The Effect of Longevity and Population Aging on Saving: A Panel ARDL Approach

Document Type : Research Paper

Authors

1 Ph.D Candidate in Health Economics, Tarbiat Modares University

2 Assistant Professor in Economics, Tarbiat Modares University

3 Professor in Economics, University of Isfahan

10.29252/jep.9.18.1

Abstract

During recent years, a dramatic increase in life expectancy accompanied by low fertility and mortality has caused population aging and higher old-age dependency rates. This paper investigates the effects of longevity and population aging on saving by using the Pooled Mean Group (PMG) approach. A distinctive feature of this study is its demonstration of the separate roles of life expectancy and old-age dependency rate. The results of this study which spans 21 countries over 1971–2012 show that, in the long run, the theoretical implications are supported by the data and the demographic variables play an important role in explaining the differences in savings over time and across countries. According to the Life Cycle Model, there is a positive long-run relationship between longevity and saving and a negative long-run relationship between old-age dependency rate and saving. The absolute value of the longevity effect is greater than that of the old-age dependency rate. In the short run, of the two demographic variables, only the old-age dependency rate has the expected sign and is significant.

Keywords

Main Subjects

References

  1. الف) منابع و مآخذ فارسی

    1. بهشتی، محمد باقر. و احمدزاده، خالد (1386). "بررسی اثر ساخت سنی جمعیت کشور روی تورم". فصلنامه مدرس علوم انسانی 11(3): 106-86.
    2. پیرایی، خسرو. کشاورزی، محمد. و عربی، حسین (ادیب) (1392). "عوامل تعیین‌کننده پس‌انداز خصوصی در ایران با تأکید بر نرخ واقعی ارز و محدودیت قرض". فصلنامه سیاست‌های راهبردی و کلان 1(1): 92-63.
    3. رنج‌پور، رضا. کریمی تکانلو، زهرا. و شکری، محمد (1390). "بررسی رابطه‌ی بین پس‌انداز و رشد اقتصادی در ایران طی دوره‌ی زمانی (1387-1340)". فصلنامهتحقیقاتاقتصادیراهاندیشه 1(3): 140-113.
    4. عمادزاده، مصطفی. و قندهاری، زهرا (1392). سلامتی و رشد اقتصادی، اصفهان، انتشارات جهاد دانشگاهی.
    5. کرمی، افشین (1387). "ارزیابی اثر رشد نقدینگی بر نرخ پس‌انداز ملی در ایران". فصلنامهپژوهشنامهبازرگانی 12(46): 254-231.
    6. مجتهد، احمد. و کرمی، افشین (1382). "ارزیابی متغیرهای موثر بر رفتار پس‌انداز ملی در اقتصاد ایران". پژوهشنامه بازرگانی 7(27): 28-1.
    7. مهرگان، نادر. و رضایی، روح الله (1388). "اثر ساختار سنی جمعیت بر رشد اقتصادی". فصلنامه پژوهش‌های اقتصادی ایران 13(39): 146-137.
    8. نوفرستی، محمد. و احمدی، محبوبه (1387). "بررسی اثر ساختار سنی جمعیت بر پس‌انداز جامعه". فصلنامه پژوهشهای اقتصادی 8(1): 56-43.

     

