An econometric and neoclassical analysis of the timing and spacing of births in Canada from 1950 to 1990

This paper estimates a reduced form neoclassical model of Canadian fertility dynamics using an econometric technique that integrates several features not usually found in the demographic and economic literature. We find considerable support for the neoclassical model. We also find that correlated unobservables and parity stopping effects play an important role in Canadian fertility dynamics as well as other socio-demographic features of Canadian women. However, we fail to totally characterize the important drops in the fertility rate that took place for this era. Received: 2 May 1996 / Accepted: 27 March 1997     

Neoclassical growth with endogenous age distribution. Poverty vs low-fertility traps as steady states of demographic transitions

Compared to other factors, the role of the age distribution of the population as a key endogenous determinant of economic growth trajectories has traditionally been overlooked. This is unrealistic, especially when dealing with major epochs of structural change, such as demographic transitions. We set up a model combining a simple representation of the economy, based on the neoclassical growth model of Solow, with a comprehensive representation of population dynamics. The model is used to investigate the structure of balanced growth states of the population and the economy in the presence of demographic transitions. The analysis shows that proper inclusion of age structure enriches the spectrum of the long-run equilibria of the neoclassical model, allowing up to five states of balanced growth, and shows the onset of “poverty” and “low-fertility” traps as different facets of fertility transitions. The role of different timing of fertility, mortality and savings transitions, and of more realistic demography of capital, is also considered.     

Population age structure and consumption growth: evidence from National Transfer Accounts

We assess the effects of the population age structure and the population dynamics on economic growth. Following recent research, we focus on the generational turnover effect to characterize the influence of birth and death rates, depending on the age profile of individual consumption, the extent of annuity market imperfections, and the willingness of households to shift consumption over time. Using data from the National Transfer Accounts on age profiles of consumption for a number of different countries, we assess—in a comparative way—the sign and the magnitude of the generational turnover effect and its impact on economic growth. We find considerable cross-country differences and trace them back to the underlying variation in demography and in the age structure of consumption.     

Age structure effects and growth in the OECD, 1950–1990

Economic growth depends on human resources and human needs. The demographic age structure shapes both of these factors. We study five-year data from the OECD countries 1950–1990 in the framework of an age structure augmented neoclassical growth model with gradual technical adjustment. The model performs well in both pooled and panel estimations. The growth patterns of GDP per worker (labor productivity) in the OECD countries are to a large extent explained by age structure changes. The 50–64 age group has a positive influence, and the group above 65 contributes negatively, while younger age groups have ambiguous effects. However, the mechanism behind these age effects is not yet resolved. Received: 16 January 1997/Accepted: 2 July 1998     

The optimum growth rate for population under critical-level utilitarianism

We characterize optimal consumption, capital, and population growth of a production economy under critical-level utilitarianism. First, we show that neither classical utilitarianism nor average utilitarianism can avoid a corner solution for the population growth rate, in that under the former, population grows at the maximum speed (the so-called repugnant conclusion) while under the latter, it grows at the minimum. Second, we show that critical level utilitarianism yields an interior solution for the population growth rate provided the critical level belongs to a positive, open interval. Finally, we characterize the transition to the steady state and perform comparative dynamics analysis.     

新古典增长理论框架下的老龄化效应分析

众所周知,日益严重的老龄化进程将对一国经济和社会各个方面的产生深远影响。近年来,以OECD和亚洲国家为对象的定量研究大量涌现。着重于分析人口老龄化对中国宏观经济变量的影响,本文考察了现收现付制和取消现收现付制两种不同条件下的政策模拟。运用Ayse Imrohoroglu等人的新古典增长模型,我们的政策模拟基于两种不同的人口冲击:生育率降低、预期寿命延长。我们发现在上述政策模拟中,个体变量和汇总变量的变化各不相同。     

Endogenous fertility,endogenous lifetime and economic growth: the role of child policies

We examine the effects of child policies on both transitional dynamics and long-term demo-economic outcomes in an overlapping-generations neoclassical growth model à la Chakraborty (J Econ Theory 116(1):119–137, 2004) extended with endogenous fertility under the assumption of weak altruism towards children. The government invests in public health, and an individual’s survival probability at the end of youth depends on health expenditure. We show that multiple development regimes can exist. However, poverty or prosperity does not necessarily depend on the initial conditions, since they are the result of how a child policy is designed. A child tax, for example, can be used effectively to enable those economies that were entrapped in poverty to prosper. There is also a long-term welfare-maximising level of the child tax. We show that a child tax can be used to increase capital accumulation, escape from poverty and maximise long-term welfare also when (a) a public pay-as-you-go pension system is in place and (b) the government issues an amount of public debt. Interestingly, there also exists a couple child tax–health tax that can be used to find the second-best optimum optimorum. In addition, we show that results are robust to the inclusion of decisions regarding the child quantity–quality trade-off under the assumption of impure altruism. In particular, there exists a threshold value of the child tax below (resp. above) which child quality spending is unaffordable (resp. affordable) and different scenarios are in existence.     

