Fertility and mortality changes in an overlapping-generations model with realistic demography

Sau-Him Paul Lau

Economic Modelling, 2014, vol. 38, issue C, 512-521

Abstract: Many overlapping-generations models assume only working and retirement stages and are “not capable of representing the most basic feature of the human economic life cycle: that it begins and ends with periods of dependency, separated by a long intermediate period of consuming less than is produced” (Bommier and Lee, 2003). To examine the economic consequences of fertility and mortality changes in a common framework, we incorporate realistic demographic features into a continuous-time overlapping-generations model with childhood, adulthood and retirement stages. Using parameter values appropriate for industrial countries (such as the USA), we find that a fertility increase and a mortality decline, while both causing a rise in the population growth rate, have opposite effects on capital accumulation. We also consider simultaneous fertility and mortality changes, and find that the effect on capital accumulation of a mortality change dominates that of a fertility change.

Keywords: Mortality; Fertility; Overlapping generations; Realistic demography; Capital accumulation (search for similar items in EconPapers)
JEL-codes: E21 J10 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:38:y:2014:i:c:p:512-521

DOI: 10.1016/j.econmod.2014.01.028

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