(UM05-03) - Understanding Global Aging
Laurence J. Kotlikoff and Hans Fehr
This proposal responds to SSA’s interest in global aging by developing a dynamic, general equilibrium, life-cycle simulation model of demographic change in the U.S., EU, Japan, China, and India. The model, a prototype of which exists, incorporates fertility reductions, lifespan extension, technical change, immigration, capital adjustment costs, international capital flows, earnings heterogeneity, and region-specific fiscal institutions. The model will study the impact of aging on wages, interest, inflation, and tax rates, regional stock values, capital accumulation, and trade. It will also study the micro- and macroeconomic effects of immigration, pre-funding, privatization, tax increases, increases in retirement ages, and benefit cuts.