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Is the Demographic Dividend an Education Dividend?

December 5, 2013 Comments off

Is the Demographic Dividend an Education Dividend?
Source: Demography

The effect of changes in age structure on economic growth has been widely studied in the demography and population economics literature. The beneficial effect of changes in age structure after a decrease in fertility has become known as the “demographic dividend.” In this article, we reassess the empirical evidence on the associations among economic growth, changes in age structure, labor force participation, and educational attainment. Using a global panel of countries, we find that after the effect of human capital dynamics is controlled for, no evidence exists that changes in age structure affect labor productivity. Our results imply that improvements in educational attainment are the key to explaining productivity and income growth and that a substantial portion of the demographic dividend is an education dividend.

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The Leverage of Demographic Dynamics on Carbon Dioxide Emissions: Does Age Structure Matter?

February 13, 2013 Comments off

The Leverage of Demographic Dynamics on Carbon Dioxide Emissions: Does Age Structure Matter?

Source: Demography

This article provides a methodological contribution to the study of the effect of changes in population age structure on carbon dioxide (CO2) emissions. First, I propose a generalization of the IPAT equation to a multisector economy with an age-structured population and discuss the insights that can be obtained in the context of stable population theory. Second, I suggest a statistical model of household consumption as a function of household size and age structure to quantitatively evaluate the extent of economies of scale in consumption of energy-intensive goods, and to estimate age-specific profiles of consumption of energy-intensive goods and of CO2 emissions. Third, I offer an illustration of the methodologies using data for the United States. The analysis shows that per-capita CO2 emissions increase with age until the individual is in his or her 60s, and then emissions tend to decrease. Holding everything else constant, the expected change in U.S. population age distribution during the next four decades is likely to have a small, but noticeable, positive impact on CO2 emissions.

The Value of an Employment Based Green Card

February 24, 2012 Comments off
Source:  Demography (pre-pub version)
The need for and role of high skilled immigrants workers in the U.S. economy is fiercely debated. However proponents and opponents agree temporary workers are paid a lower wage compared to natives. This lower wage comes from restricted mobility of workers while on a temporary visa. In this paper we estimate the wage gain from acquiring permanent U.S. residency. We use data from New Immigrant Survey (2003) and implement a difference in difference propensity score matching estimator. We find that for employer sponsored immigrants’ the acquisition of a green card leads to an annual wage gain of about $11,860.

See: Nevada economics researcher calculates increase in income from green card (The Record-Courier)


Statistical Security for Social Security

May 18, 2011 Comments off

Statistical Security for Social Security
Source: Demography (forthcoming)

The financial viability of Social Security, the single largest U.S. Government program, depends on accurate forecasts of the solvency of its intergenerational trust fund. We begin by detailing, for the first time, the information necessary to replicate the Social Security Administration’s (SSA’s) forecasting procedures. We then show how to reduce one of the largest component of uncertainty in these procedures, due to age- and sex-specific mortality forecasts. SSA mortality forecasts are currently based on a complicated combination of linear extrapolation and qualitative judgments. Unfortunately, linear extrapolation excludes known risk factors and violates long-standing demographic patterns, such as the smoothness of age profiles; and modern statistical methods typically outperform even the best qualitative judgments in these contexts. We show how to use such modern methods here, enabling researchers to forecast using far more information, such as the known risk factors of smoking and obesity and known demographic patterns. Including this extra information makes a substantial difference: For example, by only improving mortality forecasting methods, we predict three fewer years of net surplus, $730 billion less in Social Security trust funds by 2030, and program costs that are 0.66% greater of projected taxable payroll compared to the best SSA projections. More important than specific numerical estimates are the advantages of transparency, replicability, reduction of uncertainty, and what may be the resulting lower vulnerability to the politicization of program forecasts. In addition, by offering with this paper easy-to-use software and detailed replication information, we hope to marshal the efforts of the research community to include ever more informative inputs and to continue to reduce the uncertainties in Social Security forecasts.

+ Full Paper (PDF)

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