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A Simulation Analysis of the Longer-Term Effects of Immigration on Per Capita Income in an Aging Population

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  • Frank T. Denton
  • Byron G. Spencer

Abstract

Immigration is a possible instrument for offsetting longer-run adverse effects of population aging on per capita income. Our “laboratory” is a fictional country Alpha to which we assign demographic characteristics typical of a country experiencing population aging. Simulations indicate that a very high immigration rate with heavy concentration in younger working ages might be required to keep per capita income from declining. More rapid productivity growth would also offset population aging as would higher rates of labour participation of older people. Longer life expectancy, taken alone, would lower per capita real income, as would higher fertility rates.

Suggested Citation

  • Frank T. Denton & Byron G. Spencer, 2015. "A Simulation Analysis of the Longer-Term Effects of Immigration on Per Capita Income in an Aging Population," Department of Economics Working Papers 2015-14, McMaster University.
    • Handle: RePEc:mcm:deptwp:2015-14
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    File URL: http://socserv.mcmaster.ca/econ/rsrch/papers/archive/2015-14.pdf
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    References listed on IDEAS

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    Cited by:

    1. Frank Trevor Denton & Byron Grant Spencer, 2017. "Immigration and the rate of population mixing: explorations with a stylized model," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-15, December.

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    More about this item

    Keywords

    immigration; per capita income; population aging; age structure; simulation;
    All these keywords.

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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