Economic ageing and demographic change
Journal: Vienna Yearbook of Population Research
Volume: 2007, pages 133-165
Publisher: Verlag der Österreichischen Akademie der Wissenschaften
DOI: 10.1553/populationyearbook2007s133
Dominik Grafenhofer (1), Christian Jaag (2), Christian Keuschnigg (3) and Mirela Keuschnigg (4)
(1) University of Toulouse, dominik@grafenhofer.at
(2) University of St.Gallen and Swiss Post, christian.jaag@post.ch
(3) author for correspondence, University of St.Gallen, IFF-HSG,
Varnbuelstrasse 19, CH-9000 St.Gallen, Email: christian.keuschnigg@unisg.ch
(4) University of St.Gallen, mirela.keuschnigg@unisg.ch
Abstract
This paper presents a generalised model of overlapping generations with economic ageing of households. Economic age is defined as a set of personal attributes such as earnings potential and tastes that are characteristic of a person’s position in the life-cycle. We separate the concepts of economic age and time since birth by assuming only a small number of different states of age. Agents sharing the same economic characteristics are aggregated analytically to a small number of age groups. The model thus allows for a very parsimonious approximation of life-cycle differences in earnings, wealth and consumption. As an illustration, we apply the model quantitatively to study the impact of demographic change.