Impacts of an Ageing Society on Macroeconomics and Income Inequality – The Case of Germany since the 1980s
This paper is concerned with the interplay between demography and macroeconomics on one hand and macroeconomics and income inequality on the other hand. For this purpose, several estimation equations are derived by econometric methods (on the empirical basis of the 1984-2010 German Socio-Economic Panel (SOEP) waves). In concrete terms, the macroeconomic variables inflation, economic growth, and unemployment are at first connected with the German demographic ageing; afterwards, these connections are used to produce a nexus between German income inequality and the stated macroeconomic variables (additionally to the exogenous effects of ageing). For the empirical periods examined (1983-2009), there have been a) a (slightly) negative influence of demographic ageing on the inflation rate, b) a (weak) positive effect of ageing on the level – not on the increases (reductions) – of economic growth rates, and c) a somewhat stronger positive impact of demographic ageing on unemployment rates. While the measured income inequality is upwards directly (exogenously) driven by demographic ageing, the mechanisms through the different macroeconomic channels are more difficile: inflation is positively and unemployment negatively correlated with income inequality, and regarding economic growth a (slightly) concave effect upon income inequality has been observed. All these findings imply that demographic ageing, ceteris paribus and by tendency, diminishes income inequality via inflation and unemployment rate, which is also valid for economic growth (within the empirically relevant value range for the German demographic ageing). But on balance, there is an overcompensating direct, exogenous impact of demographic ageing on inequality in the model used in this paper, and this causes tendencies towards a remarkable increase of German income inequality until 2060. These tendencies are more pronounced in the forecast variant in which a strongly ageing population is assumed.
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.:
- Jamie Hall & Andrew Stone, 2010. "Demography and Growth," RBA Bulletin, Reserve Bank of Australia, pages 15-23, June.
- Albanesi, Stefania, 2007.
"Inflation and inequality,"
Journal of Monetary Economics,
Elsevier, vol. 54(4), pages 1088-1114, May.
- Stefania Albanesi, "undated". "Inflation and Inequality," Working Papers 199, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Albanesi, Stefania, 2002. "Inflation and Inequality," CEPR Discussion Papers 3470, C.E.P.R. Discussion Papers.
- Stefania Albanesi, 2001. "Inflation and Inequality," LIS Working papers 323, LIS Cross-National Data Center in Luxembourg.
- Stefania Albanesi, 2002. "Inflation and Inequality," Macroeconomics 0201002, EconWPA.
- Gert Wagner & Jan Göbel & Peter Krause & Rainer Pischner & Ingo Sieber, 2008. "Das Sozio-oekonomische Panel (SOEP): Multidisziplinäres Haushaltspanel und Kohortenstudie für Deutschland – Eine Einführung (für neue Datennutzer) mit einem Ausblick (für erfahrene Anwender)," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 2(4), pages 301-328, December.
- Thomas Lindh & Bo Malmberg & Thieß Petersen, 2010. "Die ökonomischen Konsequenzen der gesellschaftlichen Alterung," Wirtschaftsdienst, Springer;German National Library of Economics, vol. 90(1), pages 54-63, January.
- Andreas Peichl & Nico Pestel & Hilmar Schneider, 2012. "Does Size Matter? The Impact Of Changes In Household Structure On Income Distribution In Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(1), pages 118-141, 03.
- Peichl, Andreas & Pestel, Nico & Schneider, Hilmar, 2010. "Does Size Matter? The Impact of Changes in Household Structure on Income Distribution in Germany," IZA Discussion Papers 4770, Institute for the Study of Labor (IZA).
- Andreas Peichl & Nico Pestel & Hilmar Schneider, 2010. "Does Size Matter? The Impact of Changes in Household Structure on Income Distribution in Germany," SOEPpapers on Multidisciplinary Panel Data Research 280, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Andreas Peichl & Nico Pestel & Hilmar Schneider, 2010. "Does Size Matter? The Impact of Changes in Household Structure on Income Distribution in Germany," CESifo Working Paper Series 3219, CESifo Group Munich.
- Desai, Raj M. & Olofsgard, Anders & Yousef, Tarik M., 2005. "Inflation and inequality: does political structure matter?," Economics Letters, Elsevier, vol. 87(1), pages 41-46, April.
- Takeo Hori, 2009. "Inequality and growth: the roles of life expectancy and relative consumption," Journal of Economics, Springer, vol. 96(1), pages 19-40, January.
- Hoover, Gary A. & Giedeman, Daniel C. & Dibooglu, Sel, 2009. "Income inequality and the business cycle: A threshold cointegration approach," Economic Systems, Elsevier, vol. 33(3), pages 278-292, September.
- Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, vol. 113(487), pages 326-344, 04.
- Niko Gobbin & Glenn Rayp & Dirk Van de gaer, 2007. "Inequality And Growth: From Micro Theory To Macro Empirics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(4), pages 508-530, 09.
- N. Gobbin & G. Rayp & D. Van De Gaer, 2004. "Inequality and Growth: From Micro Theory to Macro Empirics," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 04/258, Ghent University, Faculty of Economics and Business Administration.
- Farebrother, R W, 1980. "The Durbin-Watson Test for Serial Correlation When There Is No Intercept in the Regression," Econometrica, Econometric Society, vol. 48(6), pages 1553-1563, September.
- Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
- Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements," SOEPpapers on Multidisciplinary Panel Data Research 1, DIW Berlin, The German Socio-Economic Panel (SOEP).
- H. Naci Mocan, 1999. "Structural Unemployment, Cyclical Unemployment, and Income Inequality," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 122-134, February.
- Erika Schulz, 2008. "Weniger Menschen, aber Arbeitskräfteangebot bleibt bis 2025 stabil," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 75(40), pages 596-602.
- Cysne, Rubens P. & Maldonado, Wilfredo L. & Monteiro, Paulo Klinger, 2005. "Inflation and income inequality: A shopping-time approach," Journal of Development Economics, Elsevier, vol. 78(2), pages 516-528, December. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:inq:inqwps:ecineq2012-272. 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: (Maria Ana Lugo)
If references are entirely missing, you can add them using this form.