This paper develops a model with increasing adult life expectancy as the driving force of the economic and demographic transition. We show that if parents invest their own time into children's human capital, rising adult life expectancy unambiguously increases fertility. With children educated...

Projected demographic changes in industrialized countries will reduce the share of the workingage population. Analyses based on standard OLG models predict that these changes will increase the capital-labor ratio. Hence, rates of return to capital decrease and wages increase, which has adverse...

Projected demographic changes in industrialized and developing countries vary in extent and timing but will reduce the share of the population in working age everywhere. Conventional wisdom suggests that this will increase capital intensity with falling rates of return to capital and increasing...

This paper develops a dynamic general equilibrium model of fertility, human capital accumulation, child labor and uncertain child survival focusing on the qualitative and quantitative effect of declining mortality on household decisions and economic development. Due to uncertainty about child...

This paper employs a large scale overlapping generations (OLG) model with endogenous human capital formation using a Ben-Porath (1967) technology to evaluate the quantitative role of human capital adjustments for the economic consequences of demographic change. We find that endogenous human...

We develop a simple overlapping generations model to analytically show that population aging leads to increased educational efforts through a general equilibrium effect. The key mechanism at work in the model is that scarcity of raw labor increases the rate of return to human capital relative to...

This paper analyzes the macroeconomic effect of population aging on the aggregate demand for goods and services between 2000 and 2040. As the composition of goods and services consumed varies over the life cycle, the aggregate demand structure is likely to change as well when the population is...

This paper analyzes the implications of demographic change for economic growth in di®erent countries. Quantitative projections are based on a multi-country over- lapping generations model that is augmented with actual demographic data and pro- jections for di®erent OECD regions. According...

We present a quantitative analysis of international capital flows induced by differential population aging and pension reform. It is well known that within each country, demographic change alters the time path of aggregate savings. This process may be amplified if pension reform shifts old-age...

This paper discusses the consequences of population aging and a fundamental pension reform – that is, a shift towards more pre-funding – for capital markets in Germany. We use a stylized closed-economy, overlapping-generations model to compare the effects of the recent German...