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Welfare Effects of Demographic Changes in a Ramsey Growth Model

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  • Stiller, Silvia

Abstract

Population ageing and decline are inescapable facts for Germany which are expected to have - especially due to the labour force decrease - negative impacts on the economy. In this context it is often referred to the possibility of countering potentially negative economic effects of population ageing by a fertility increase or immigration of people at the working age. Of course, changing fertility and immigration are both suited to reduce population ageing. But they influence the population structure, labour supply and thus the economic conditions in substantially different way. This discussion paper focuses on one aspect which is related to this issue. It is examined by simulations how different demographic scenarios affect consumption development and thus average welfare of individual cohorts. The analysis is based on a Ramsey growth model and refers to the demographic structure in Germany. The model results imply that welfare of cohorts with a life expectancy up to 50 years is higher without immigration. Instead, when a consumer faces a life expectancy higher than 50 years or will be born in the future immigration has a positive influence on welfare. Independently of his life expectancy and year of birth a consumer is worse off if fertility rises. In Deutschland sind die Alterung und der drastische Rückgang der Bevölkerung unausweichlich. Im Zuge dieser Entwicklung werden, insbesondere wegen des Arbeitskräfterückgangs, negative Auswirkungen auf die Ökonomie erwartet. In diesem Zusammenhang wird häufig auf die Möglichkeiten verwiesen, den potentiellen negativen ökonomischen Effekten der Alterung durch Zuwanderung von Menschen im Erwerbsalter oder durch einen Fertilitätsanstieg entgegenzuwirken. Zwar sind sowohl höhere Fertilität als auch Zuwanderung geeignet, die demographische Alterung zu reduzieren. Aber Zuwanderung und steigende Fertilität sind aus ökonomischer Sicht nicht gleichwertig, weil sie den Bevölkerungsaufbau und das Arbeitsangebot sehr unterschiedlich beeinflussen. Dieses Diskussionspapier konzentriert sich auf einen hiermit verbundenen Aspekt. Es wird anhand von Simulationsrechnungen untersucht, wie sich unterschiedliche Bevölkerungsszenarios auf die Konsummöglichkeiten und deshalb die Wohlfahrt einzelner Kohorten auswirken. Die Analyse basiert auf einem Ramsey Wachstumsmodell und bezieht sich auf die demographische Situation in Deutschland. Die Ergebnisse zeigen, dass die Wohlfahrt von Kohorten mit einer Lebenserwartung bis 50 Jahre ohne Zuwanderung höher ist als mit Zuwanderung. Für Konsumenten mit einer höheren Lebenserwartung als 50 Jahre und für zukünftig geborene Kohorten, beeinflußt Zuwanderung die individuelle Wohlfahrt positiv. Unabhängig von seiner Lebenserwartung und seinem Geburtsjahr sinkt die Wohlfahrt eines Konsumenten, wenn die Fertilität steigt.

Suggested Citation

  • Stiller, Silvia, 2000. "Welfare Effects of Demographic Changes in a Ramsey Growth Model," Discussion Paper Series 26285, Hamburg Institute of International Economics.
  • Handle: RePEc:ags:hwwadp:26285
    DOI: 10.22004/ag.econ.26285
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    References listed on IDEAS

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