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on Demographic Economics |
| By: | Michael A. Clemens (Michael A. Clemens) |
| Abstract: | The past several decades have witnessed a rebirth of global labor mobility. Workers have begun to move between countries at rates not seen since before World War One. During the same period, economists’ study of international migration has been framed by a particular textbook model of location choice. This paper reviews the evidence on the economic causes and effects of global migration during the past half century. That evidence falsifies most of the core predictions of the old model. The economics of migration will regain vitality and relevance by discarding and replacing its outworn paradigm. |
| Keywords: | immigration, emigration, globalization, labor, demographic, development, wages, employment, model, causes, effects, mobility, long run |
| JEL: | F22 J61 O15 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2202&r= |
| By: | Atif Mian (Princeton University and NBER); Ludwig Straub (Harvard University and NBER); Amir Sufi (Chicago Booth and NBER) |
| Abstract: | Downward pressure on the natural rate of interest (r∗) is often attributed to an increase in saving. This study uses microeconomic data from the SCF+ to explore the relative importance of demographic shifts versus rising income inequality on the evolution of saving behavior in the United States from 1950 to 2019. The evidence suggests that rising income inequality is the more important factor explaining the decline in r∗. Saving rates are significantly higher for high income households within a given birth cohort relative to middle and low income households in the same birth cohort, and there has been a large rise in income shares for high income households since the 1980s. The result has been a large rise in saving by high income earners since the 1980s, which is the exact same time period during which r∗ has fallen. Differences in saving rates across the working age distribution are smaller, and there has not been a consistent monotonic shift in income toward any given age group. Both findings challenge the view that demographic shifts due to the aging of the baby boom generation explain the decline in r∗. |
| Keywords: | savings, nature rate of interest, United States |
| JEL: | E40 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2021-12&r= |
| By: | Tsendsuren Batsuuri |
| Abstract: | This paper investigates the effect of child dependency on the economy and external imbalances under an asymmetric demographic and productivity transition within a lifecycle model. It embeds dependent children within a two-country model with lifecycle features to examine child dependency’s effect on the economy and external imbalances. Specifically, the paper compares the effects of the same fertility and mortality shocks across models with and without children. Simulations show that child dependency changes both the steady-state and the transition dynamics under a demographic shock. The paper finds that while child dependency changes the direction of the impact of the fertility transition on external imbalances in the short run, it changes the magnitude of the effects in the long run. Furthermore, the model comparison shows that parameters must be chosen differently across models with and without child dependency to start from the same interest rate in the steady-state. Different calibration affects the magnitude of the transition dynamics of different models. These findings illustrate the importance of considering child dependency in studies that seek to explain the historical contribution of demographic changes to external imbalances, and suggest to approach studies that use models without child dependency for this purpose with caution. |
| Keywords: | Global imbalances,Trade imbalances, Demographic transition, Life-cycle model |
| JEL: | D15 E21 E22 E43 E62 F21 F41 J11 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2022-13&r= |
| By: | Siew Ling Yew; Shuyun May Li; Solmaz Mosleh |
| Abstract: | In a life-cycle dynastic family model with endogenous fertility, labor-leisure, and accumulations of human and physical capital, this study examines the growth and welfare effects of parental leave subsidization when there is human capital externality. Compared with the social optimum, such externality causes higher fertility and less parental time and expenditure inputs in child human capital development, and thus lower growth and welfare in the laissez-faire equilibrium. Parental leave subsidization financed by a lump-sum tax (PLS_LS) promotes economic growth and welfare by improving the quantity-quality trade-off of children. There exists an optimal rate of parental leave subsidy but it cannot achieve the social optimum. Parental leave subsidization financed by a labor income tax (PLS_LI) increases the parental time input in child human capital and economic growth. It may improve welfare despite the distortionary effects of labor income taxes in exacerbating the problems of excessive fertility and under-investment of parental expenditure in child human capital. By calibrating the laissez-faire model economy to the U.S. data, our quantitative results show that for an empirically plausible degree of human capital externalities, the optimal parental leave subsidy under PLS_LI implies a fully-covered leave duration of 8.7 weeks per parent, which increases the annual growth rate of output per worker by 0.3 percentage points and welfare by 0.02 percent from the laissez-faire equilibrium. |
| Keywords: | Parental leave, Labor income tax, Fertility, Human capital, Welfare, Growth |
| JEL: | H2 J1 J22 O4 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2022-05&r= |
| By: | Jakob B. Madsen; Peter E. Robertson; Longfeng Ye |
| Abstract: | To what extent did outbreaks of bubonic plague disrupt daily economic activity? We estimate the impact of epidemics on regional markets over four centuries – from the Black Death in the 14th century, until the medieval form of the plague became extinct in the 17th century. Despite the extreme mortality risk of bubonic plague, we find that outbreaks only had a modest impact on trade costs and market integration, as measured by local variations in wheat prices. The results provide quantitative evidence on how the lives versus livelihoods tradeoff was managed through history and the extent to which people learned to live with plague. They suggest that economic activity in low income societies is very resilient to epidemics. |
| Keywords: | Epidemics, Trade Costs, Social Distancing, Black Death, Public Health, COVID-19 |
| JEL: | I15 N33 I18 N13 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2022-09&r= |