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Economic ageing and demographic change

    Dominik Grafenhofer, Christian Jaag, Christian Keuschnigg, Mirela Keuschnigg

Vienna Yearbook of Population Research 2007, pp. 133-165, 2024/12/12

doi: 10.1553/populationyearbook2007s133


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doi:10.1553/populationyearbook2007



doi:10.1553/populationyearbook2007s133

Abstract

This paper presents a generalised model of overlapping generations with economic ageing of households. Economic age is defined as a set of personal attributes such as earnings potential and tastes that are characteristic of a person’s position in the life-cycle. We separate the concepts of economic age and time since birth by assuming only a small number of different states of age. Agents sharing the same economic characteristics are aggregated analytically to a small number of age groups. The model thus allows for a very parsimonious approximation of life-cycle differences in earnings, wealth and consumption. As
an illustration, we apply the model quantitatively to study the impact of demographic change.