Predictability, Complexity, and Catastrophe in a Collapsible Model of Population, Development, and Environmental Interactions

More and more population forecasts are being produced with associated 95 percent confidence intervals. How confident are we of those confidence intervals? In this paper, we produce a simulated dataset in which we know both past and future population sizes, and the true 95 percent confidence intervals at various future dates. We use the past data to produce population forecasts and estimated 95 percent confidence intervals using various methodologies. We, then, compare the true 95 percent confidence intervals with the estimated ones. This comparison shows that we are not at all confident in the estimated 95 percent confidence intervals. Indeed, even calling them confidence intervals is quite misleading

Simulation Models of Economic, Demographic, and Environmental Interactions: Are They on a Sustainable Development Path?

One of the most important challenges facing mankind today is the formulation of strategies for sustainable development. These are strategies that could reduce poverty in the current generation, without making development more difficult in the future. One response to this challenge has been the creation at IIASA of a simulation model of development, population, and the environment on Mauritius. The main purpose of this paper is to put the IIASA Mauritius model into perspective by (1) comparing it with other simulation models that include environmental considerations, and (2) showing how these models contribute to the debate about economic, environmental, and demographic interactions. In addition to the IIASA Mauritius model, four others are considered in this paper. The first, the Wonderland Model, is used to introduce essential modeling concepts. The second, World3, is the basis of the books "The Limits to Growth" (1972) and "Beyond the Limits" (1992), and undoubtedly the most famous and most criticized model of sustainable development ever published. The World3 model suggests the likelihood of a dreadful environmental collapse within the next eighty years if population growth and economic growth do not soon come to an end. The third, a model of the Sahel model by Anthony Picardi, appeared as an MIT PhD dissertation in 1974 and is still one of the best pieces of work ever done in the area. It deals with, among other things, an actual environmental collapse that occurred in the Sahel in the early 1970s. The last is the POMA model of population and environment in Costa Rica in 1990. It is a simple framework that takes the environment into account, but does not allow any feedbacks from the environment to the economy. Each of the four teaches us lessons that are used to broaden our understanding the IIASA Mauritius model. The debate on demographic, environmental, and economic interactions has, in many instances, been an acrimonious one with people maintaining that economic growth and population growth must soon come to an end or an environmental catastrophe is imminent, that more rapid economic growth is the key to reducing both environmental degradation and population growth, and that reduced population growth is the key to more rapid economic growth and reduced probabilities of environmental collapse. The models reviewed here are used as frameworks within which to address these conflicting viewpoints. Models of environmental, demographic, and economic interactions have had frightfully short lifetimes and, typically, no descendants. One of the most important challenges facing those interested in these interactions today is the development of strategies of sustainable modeling

An Analytically Based Two-Sex Marriage Model and Maximum Likelihood Estimates of its Parameters: Austria, 1979

A parameterized model of family formation, with applicability in both economics and demography is presented here. The model itself is a marriage of economic and demographic analysis. On the economic side, the model is based on a formal characterization of the "marriage market" and makes use of what economists call the "extended linear expenditure system." On the demographic side, the model makes use of the analytic nuptiality function developed by Coale and McNeil. The resulting specification with 13 easily interpretable parameters, is applied to the patterns of nuptiality observed in Austria in 1979. The plausibility of the maximum likelihood parameter estimates as well as the measures of goodness-of-fit indicate that the model can tentatively be accepted as a new tool for the study of the family

Demography, Education, and the Future of Total Factor Productivity Growth

In this paper we present new data on total factor productivity for eight world regions over the period 1970 to 2001. The regions are North America, Western Europe, Japan/Oceania, the China Region, South Asia, Other Pacific Asia, Latin America and the Caribbean, and Sub-Saharan Africa. We propose and estimate a new model of the determinants of total factor productivity based on the framework of conditional convergence. The model allows us to distinguish between factors that influence the level of the conditional productivity frontier and the speed of catching up to that frontier. We show that productivity stagnation in Latin America and the Caribbean and in Sub-Saharan Africa are not because they are trapped far below their potential, but rather that they are fully utilizing the low potential that they have. We found that education and age structure have independent and joint effects on productivity. The rate of capital formation, the quality of institutions, openness, and corruption also affect total factor productivity. The effects of specific variables on total productivity differ by context. They can be different depending on whether a country is catching up to its conditional productivity frontier or not. This provides the possibility of resolving some of the puzzles with respect to the effects of age structure and education that appear in the literature. The paper is based on the new IIASA/VID database on education

