IDEAS home Printed from https://ideas.repec.org/p/ubc/clssrn/clsrn_admin-2009-44.html
   My bibliography  Save this paper

Inter-temporal and Inter-Industry Effects of Population Ageing: A General Equilibrium Assessment for Canada

Author

Listed:
  • Annabi, Nabil
  • Fougère, Maxime
  • Harvey, Simon

Abstract

The objective of this paper is to examine the inter-industry and labour market occupational effects of population ageing in Canada, using a computable general equilibrium overlapping-generations model. The model is calibrated along a balanced-growth path, taking into account labour-augmenting (Harrod-neutral) technical progress. It also accounts for heterogeneity at the household level, using 25 occupation-specific earnings profiles. In addition to the impact of slower labour force growth, the model captures the shift in sectoral composition of final demand. The latter is due to different consumption preferences of older individuals. Moreover, a wage curve is introduced to explore the impact of population ageing on the unemployment rate. The simulation results indicate that the growth in real GDP per capita could decline by nearly one percentage point between 2006 and 2050. Besides, the production of services, in percent of total GDP, is projected to increase in the long-run, although the analysis shows more modest changes in production shares than in previous studies. The results also suggest that the equilibrium unemployment rate is likely to decline by more than 2 percentage points in the long run. The impact also varies quite significantly at the occupational level.

Suggested Citation

  • Annabi, Nabil & Fougère, Maxime & Harvey, Simon, 2009. "Inter-temporal and Inter-Industry Effects of Population Ageing: A General Equilibrium Assessment for Canada," CLSSRN working papers clsrn_admin-2009-44, Vancouver School of Economics, revised 22 Jul 2009.
    • Handle: RePEc:ubc:clssrn:clsrn_admin-2009-44
    as

