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Macroeconomic Impacts of Demographic Change in Scotland: A Computable General Equilibrium Analysis


  • Lisenkova, Katya

    () (University of Strathclyde)

  • McGregor, Peter

    () (University of Strathclyde)

  • Pappas, Nikos

    () (University of Strathclyde)

  • Swales, Kim

    () (University of Strathclyde)

  • Turner, Karen

    () (University of Strathclyde)

  • Wright, Robert E.

    () (University of Strathclyde)


This paper combines a multi-period economic Computable General Equilibrium (CGE) modelling framework with a demographic model to analyse the macroeconomic impact of the projected demographic trends in Scotland. Demographic trends are defined by the existing fertility-mortality rates and the level of annual net-migration. We employ a combination of a demographic and a CGE simulation to track the impact of changes in demographic structure upon macroeconomic variables under different scenarios for annual migration. We find that positive net migration can cancel the expected negative impact upon the labour market of other demographic changes. (Pressure on wages, falling employment). However, the required size of the annual net-migration is far higher than the current trends. The policy implication suggested by the results is that active policies are needed to attract migrants. We nevertheless report results when varying fertility and mortality assumptions. The impact of varying those assumptions is rather small.

Suggested Citation

  • Lisenkova, Katya & McGregor, Peter & Pappas, Nikos & Swales, Kim & Turner, Karen & Wright, Robert E., 2007. "Macroeconomic Impacts of Demographic Change in Scotland: A Computable General Equilibrium Analysis," IZA Discussion Papers 2623, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2623

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    References listed on IDEAS

    1. Harrigan, Frank & McGregor, Peter G. & Dourmashkin, Neil & Perman, Roger & Swales, Kim & Yin, Ya Ping, 1991. "AMOS : A macro-micro model of Scotland," Economic Modelling, Elsevier, vol. 8(4), pages 424-479, October.
    2. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, June.
    3. Greenwood, Michael J, et al, 1991. "Migration, Regional Equilibrium, and the Estimation of Compensating Differentials," American Economic Review, American Economic Association, vol. 81(5), pages 1382-1390, December.
    4. Mark D. Partridge & Dan S. Rickman, 1998. "Regional Computable General Equilibrium Modeling: A Survey and Critical Appraisal," International Regional Science Review, , vol. 21(3), pages 205-248, December.
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    Cited by:

    1. Konstantinos Pouliakas & Deborah Roberts & Eudokia Balamou & Dimitris Psaltopoulos, 2014. "Modelling the Effects of Immigration on Regional Economic Performance and Wage Distribution: A Computable General Equilibrium (CGE) Analysis of Three European Union Regions," Regional Studies, Taylor & Francis Journals, vol. 48(2), pages 318-338, February.
    2. Pouliakas, Konstantinos & Roberts, Deborah & Balamou, Eudokia & Psaltopoulos, Dimitris, 2008. "Modelling the Effects of Immigration on Regional Economic Performance and the Wage Distribution: A CGE Analysis of Three EU Regions," MPRA Paper 14157, University Library of Munich, Germany.
    3. Michelle Gilmartin & Kim Swales & Karen Turner, 2008. "A Comparison of Results From MRIO and Interregional Computable General Equilibrium (CGE) Analyses of the Impacts of a Positive Demand Shock on the ‘CO2 Trade Balance’ Between Scotland and the Rest," Working Papers 0808, University of Strathclyde Business School, Department of Economics.
    4. Rob Hodgson & Jacques Poot, 2011. "New Zealand Research on the Economic Impacts of Immigration 2005-2010: Synthesis and Research Agenda," CReAM Discussion Paper Series 1104, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.

    More about this item


    regional CGE modelling; ageing population; migration;

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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