Volume 31 - Article 11 | Pages 275–318  

A method for socially evaluating the effects of long-run demographic paths on living standards

By Nick Parr, Ross Guest


Background: The paper is motivated by the need for improved social evaluation of prospective demographic change in order to better inform policies that are designed to reduce the very long-run costs of population ageing and to achieve sustainable economic development.

Objective: What is the very long-run social value of a given demographic path? What is the value of changes in mortality, immigration, fertility, and labour force participation? How important are shorter-term demographic changes relative to very long-term effects in determining the social value of the demographic path?

Methods: A new simulation method is applied for socially evaluating demographic paths, by separating a demographic path into a stable population component and a transition path component. Sensitivity analyses are conducted with respect to demographic assumptions, labour force participation assumptions, and consumption needs by age, returns to scale, and intergenerational value judgements.

Results: The application to Australia shows the considerable social cost, in terms of the loss of discounted consumption per capita, of improvements in mortality and gains from higher immigration and increased participation. The effect of fertility, however, is very sensitive to assumptions about the age-specific consumption needs of the population and social value judgements about intergenerational equity.

Conclusions: Our method socially evaluates the very long-run implications of specified constant fertility, mortality, and migration, giving consideration to both the transition path and the ultimate stable state. Mortality improvement is costly and higher immigration is beneficial. The impact of higher fertility is sensitive to assumptions about consumption needs and intergenerational equity.

Author's Affiliation

Other articles by the same author/authors in Demographic Research

The contribution of increases in family benefits to Australia’s early 21st-century fertility increase: An empirical analysis
Volume 25 - Article 6

Satisfaction with life as an antecedent of fertility: Partner + Happiness = Children?
Volume 22 - Article 21

Most recent similar articles in Demographic Research

Age reporting for the oldest old in the Brazilian COVID-19 vaccination database: What can we learn from it?
Volume 48 - Article 28    | Keywords: age misreporting, Brazil, COVID-19, mortality crossover, oldest old, population aging, vaccinations

Internal migration and the de-standardization of the life course: A sequence analysis of reasons for migrating
Volume 46 - Article 12    | Keywords: Australia, Household Income and Labour Dynamics in Australia (HILDA), internal migration, life course, sequence analysis

An age–period–cohort approach to disentangling generational differences in family values and religious beliefs: Understanding the modern Australian family today
Volume 45 - Article 20    | Keywords: age-period-cohort effects, Australia, family, generations, HILDA, religious beliefs, social change, values

The formal demography of kinship III: Kinship dynamics with time-varying demographic rates
Volume 45 - Article 16    | Keywords: family, kinship, matrix population models, population projection, Sweden

Projecting the sexual minority population: Methods, data, and illustrative projections for Australia
Volume 45 - Article 12    | Keywords: Australia, LGBTQ, population projections, sexual minority