A New Perspective on Population Ageing.

In Sanderson and Scherbov (2005) we introduced a new forwardlooking definition of age called “prospective age” and argued that its use, along with the traditional backward-looking concept of age, provides a more informative basis upon which to discuss population ageing. Age is a measure of how many years a person has already lived. Everyone of the same age has lived the same number of years. In contrast, prospective age is concerned about the future. Everyone with the same prospective age has the same expected remaining years of life. In this paper, we first explore the concept of prospective age in detail and show, using an analytic formulation, historical data, and forecasts, that prospective age is, in most cases, insensitive to whether it is measured using period or cohort life tables. We, then, use the two age concepts in concert and demonstrate how this enriches our understanding of population ageing in developed countries since 1960.

Economic Theories of Fertility: What do They Explain?

This working paper is a draft of a chapter in a larger manuscript which is concerned with the time series variations in fertility in the United States since 1920. This chapter asks how economic models of fertility aid our understanding of our demographic history. Thus little attention is given here to the suitability of economic models for the explanation of cross-sectional fertility differentials.

The end of population aging in high-income countries

Will the population of today's high-income countries continue to age throughout the remainder of the century? We answer this question by combining two methodologies, Bayesian hierarchical probabilistic population forecasting and the use of prospective ages, which are chronological ages adjusted for changes in life expectancy. We distinguish two variants of measures of aging: those that depend on fixed chronological ages and those that use prospective ages. Conventional measures do not, for example, distinguish between 65-year-olds in 2000 and 65- year-olds in 2100. In making forecasts of population aging over long periods of time, ignoring changes in the characteristics of people can lead to misleading results. It is preferable to use measures based on prospective ages in which expected changes in life expectancy are taken into account. We present probabilistic forecasts of population aging that use conventional and prospective measures for high-income countries as a group. The probabilistic forecasts based on conventional measures of aging show that the probability that aging will continue throughout the century is essentially one. In contrast, the probabilistic forecasts based on prospective measures of population aging show that population aging will almost certainly come to end well before the end of the century. Using prospective measures of population aging, we show that aging in high-income countries is likely a transitory phenomenon

Young Adults Failure to Thrive Syndrome

Many young working age adults in developed countries are failing to thrive in economic, demographic and social terms. Their failure to thrive is a relatively new phenomenon that has not been widely recognized, but it affects young adults in virtually all the more developed countries for which we have relevant data. Young adults nowadays are more often in poverty. They are leaving their parental homes at ever later ages and in some countries the frequency of psychological problems increased. The seriousness of failure to thrive syndrome is reflected in the relationship between relative economic conditions and increased suicide rates. The syndrome is important because young adults are at the prime ages for finding employment, establishing long-run career paths and building an economic basis for founding a family. Developing strategies to arrest the spread of failure to thrive syndrome among young adults, in order to keep them vibrant contributors to our societies, should be a priority for policy makers

A Dynamic Model of Retirement and Social Security Reform Expectations: A Solution to the New Early Retirement Puzzle.

The need for Social Security Reform in the next years is hardly a matter of debate. Therefore, the widespread believe among Americans that Social Security will not be able to pay benefits in the long run at the level that was anticipated, does not come as a surprise. The government acknowledges the situation, and predicts that substantial benefits cuts will be necessary, yet no legislation has been passed to tackle the problem. Researchers, however, have rarely modeled the uncertainty over Social Security reform and benefit levels, and how they affect claiming behavior and retirement. The purpose of this paper is to assess the extent to which these perceptions of future cuts might explain the puzzle of earlier take-up despite bigger penalties to doing so in the presence of increasing longevity. By introducing a small amount of uncertainty (based on self-reported responses to questions regarding expectations over future cuts) of a relatively small cut (compared with what the government reports as necessary to solve the crisis) in a dynamic life-cycle model of retirement, we are able to match the claiming behavior observed in the data, without relying on heterogeneous preferences. Our results support the hypothesis that expectations over future benefits are affecting current behavior. We find that a mis-specified dynamic retirement model would erroneously predict that an increase in the NRA would delay claiming behavior and increase labor supply at older ages. Once the appropriate earnings test incentives are modeled, and we account for the probability of reforms to the system, an increase in the NRA has little effect on claiming behavior, and it can even increase the proportion of individuals claiming before the NRA.Social Security Administrationhttp://deepblue.lib.umich.edu/bitstream/2027.42/49390/1/wp134.pd

Learning and climate change

Learning – i.e. the acquisition of new information that leads to changes in our assessment of uncertainty – plays a prominent role in the international climate policy debate. For example, the view that we should postpone actions until we know more continues to be influential. The latest work on learning and climate change includes new theoretical models, better informed simulations of how learning affects the optimal timing of emissions reductions, analyses of how new information could affect the prospects for reaching and maintaining political agreements and for adapting to climate change, and explorations of how learning could lead us astray rather than closer to the truth. Despite the diversity of this new work, a clear consensus on a central point is that the prospect of learning does not support the postponement of emissions reductions today.Learning; Uncertainty; Climate change; Decision analysis