    ب) منابع و مآخذ لاتین

    1. Apergis, N. and Christou, C (2012). "Dependency Rates and Savings: the African Evidence with Panel Data". International Journal of Business and Management 7(4): 84-95.
    2. Barro, R. J. and Sala-i-Martin, X. (1995). Economic Growth, McGraw-Hill, New York.
    3. Bloom, D. E., Canning, D. and Moore, M. (2014). "Optimal Retirement and Saving with Increasing Longevity". Scand J Econ 116(3): 838–858.
    4. Bloom, D., Canning, D. and Graham B. (2003). "Longevity and Life-Cycle Savings". Scandinavian Journal of Economics 105(3): 319-338.
    5. Boersch-Supan, A. and Ludwig A. (2009). "Aging, Asset Markets, and Asset Returns: A View from Europe to Asia". Asian Economic Policy Review 4(1): 69–92.
    6. De Jong-Gierveld J. and Van Solinge, H. (1995). "Ageing and its Consequences for the Socio-Medical System". Population Studies, No. 29. Strasbourg, France: Council of Europe Press.
    7. Ehrlich, I. and Lui, F. T. (1991). "Intergenerational Trade, Longevity, and Economic Growth". Journal of Political Economy University of Chicago Press, 99(5): 1029-59.
    8. Edwards, S. (1996). "Why Are Latin America‘s Saving Rates So Low? An International Comparative Analysis". Journal of Development Economics 51(1): 5–44.
    9. El-Mekkaoui de Freitas, N. and Martins, O. (2013). "Health, Pension Benefits and Longevity: How They Affect Household Savings?". Netspar Discussion Paper.
    10. Fry, Maxwell J. and Mason, A. (1982). "The Variable Rate-of-Growth Effect in the Life-Cycle Saving Model". Economic Inquiry 20(3): 426-442.
    11. Higgins, M. D. (1998): "Demography, National Savings, and International Capital Flows". International Economic Review 39(2): 343-369.
    12. Higgins, M. and Williamson, JG. (1997). "Age Structure Dynamics in Asia and Dependence on Foreign Capital". Population and Development Review 23(2): 261–93.
    13. Holliday, R. (1999). "Ageing in the 21st Century". The Lancet 354(4): Page SIV4.
    14. Im, K., Pesaran, H. and Shin, Y. (2003). "Testing for Unit Roots in Heterogeneous Panels". Journal of Econometrics 115(1): 53-74.
    15. Kelley, A. and Schmidt, R. (1996). "Saving, Dependency and Development". Journal of Population Economics 9(4): 365–86.
    16. Kim, D.-H., Lin, S.-C. & Suen, Y.-B. (2010). "Dynamic Effects of Trade Openness on Financial Development". Economic Modelling 27(1): 254-261.
    17. Lee R.D., Mason, A. and Miller, T. (1998). "Saving Wealth and Population". Paper presented at the Symposium on Population Change and Economic Development at the Bellagio Center, Lake Como, Italy.
    18. Lee, R., Mason, A. and Miller, T. (2000). "Life Cycle Saving and the Demographic Transition in East Asia". Population and Development Review 26: 194–222.
    19. Leff, N. H. (1969). "Dependency Rates and Savings Rates". American Economic Review 59(5): 886–896.
    20. Loayza, N., Schmidt-Hebbel, K. and Servén, L. (2000). "What Drives Private Saving across the World? ". The Review of Economics and Statistics 82(2): 165–181.
    21. Mason, A. (1981). "An Extension to the Life-Cycle Model and Its Application to Population Growth and Aggregate Saving". East-West Population Institute Working Paper No. 4.
    22. Mason, A. (1987). "National Saving Rates and Population Growth: A New Model and New Evidence". In: Johnson DA, Lee R (eds) Population Growth and Economic Development: Issues and Evidence. National Research Council. University of Wisconsin Press, Madison.
    23. Masson P. R., Bayoumi, T. and Samiei, H. (1998). "International Evidence on the Determinants of Private Saving". The World Bank Economic Review 12(3): 483-501.
    24. Modigliani, F. (1986). "Life Cycle, Individual Thrift, and the Wealth of Nations". American Economic Review, American Economic Association 76(3): 297-313.
    25. Modigliani, F. (1970). "The Life-Cycle Hypothesis of Saving and Inter-Country Differences in the Saving Ratio". In W. Eltis, M. Scott, & J. Wolfe (Eds.), Induction, growth and trade, Essays in honor of Sir Roy Harrod, Clarendon Press, Oxford
    26. Pesaran, M. H., Shin, Y. and Smith, R. P. (1999). "Pooled Mean Group Estimation of Dynamic Heterogeneous Panels". Journal of the American Statistical Association 94: 621-634.
    27. Prettner, K. and Canning, D. (2013). "Increasing Life Expectancy and Optimal Retirement in General Equilibrium". Econ Theory 56(1):191–217.
    28. Wong, B. and Ki Tang, K. (2013). "Do Ageing Economies Save Less? Evidence from OECD Data". International Journal of Social Economics 40(6): 591-605.
    29. World Bank (2013). Available from: http:/ www.worldbank.org.
The Journal of Economic Policy
Volume 9, Issue 18
May 2017
Pages 1-20

Files

Share

How to cite

Statistics