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The Distributional Impact of Population Ageing

Author

Listed:
  • Omar A Aziz
  • Christopher Ball
  • John Creedy
  • Jesse Eedrah

    () (The Treasury)

Abstract

This paper examines the potential distributional impacts of demographic change, particularly population ageing, and changes to labour force participation that are projected to arise over the next 50 years. The approach involves calibration weighting of the Treasury’s microsimulation model, Taxwell, based on the New Zealand Household Economic Survey. The weights are adjusted for each projection year to ensure that a range of population aggregates (by age and gender) match the projected values provided by Statistics New Zealand. Measures of income inequality and poverty, along with the incidence of income tax, Goods and Services Tax and a number of components of government spending (namely health and education) across age groups, are obtained. The results suggest that population ageing and expected changes in labour force participation, in isolation, do not have a significant impact on population-level measures of income inequality.

Suggested Citation

  • Omar A Aziz & Christopher Ball & John Creedy & Jesse Eedrah, 2013. "The Distributional Impact of Population Ageing," Treasury Working Paper Series 13/13, New Zealand Treasury.
  • Handle: RePEc:nzt:nztwps:13/13
    as

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    File URL: http://www.treasury.govt.nz/publications/research-policy/wp/2013/13-13/twp13-13.pdf
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    References listed on IDEAS

    as
    1. John Creedy & Jamas Enright & Norman Gemmell & Angela Mellish, 2010. "Population ageing and taxation in New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 44(2), pages 137-158.
    2. Shelley A. Phipps & Peter S. Burton, 1995. "Sharing within Families: Implications for the Measurement of Poverty among Individuals in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 28(1), pages 177-204, February.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Penny Mok & Joseph Mercante, 2014. "Working for Families changes: The effect on labour supply in New Zealand," Treasury Working Paper Series 14/18, New Zealand Treasury.

    More about this item

    Keywords

    Inequality; population ageing; survey calibration; poverty; fiscal incidence;

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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