The labor market effect of demographic change: Alleviation for financing social security

Max Friese

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: The paper shows the effect of demographic change on per capita burden of financing a PAYG social security system in the standard OLG model with a frictional labor market. Rising longevity and decreasing fertility both induce a rise in the employment level via increased capital accumulation and job openings. Simulations of the theoretical model show that this labor market effect indirectly crowds out part of the initial demographic shock's direct impact on per capita financing burden. This holds true for the generation at the period of impact as well as for the following generations.

JEL-codes: E24 H55 J11 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-age, nep-dge and nep-mac
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: The labor market effect of demographic change: Alleviation for financing social security (2015)
Working Paper: The labor market effect of demographic change: Alleviation for financing social security (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145808

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