Putting Oeppen and Vaupel to Work: On the Road to New Stochastic Mortality Forecasts

Oeppen and Vaupel (2002) revolutionized the field of human mortality forecasting by showing that best-practice life expectancy has risen almost linearly from the mid-nineteenth century to the present. In this paper, we present a methodology that makes use of that finding. We show that among a set of 14 low mortality countries, the distribution of life expectancies in the last 40 years has had almost perfectly linear mean and median values. We use this observation to estimate the parameters of models that include both trend error and idiosyncratic error. We compare the outcomes of the new procedure with the United Nations (2003) forecasts for Germany, Japan, and the U.S., where only mortality rates differ. The projections are most similar for Japan and most different for the U.S

Intergenerational Transfers as a Link between Overlapping Generations and Ramsey Models

This paper develops a continuous-time model in which intergenerational transfers, di.erent from bequest, serve as a link between the overlapping generations (OLG) model and Ramsey-type model. We show that this theoretical framework covers a range of possible dynamics including the model of perpetual youth and Ramsey model as the two boundary cases. We also prove that, except for the Ramsey case, the new model retains qualitative features of an OLG model: competitive equilibrium can be ine1cient, Ricardian debt neutrality may be violated, and asset bubbles can exist. JEL classi/cation: C61; D91; O41 Mathematics Subject Classi/cation (2000): 91B64, 93C1

Future Trends in the Prevalence of Severe Activity Limitations in Developed Countries

Life expectancies at older ages continue to increase in most developed countries. But how these additonal years will be divided between those with and without severe question is important for a variety of issues including the ability of people to continue working in the labor market at ever older ages and forecasting the growth of health care expenditures. We use the harmonized data on severe activity limitations from the Survey of Income and Living Conditons (SILC) and predicted life tables from the United Nations to produce forecasts of demographic quatities that take the prevalence of severe activity limitations into account. For developed countres, we provide forecasts of (1) age-specific proportions of remaining lifetimes at age 65 spent without severe activity limitations, (2) the proportions of populations 60+ years old with severe activity limitations, and (3) a new dependency ratio called the Genuine Adult Dependency Ratio (GADR) that takes severe activity limitations into account. We show that, on average, life expectancies without severe activity limitations at age 65 in high income OECD countries are likely to increase by around 2.7 years between 2005-2010 and 2045-2050. Proportions of 60+ populations with severe activity limitations are likely to be only marginally higher in 2045-2050 than in 2005-2010. We also show that the speed of increase of the Genuine Adult Dependency Ratio is around one-fifth as fast as the conventional old age dependency ratio

Toward a Concept of "Population Balance" Considering Age-Structure, Human Capital, and Intergenerational Equity

This paper is a first step in trying to develop a concept incorporating population growth and population aging concerns under one analytical umbrella. Our approach is to try to achieve this through explicitly considering age structural changes through the analysis of age-specific growth rates and the new measure of Cohort Succession Ratios (CSR), which is introduced in this paper. In order to also address the issue of intergenerational equity on both the population aging and the sustainable development concerns, additional emphasis is put on human capital formation as measured by educational attainment as a proxy for productivity. Since age-, sex- and education-specific analysis can readily be carried out in a multi-state population projection context, this approach presents a feasible and operational strategy to work towards the goal of such a more general framework tentatively entitled "population balance." The paper first discusses the political need for such a more general concept, and then works towards its operational definition through analytical and empirical considerations and the development of a simple simulation model considering age-, cohort- and education-specific productivity and income

A forward looking age based on longevity expectations

Many personal decisions are shaped by people's expectations of the future, but these expectations are rarely included in the study of those decisions. Often, studies that analyze these forward-looking decisions use chronological age, an inherently backward-looking measure, as a proxy for those expectations. In this paper, we use a two part methodology to compute a forward-looking age which is based on data of longevity expectations collected in the Health and Retirement Study (HRS). In the first part, we propose a method to translate those expectations into life tables. In the second part, those life tables are used to produce forward-looking ages that can be used in the study of forward-looking decisions. We find that education has a great effect on subjective life expectancy, therefore on forward-looking age. Also, we observe that at any given education level, the forward-looking age of the younger cohort is always greater than or equal to the forward-looking age of the older cohort. Finally, the difference between forward-looking age chronological age is increasing as individuals get older, but the speed of this change varies depending on education level, cohort and health-related conditions