    Download full text from publisher

    File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%2036%20-%20Annabi-Fougere-Harvey.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. David Card, 1995. "The Wage Curve: A Review," Working Papers 722, Princeton University, Department of Economics, Industrial Relations Section..
    2. David Card, 1995. "The Wage Curve: A Review," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 285-299, June.
    3. Antonio Ciccone & Giovanni Peri, 2005. "Long-Run Substitutability Between More and Less Educated Workers: Evidence from U.S. States, 1950-1990," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 652-663, November.
    4. David G. Blanchflower & Andrew J. Oswald, 1995. "An Introduction to the Wage Curve," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 153-167, Summer.
    5. Turalay Kenc & William Perraudin, 1996. "Pension Systems in Europe: A General Equilibrium Study," Archive Working Papers 018, Birkbeck, Department of Economics, Mathematics & Statistics.
    6. J.H.L. Dewhurst, 2006. "Estimating The Effect Of Projected Household Composition Change On Production In Scotland," Dundee Discussion Papers in Economics 186, Economic Studies, University of Dundee.
    7. repec:fth:prinin:343 is not listed on IDEAS
    8. Frank T Denton & Christine H Feaver & Byron G Spencer, 2005. "Population Aging in Canada: Software for Exploring the Implications for the Labour Force and the Productive Capacity of the Economy," Social and Economic Dimensions of an Aging Population Research Papers 146, McMaster University.
    9. Fougere, Maxime & Mercenier, Jean & Merette, Marcel, 2007. "A sectoral and occupational analysis of population ageing in Canada using a dynamic CGE overlapping generations model," Economic Modelling, Elsevier, vol. 24(4), pages 690-711, July.
    10. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Annabi, Nabil & Harvey, Simon & Lan, Yu, 2011. "Public expenditures on education, human capital and growth in Canada: An OLG model analysis," Journal of Policy Modeling, Elsevier, vol. 33(6), pages 852-865.
    2. Johannes Berger & Thomas Davoine & Philip Schuster & Ludwig Strohner, 2016. "Cross-country differences in the contribution of future migration to old-age financing," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(6), pages 1160-1184, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. López Enciso, Enrique & Ramírez Giraldo, María Teresa (ed.), 2011. "Formación de precios y salarios en Colombia T.2," Books, Banco de la Republica de Colombia, volume 2, number 2011b-04, July.
    2. Marisa Carla Bucheli Anaya & Cecilia González Rodríguez-Villamil, 2012. "An estimation of the wage curve for Uruguay," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, June.
    3. Inmaculada Garcia-Mainar & Victor Montuenga-Gomez, 2003. "The Spanish Wage Curve: 1994-1996," Regional Studies, Taylor & Francis Journals, vol. 37(9), pages 929-945.
    4. Jens Suedekum, 2005. "Increasing returns and spatial unemployment disparities," Papers in Regional Science, Wiley Blackwell, vol. 84(2), pages 159-181, June.
    5. Demidova, O. & Timofeeva, E., 2021. "Spatial aspects of wage curve estimation in Russia," Journal of the New Economic Association, New Economic Association, vol. 51(3), pages 69-101.
    6. Peter Nijkamp & Jacques Poot, 2005. "The Last Word on the Wage Curve?," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 421-450, July.
    7. Baltagi, Badi H. & Blien, Uwe, 1998. "The German wage curve: evidence from the IAB employment sample," Economics Letters, Elsevier, vol. 61(2), pages 135-142, November.
    8. Baltagi, Badi H. & Rokicki, Bartlomiej, 2014. "The spatial Polish wage curve with gender effects: Evidence from the Polish Labor Survey," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 36-47.
    9. Pant, Hom & Warr, Peter, 2016. "Modelling Involuntary Unemployment in Applied GE Models," Conference papers 332799, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Reinhold Kosfeld & Christian Dreger, 2018. "Local and spatial cointegration in the wage curve – a spatial panel analysis for german regions," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 38(1), pages 53-75, February.
    11. Baltagi, Badi H. & Baskaya, Yusuf Soner & Hulagu, Timur, 2012. "The Turkish wage curve: Evidence from the Household Labor Force Survey," Economics Letters, Elsevier, vol. 114(1), pages 128-131.
    12. Bill Collier, 2000. "The UK Wage Curve: New Evidence from the British Household Panel Survey," Studies in Economics 0010, School of Economics, University of Kent.
    13. Víctor M. Montuenga‐Gómez & José M. Ramos‐Parreño, 2005. "Reconciling the Wage Curve and the Phillips Curve," Journal of Economic Surveys, Wiley Blackwell, vol. 19(5), pages 735-765, December.
    14. Baltagi, Badi H. & Baskaya, Yusuf Soner & Hulagu, Timur, 2012. "The Turkish wage curve: Evidence from the Household Labor Force Survey," Economics Letters, Elsevier, vol. 114(1), pages 128-131.
    15. N. N., 2009. "Labour Mobility within the EU in the Context of Enlargement and the Functioning of the Transitional Arrangements," WIFO Studies, WIFO, number 35641, Juni.
    16. Kosfeld, Reinhold & Dreger, Christian, 2019. "Towards an East German wage curve - NUTS boundaries, labour market regions and unemployment spillovers," Regional Science and Urban Economics, Elsevier, vol. 76(C), pages 115-124.
    17. Georges, Patrick & Mérette, Marcel & Zhang, Qi, 2011. "Assessing the Cost of Post-9/11 Security Measures and the Impact of a North American Security Perimeter - A Computable General Equilibrium Analysis," Conference papers 332126, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. Effrosyni Adamopoulou & Ernesto Villanueva, 2020. "Wage determination and the bite of collective contracts in Italy and Spain: evidence from the metal working industry," Working Papers 2036, Banco de España.
    19. Patrick A. Puhani, 2000. "On the Identification of Relative Wage Rigidity Dynamics," William Davidson Institute Working Papers Series 343, William Davidson Institute at the University of Michigan.
    20. Koenig, Felix & Manning, Alan & Petrongolo, Barbara, 2014. "Reservation wages and the wage flexibility puzzle," LSE Research Online Documents on Economics 60613, London School of Economics and Political Science, LSE Library.

    More about this item

    Keywords

    Population ageing; growth; general equilibrium model; overlapping generations; Canada;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ubc:clssrn:clsrn_admin-2009-44. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Vivian Tran (email available below). General contact details of provider: http://www.clsrn.econ.ubc.ca/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.