nep-dem New Economics Papers
on Demographic Economics
Issue of 2018‒12‒24
five papers chosen by
Héctor Pifarré i Arolas
Universitat Pompeu Fabra

  1. Economic Uncertainty and Fertility Cycles: The Case of the Post-WWII Baby Boom By Chabé-Ferret, Bastien; Gobbi, Paula
  2. Two Hundred Years of Health and Medical Care: The Importance of Medical Care for Life Expectancy Gains By Maryaline Catillon; David Cutler; Thomas Getzen
  3. Health and Economic Growth By Bloom, David E.; Kuhn, Michael
  4. Early Labor Market Prospects and Family Formation By Mattias Engdahl; Mathilde Godard; Oskar N. Skans
  5. Macroeconomic Effects of Japan’s Demographics: Can Structural Reforms Reverse Them? By Mariana Colacelli; Emilio Fernández Corugedo

  1. By: Chabé-Ferret, Bastien; Gobbi, Paula
    Abstract: Using the US Census waves 1940-1990 and Current Population Surveys 1990-2010, we look at how economic uncertainty affected fertility cycles over the course of the XXth century. We use cross-state and cross-cohort variation in the volatility of income growth to identify the causal link running from uncertainty to completed fertility. We find that economic uncertainty has a large and robust negative effect on fertility. This finding contributes to the unraveling of the determinants of the post-WWII baby boom. Specifically, the difference in economic uncertainty endured by women born in 1910 compared to that faced by women born in 1935 accounts for between 45% and 61% of the one child variation across these cohorts. We hypothesize that a greater economic uncertainty increases the risk of large consumption swings, which individuals mitigate by marrying later, postponing fertility, and ultimately decreasing their completed fertility.
    Keywords: baby boom; baby bust; economic uncertainty; Fertility
    JEL: E32 J11 J13 N30
    Date: 2018–12
  2. By: Maryaline Catillon; David Cutler; Thomas Getzen
    Abstract: Using two hundred years of national and Massachusetts data on medical care and health, we examine how central medical care is to life expectancy gains. While common theories about medical care cost growth stress growing demand, our analysis highlights the importance of supply side factors, including the major public investments in research, workforce training and hospital construction that fueled a surge in spending over the 1955-1975 span. There is a stronger case that personal medicine affected health in the second half of the twentieth century than in the preceding 150 years. Finally, we consider whether medical care productivity decreases over time, and find that spending increased faster than life expectancy, although the ratio stabilized in the past two decades.
    JEL: H51 I15 I18 J1 N3 O1
    Date: 2018–12
  3. By: Bloom, David E. (Harvard University); Kuhn, Michael (Vienna Institute of Demography)
    Abstract: The positive cross-country correlation between health and economic growth is well-established, but the underlying mechanisms are complex and difficult to discern. Three issues are of central concern. First, assessing and disentangling causality between health and economic growth is empirically challenging. Second, the relation between health and economic growth changes over the process of economic development. Third, different dimensions of health (mortality vs. morbidity, children's and women's health, and health at older ages) may have different economic effects.
    Keywords: longevity, health, productivity, poverty traps, economic development, economic well-being, living standards, neoclassical and R&D-based growth
    JEL: I10 J13 J24
    Date: 2018–11
  4. By: Mattias Engdahl (Institute for evaluation of labor market and education policy (IFAU) and Uppsala Center for Labor Studies (UCLS), Box 513, S-751 20 Uppsala, Sweden); Mathilde Godard (University of Lyon, CNRS, GATE UMR 5824, F-69130 Ecully, France.); Oskar N. Skans (Uppsala University, UCLS, IZA and IFAU. Correspondance to: Department of Economics, Uppsala University Box 513 SE-751 20 Uppsala, Sweden)
    Abstract: We use quasi-random variation in graduation years during the onset of a very deep national recession to study the relationship between early labor market conditions and young females’ family formation outcomes. A policy-pilot affecting the length of upper-secondary vocational tracks allows us to compare females who graduated into the onset of the Swedish financial crisis of the 1990s to those graduating during the final phase of the preceding economic boom while netting out the main effect of the policy. We find pronounced, but short-lived, negative labor market effects from early exposure to the recession for low-grade students in particular. In contrast, we document very long-lasting effects on family formation outcomes, again concentrated among low-grade students. Young women who graduated into the recession because of the policy-pilot formed their first stable partnerships earlier and had their first children earlier. Their partners had lower grades, which we show to be a strong predictor of divorce, and worse labor market performance. Divorces were more prevalent and the ensuing increase in single motherhood was long-lasting. These negative effects on marital stability generated persistent increases in the use of welfare benefits despite the short-lived impact on labor market outcomes. The results suggest that young women respond to early labor market prospects by changing the quality threshold for entering into family formation, a process which affects the frequency of welfare-dependent single mothers during more than a decade thereafter.
    Keywords: Family formation, female labor supply, cost of recessions
    JEL: E32 J12 J13 J22 J31
    Date: 2018
  5. By: Mariana Colacelli; Emilio Fernández Corugedo
    Abstract: Yes, partly. This paper studies the potential role of structural reforms in improving Japan’s outlook using the IMF’s Global Integrated Monetary and Fiscal Model (GIMF) with newly-added demographic features. Implementation of a not-fully-believed path of structural reforms can significantly offset the adverse effect of Japan’s demographic headwinds — a declining and ageing population — on real GDP (by about 15 percent in the next 40 years), but would not boost inflation or contribute substantially to stabilizing public debt. Alternatively, implementation of a fully-credible structural reform program can contribute significantly to stabilizing public debt because of the resulting increase in inflation towards the Bank of Japan’s target, while achieving the same positive long-run effects on real GDP. If no reforms are implemented, severe demographic headwinds are expected to reduce Japan’s real GDP by over 25 percent in the next 40 years.
    Keywords: Asia and Pacific;Japan;Government expenditures and health;Structural reforms, demographics, OLG models, Forecasting and Simulation, General, General, Contracts: Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets
    Date: 2018–11–28

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