A Simulation Analysis of the Longer-Term Effects of Immigration on Per Capita Income in an Aging Population

Frank T. Denton and Byron Spencer

Department of Economics Working Papers from McMaster University

Abstract: Immigration is a possible instrument for offsetting longer-run adverse effects of population aging on per capita income. Our “laboratory” is a fictional country Alpha to which we assign demographic characteristics typical of a country experiencing population aging. Simulations indicate that a very high immigration rate with heavy concentration in younger working ages might be required to keep per capita income from declining. More rapid productivity growth would also offset population aging as would higher rates of labour participation of older people. Longer life expectancy, taken alone, would lower per capita real income, as would higher fertility rates.

Keywords: immigration; per capita income; population aging; age structure; simulation (search for similar items in EconPapers)
JEL-codes: J10 J11 J18 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2015-12
New Economics Papers: this item is included in nep-age, nep-cmp, nep-gro, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:mcm:deptwp:2015-14

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