Demographic projections for Europe
Invited by European Commission JRC and IIASA joint initiative "Center of Expertise on Population and Migration" we discussed the use of the OLG methodology for analyzing the economic (and welfare) consequences of changing demographics. Longevity, declining fertility as well as changing migration patterns to and from Europe all affect our wellbeing and a well designed OLG model can translate the language of demographers to quantified economic intuitions.
A very fruitful workshop was commenced by presentation of our fertility study. Not pretending to be demographers, we use OLG model to produce something similar to confidence intervals for fertility projections. Notably, a given fertility rate can mean different things, depending if the specific number of kids is born in household with one, two or more children. We analyze the extent to which these patterns translate do economic figures and we find that the share of childless households and the extent to which households are able to share the costs of child rearing (such as time away from work, costs of education for the new generation, etc.). We show that these issues are paramount for evaluating the fiscal and the welfare effects of fertility, much more important than the actual level of fertility.