Endogenous fertility,mortality and growth

Economic and demographic outcomes are determined jointly in a choice-theoretic model of fertility, mortality and capital accumulation. There is an endogenous population of reproductive agents who belong to dynastic families of overlapping generations connected through altruism. In addition to choosing savings and births, parents may reduce (infant) deaths by incurring expenditures on health-care which is also provided by the government. A generalised production technology accounts for long-run endogenous growth with short-run transitional dynamics. The analysis yields testable time series and cross-section implications which accord with the empirical evidence on the relationship between demography and development. Received: 22 April 1996 / Accepted: 2 April 1998     

Child mortality and fertility: public vs private education

How does the effect of child mortality reductions on fertility and education vary across educational systems? To answer this question, we develop an overlapping-generations model where altruistic parents care about both the number and human capital of their surviving children. We find that, under a private education system, if income is low initially, the economy converges to a Malthusian stagnation steady state. For a high level of initial income, the economy reaches a growth path in which children’s education rises and fertility decreases with income. In the growth regime under private education, exogenous shocks that lower child mortality are detrimental for growth: fertility increases and education declines. In contrast, under a public education system, the stagnation steady state does not exist, and health improvement shocks are no longer detrimental for growth. We therefore offer a new rationale for the introduction of public education.     

Three strikes and you're out: Demographic analysis of mandatory prison sentencing

Much of the debate about the costs and benefits of “three-strikes” laws for repeat felony offenders is implicitly demographic, relying on unexamined assumptions about prison population dynamics. However, even state-of-the-art analysis has omitted important demographic details. We construct a multistate life-table model of population flows to and from prisons, incorporating age-specific transition rates estimated from administrative data from Florida. We use the multistate life-table model to investigate patterns of prison population growth and aging under many variants of three-strikes laws. Our analysis allows us to quantify these demographic changes and suggests that the aging of prison populations under three-strikes policies will Significantly undermine their long-run effectiveness.     

Learning-by-doing,population pressure,and the theory of demographic transition

The present paper discusses the long-run effects of two interdependent relations between economic and population growth. According to a frequently used formulation of the population-push hypothesis, learning-by-doing effects in production lead to increasing returns to scale and, therefore, to a positive correlation between economic and population growth. In accordance to the theory of demographic transition the population growth rate initially increases with rising income levels and then declines. Regarding this relationship, the existence and stability of a low-income equilibrium and a high-income equilibrium will be shown in a neoclassical growth model. Under plausible conditions a demo-economic transition from the first to the second steady-state takes place. The result yields a meaningful interpretation of the population-push hypothesis, which is consistent with the empirical findings on the correlation between economic and population growth. Received March 8, 1996 / Accepted October 24, 1996     

Population and land use change in the California Mojave: Natural habitat implications of alternative futures

Demographic and land use dynamics have important implications for the natural environment within both developed and developing nations. Within the context of developed nations, popular and policy debates surrounding contemporary patterns of suburbanization attest to the salience of demographic and development issues. We examine the implications of land-use patterns as related to population and development within the context of the California Mojave Desert ecosystem. In a general sense, we aim to better understand the land requirements inferred by varying levels of population growth and density, as well as the natural habitat implications of those requirements. We develop a GIS including remotely sensed imagery, and demographic, economic, and biophysical data to examine of the implications of various demographic scenarios on species diversity. Spatial and statistical models are designed to develop possible alternative land use `futures'. Within the context of the California Mojave region, our results suggest that high-density development could reduce conflict with regions providing potential habitat for threatened or endangered species by over 80 percent. The process of model development demonstrates a potentially useful tool for policymakers, allowing for estimation and visualization of the land use implications of policy decisions.     

Population dynamics and monetary policy

This paper shows that in a general equilibrium model with interest-rate feedback rules of the Taylor-type population dynamics give rise to multiple steady states. Under an active monetary policy, real determinacy occurs only around the steady state with zero net financial wealth, where aggregate consumption is equally distributed among agents of different generations. By contrast, in a neighborhood of the steady state displaying a positive stock of financial wealth and intergenerational inequality, real determinacy requires monetary policy to be passive. Changes in the demographic profile of the economy are shown to have relevant implications for the aggregate accumulation of wealth.

