Macroeconomic Impacts of Demographic Change in Scotland: A Computable General Equilibrium Analysis

Katerina Lisenkova, Peter McGregor, Nikos Pappas (), John Swales (), Karen Turner and Robert Wright ()
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Nikos Pappas: University of Strathclyde

No 2623, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper combines a multi-period economic Computable General Equilibrium (CGE) modelling framework with a demographic model to analyse the macroeconomic impact of the projected demographic trends in Scotland. Demographic trends are defined by the existing fertility-mortality rates and the level of annual net-migration. We employ a combination of a demographic and a CGE simulation to track the impact of changes in demographic structure upon macroeconomic variables under different scenarios for annual migration. We find that positive net migration can cancel the expected negative impact upon the labour market of other demographic changes. (Pressure on wages, falling employment). However, the required size of the annual net-migration is far higher than the current trends. The policy implication suggested by the results is that active policies are needed to attract migrants. We nevertheless report results when varying fertility and mortality assumptions. The impact of varying those assumptions is rather small.

Keywords: regional CGE modelling; ageing population; migration (search for similar items in EconPapers)
JEL-codes: J11 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2007-02
New Economics Papers: this item is included in nep-cmp and nep-mac
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Citations: View citations in EconPapers (6)

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