Background and Summary of the Symposium on "Population Ageing and Economic Productivity", December 2-4, 2004, Vienna Institute of Demography

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A Pooled Time-Series Analysis on the Relation Between Fertility and Female Employment.

Various authors find that in OECD countries the cross-country correlation between the total fertility rate and the female labour force participation rate turned from a negative value before the 1980s to a positive value thereafter. Based on pooled time series analysis the literature seems to agree that this change is due to unmeasured country and time heterogeneity with respect to female employment. However, the role of female employment for time and country heterogeneity remains unclear. Using data of 22 OECD countries from 1960-2000 we estimate pooled time series models of fertility and female labour force participation by applying random effects and fixed effects panel models as well as Prais-Winsten regressions with panel-corrected standard errors and autoregressive errors. Proceeding with Prais-Winsten regressions our empirical findings reveal substantial differences across countries and time periods in the effects of female employment on fertility. Initial increases in female employment strongly lowers fertility, but continued increases have a progressively less negative effect. The country heterogeneity in the effect of female employment can also be confirmed for different regions as well as for varying welfare and gender regimes.

External Shocks, Household Consumption and Fertility in Indonesia

This paper examines the impact of idiosyncratic income shocks on household consumption, educational expenditure and fertility in Indonesia, and assesses whether the investment in human capital of children and fertility are used to smooth household consumption. Using six different kinds of self-reported economic hardships, our findings indicate that coping mechanisms are rather efficient for Indonesian households that perceive an economic hardship. Only in case of unemployment we find a significant decrease in consumption spending and educational expenditure while fertility increases. Theses results indicate that households that perceive an unemployment shock use children as a means for smoothing consumption. Regarding the death of a household member or natural disaster we find that consumption even increases. These results are consistent with the argument that coping mechanisms even over-compensate the actual consumption loss due to an economic hardship. One important lesson from our findings is that different types of income shock may lead to different economic and demographic behavioral adjustments and therefore require specific targeted social insurance programs.Consumption, Insurance, Fertility and Indonesia

Agricultural productivity growth and escape from the Malthusian trap

Industrialization allowed the industrialized world of today to escape from a regime characterized by low economic and population growth and to enter a regime of hihg economic and population growth. To explain this transion of regime, we construct a two-sector growth model with endogenous fertility and endogenous technological progress in the manufacturing sector. With this structure our model is able to replicate the stylized facts of the British industrial revolution. In addition, we show that industrialization requires rising growth of agricultural total factor productivity. This result is in marked contrast to previous work within a similar framework - but with a constant population - wich came to the conclusion that industrialization requires merely a rising level of agricultural total factor productivity. We conclude by illustrating that our proposed model framework can be extended to also include the demographic transition, i.e., a regime where economic growth may lead to decreasing fertility. (AUTHORS)Malthusian theory, demographic transition, economic growth, population growth

Demographic Change in Models of Endogenous Economic Growth. A Survey.

The purpose of this article is to identify the role of population size, population growth and population ageing in models of endogenous economic growth. While in exogenous growth models demographic variables are linked to economic prosperity mainly via the population size, the structure of the workforce, and the capital intensity of workers, endogenous growth models and their successors also allow for interrelationships between demography and technological change. However, most of the existing literature considers only the interrelationships based on population size and its growth rate and does not explicitly account for population ageing. The aim of this paper is (a) to review the role of population size and population growth in the most commonly used economic growth models (with a focus on endogenous economic growth models), (b) discuss models that also allow for population ageing, and (c) sketch out the policy implications of the most commonly used endogenous growth models and compare them to each other.Demographic change, endogenous R&D, economic growth

Examining structural shifts in mortality using the Lee-Carter method

We present an extension of the Lee-Carter method of modeling mortality to examine structural shifts in trajectories of mortality. Austrian data consisting of 53 years of single-age mortality rates are subdivided into 30 24-year submatrices. Using singular value decomposition, the submatrices are decomposed into three component submatrices: 1) the multiple realizations of the index of mortality to which each respective age-specific death rate is linearly related; 2) the average shape across age of the log of mortality schedules; 3) the sensitivity of the log of mortality at each age to variations in the elements of the index of mortality. We refer to these latter submatrices to locate structural changes in mortality patterns. A comparison of the observed and estimated life expectancy indicates that the extended Lee-Carter method is superior to the original Lee-Carter method, particularly so for life expectancies at higher ages. We conclude by projecting life expectancy up to 2050, applying the Lee-Carter method to the whole time series (1947-1999) and comparing it to an application of the Lee-Carter method to the latest subsample (1976-1999). (AUTHORS)

Private car use in Austria by demographic structure and regional variations

Due to its manifold impact on the environment private car use represents an important dimension of en-vironmental behaviour in industrialized countries. Obviously, private car use is related to demographic characteris-tics of households such as the life-cycle stage and the living arrangement the household lives in. In addition sys-tematic regional differences of private car use have to be taken into account. In this paper a causal model is de-rived, which aims to explain regional variations in car use (as measured by the distance driven) by regional demo-graphic differences and region-specific control factors such as attitudes towards car use, car technology, and insti-tutional factors. Using aggregate data from an household survey in Austria and data from Austrian official statistics causal effect coefficients are then estimated. By applying path analysis the estimated effects of regional demo-graphic characteristics on region-specific car use can be decomposed into direct and indirect effects, with the latter effects being mediated by the control factors. Almost no significant direct demographic effect on car use can be found. Region-specific averages of distances driven are best predicted by using the considered control factors as predictor variables. Nevertheless, many of the presumed indirect effects turn out to be of importance. For instance, the regional mean age of household heads can be discerned as a key factor of demographic effects on car use since it significantly influences several of the region-specific control factors. Moreover our results evidence that the regional pattern of car use is covered by various combinations of control factors. (AUTHORS)Austria

Wealth and cohort size: stock market boom or bust ahead?

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Childrearing responsibility and stepfamily fertility in Finland and Austria

We investigate the hypothesis that the propensity of a stepfamily couple to have a shared child is inversely related to the responsibility for rearing pre-union children. We compare effects of coresident pre-union children to those of nonresident, and effects of the woman’s children to those of the man’s. Shared children and stepchildren reduce the risk of a birth to a couple, and the reduction is larger for each shared child than for a stepchild. We found larger effects of coresident pre-union children than of nonresident children, and larger effects of a woman’s pre-union children than of a man’s. The differences were more pronounced in Austria where public support for childrearing and gender equality is lower than in Finland. Our study demonstrates that in addition to the number of pre-union children, coresidence and parentage of pre-union children also need to be considered in future fertility research.Austria, Finland, child rearing, family composition, fertility determinants

R&D-Based Growth in the Post-Modern Era.

Conventional R&D-based growth theory suggests that productivity growth is positively correlated with population size or population growth, an implication which is hard to see in the data. Here we integrate micro-founded fertility and schooling into an otherwise standard R&D-based growth model. We then show how a Beckerian child quality-quantity trade-off explains why higher growth of productivity and income per capita are associated with lower population growth. The medium-run prospects for future economic growth - when fertility is going to be below replacement level in virtually all fully developed countries - are thus much better than predicted by conventional R&D-based growth theory..Endogenous growth, R&D, declining population, fertility, schooling, human capital, postmodern society, post-transitional fertility.