On demographic transition,structural change,and economic growth and stagnation

The paper analyzes an economy with an agrarian and an industrial sector. Demand is determined by Engel's Law. Population growth follows a non‐linear income dependent path according to the theory of demographic transition. In case of decreasing returns to scale in the agrarian sector the existence of a stable low‐income equilibrium with high population growth can be shown. If this equilibrium is globally unstable, the system evolves towards a steady‐state of perpetual economic growth and low population growth. The path of demographic transition coincides with a path of structural change from an economy specialized in agriculture to a fully industrialized economy. The introduction of an income dependent savings rate allows the interpretation of the low‐income equilibrium as a limit cycle and, therefore, the explanation of high fluctuations in population growth and per capita income in least developed economies.     

An age‐structured model of population dynamics with dominant ages,delayed behavior,and oscillations

An age‐structured model of population dynamics with age‐dominance is proposed and analyzed. Existence and uniqueness of solutions are established as well as the uniqueness and local asymptotic stability of steady‐states. Conditions for convergence to or oscillation about the steady‐state are specified in some cases.     

Multistate modelling extended by behavioural rules: An application to migration

We propose to extend demographic multistate models by adding a behavioural element: behavioural rules explain intentions and thus transitions. Our framework is inspired by the Theory of Planned Behaviour. We exemplify our approach with a model of migration from Senegal to France. Model parameters are determined using empirical data where available. Parameters for which no empirical correspondence exists are determined by calibration. Age- and period-specific migration rates are used for model validation. Our approach adds to the toolkit of demographic projection by allowing for shocks and social influence, which alter behaviour in non-linear ways, while sticking to the general framework of multistate modelling. Our simulations yield that higher income growth in Senegal leads to higher emigration rates in the medium term, while a decrease in fertility yields lower emigration rates.     

Demographic dynamics and long-run development: insights for the secular stagnation debate

This paper takes a global, long-run perspective on the recent debate about secular stagnation, which has so far mainly focused on the short term. The analysis is motivated by observing the interplay between the economic and demographic transition that has occurred in the developed world over the past 150 years. To the extent that high growth rates in the past have partly been the consequence of singular changes during the economic and demographic transition, growth is likely to become more moderate once the transition is completed. At the same time, a similar transition is on its way in most developing countries, with profound consequences for the development prospects in these countries, but also for global comparative development. The evidence presented here suggests that long-run demographic dynamics have potentially important implications for the prospects of human and physical capital accumulation, the evolution of productivity, and the question of secular stagnation.     

A politico-economic model of aging,technology adoption and growth

This paper provides a politico-economic theory that explains how an economy evolves when the longevity of its citizens is jointly determined with the process of economic development. We propose a three-period overlapping generation model where agents’ decisions embrace two dimensions: a private choice about education and a public one on innovation policy. We find that (a) poverty traps can emerge in human capital accumulation, (b) higher life expectancy increases the incentive to innovate for both young and adults, (c) different political configurations can arise depending on endogenous demographic structures and (d) the steady state can entertain both innovation and its absence.     

Capital accumulation,endogenous population growth,and Easterlin cycles

In this paper we attempt to explain the occurrence of population cycles in industrialised economies where the birth rate depends on the difference between the actual and the expected consumption rate. This model of an endogenously growing population brings together Easterlin's idea of an adapting aspiration level with the neoclassical optimal growth paradigm. It is shown that in this highly aggregated demo-economic system (i.e., without inclusion of the age structure of a population) swings both in the economic and demographic variables may exist. The reason behind this strange optimal behaviour is identified to be an intertemporal substitution effect between current and future levels of consumption.We wish to thank A. Novak for helpful assistance and an anonymous referee for useful comments. Financial support by the Austrian Science Foundation under contract No. P6601 is acknowledged.     

Assessing the efficiency of public education and pensions

Theory says that, in an overlapping-generations context, intergenerational transfer agreements are efficient if they induce equality between certain implicit rates of return. We apply this theory to the case of public education and pensions, where public education is interpreted as a loan from middle age to young, and pensions are the repayment of this loan, plus interest, from middle age to old. We use micro- and macrodata from Spain to estimate how far actual arrangements are from the normative goal. When demographic stationarity is assumed, efficiency appears reachable. When demographic change is accounted for, efficiency is far from being achieved. Nevertheless, and contrary to earlier predictions in the generational accounting literature, our findings suggest that future generations may not necessarily be worse off than current ones.