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

Print this page  Facebook  Twitter


Date received:02 Sep 2013
Date published:29 Jul 2014
Word count:8015
Keywords:Australia, labor force, methodology, population aging, population economics, population policy, population projection, social evaluation


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

Nick Parr - Macquarie University, Australia [Email]
Ross Guest - Griffith University, Australia [Email]

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

» Lifetime probabilities of multigenerational caregiving and labor force attachment in Australia
Volume 35 - Article 52    | Keywords: Australia, labor force

» Economic support ratios and the demographic dividend in Europe
Volume 30 - Article 34    | Keywords: population aging, population projection

» Model migration schedules incorporating student migration peaks
Volume 23 - Article 8    | Keywords: Australia, population projection

» Decomposing the change in labour force indicators over time
Volume 13 - Article 7    | Keywords: labor force, population aging

» Internal migration and the de-standardization of the life course: A sequence analysis of reasons for migrating
Volume 46 - Article 12    | Keywords: Australia


»Volume 31





Similar Articles



Jump to Article

Volume Page
Volume Article ID