofer & Serguei Kaniovski & Ulrich Schuh & Thomas Url, 2004. "A Long-run Macroeconomic Model of the Austrian Economy (A-LMM). Model Documentation and Simulations," WIFO Working Papers 224, WIFO.
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    Cited by:

    1. Serguei Kaniovski & Karl Aiginger & Fritz Breuss & Gunther Tichy & Thomas Url & Ewald Walterskirchen, 2006. "Teilstudie 22: Modellsimulationen ausgewählter wirtschaftspolitischer Maßnahmen," WIFO Studies, WIFO, number 27461, December.
    2. Kluge, Jan & Lappoehn, Sarah & Plank, Kerstin, 2020. "The Determinants of Economic Competitiveness," IHS Working Paper Series 24, Institute for Advanced Studies.

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    More about this item

    Keywords

    Economic growth; Aging; Austria;
    All these keywords.

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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