Ageing, Retirement and Savings: A General Equilibrium Analysis

Mariano Kulish, Kathryn Smith and Christopher Kent
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Kathryn Smith: Reserve Bank of Australia
Christopher Kent: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: This paper studies the macroeconomic consequences of ageing in an overlapping-generations model with endogenous retirement. We study the behaviour of the economy when population ageing is driven by movements in fertility, changes in longevity, and a combination of both. To gauge the economic implications of these demographic changes we calibrate the model to match key features of the Australian economy. With either a fall in fertility or a rise in longevity, population ageing increases capital intensity in the long run. When fertility and longevity operate together, the increase in capital intensity is more than additive, and the share of life spent in retirement stays roughly constant. The dynamic response of the economy is sensitive to the relative strength of the two factors that drive ageing.

Keywords: baby boom; endogenous retirement; longevity; OLG (overlapping generations) (search for similar items in EconPapers)
JEL-codes: D91 J13 J26 (search for similar items in EconPapers)
Date: 2006-07
New Economics Papers: this item is included in nep-dge and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Related works:
Journal Article: Aging, Retirement, and Savings: A General Equilibrium Analysis (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:rba:rbardp:rdp2006-06

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