Aging and the Macroeconomy Long-Term Implications of an Older Population (2012) / Chapter Skim
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Appendix A: Population and Related Projections Made by the Committee
Appendix A: Population and Related Projections Made by the Committee
Pages 219-231
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From page 219... ...
Given the high degree of uncertainty regarding variables such as future rates of return, productivity growth, international capital flows, and so on, the committee chose to limit its analysis and discussion to the next four decades. POPULATION PROJECTIONS BY AGE AND SEX The population projections used by the committee are based on intermediate-cost population projections prepared by the Social Security Administration (SSA)
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From page 220... ...
Net migration is immigrants coming into the population minus emigrants leaving the population. The age-specific fertility rates used are the same as in the intermediatecost SSA projections, with a minor adjustment for the years 2008 and 2009.2 The age distribution of fertility is based on recent historical trends, while the overall level of fertility is assumed to decline gradually in the near term and remain constant at just below replacement level.
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From page 221... ...
The SSA projection adds net migrants at each projection step based on a guess about the future trend of migration, legal and illegal combined, and the age and sex distribution of net migrants from recent history. The total number of net migrants in the SSA projections begins at only 35,000 in 2008 based on evidence that the recent economic downturn in the United States has discouraged a great deal of potential immigration and encouraged some emigration.
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From page 222... ...
The committee thanks David Waddington, Ben Bolender, Christine Guarneri, and Donnette Willis of the Population Projections Branch of the U.S. Census Bureau for sharing data with it for the project.
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From page 223... ...
for each age and sex group is estimated for the singlerace projection and broken down into the five race/ethnic groups based on the distribution that would have occurred given the relative rates (of fertility, mortality, or net migration) from the Census Bureau race/ethnic population projections.
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From page 224... ...
A cubic spline was fitted to the cumulative counts of population and labor force, generating estimates of the total population and labor force at each age. The ratio of these produces labor force participation rates by single years of age that are completely consistent with the BLS age group rates but provide a smooth single-yearage schedule.
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From page 225... ...
Then, a single multiplicative adjustment factor for each age-sex-year cell was computed so that the overall age-sex-year labor force participation rate was preserved; however, the race/ethnic groups had relative participation rates in the same ratios as the CPS rates by race/ethnicity for that age and sex. SUPPORT RATIO ANALYSES Calculating a support ratio requires two types of data: counts of population by age and per capita estimates of economic activity by age.
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From page 226... ...
SR(t) = x =0 x=0 This analysis was done for other countries with age profiles calculated as part of the National Transfer Accounts project, using the age profiles cal culated for a recent year and combining them with population counts from the United Nations World Population Prospects database, medium variant projections (http://esa.un.org/wpp/unpp/panel_population.htm)
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From page 227... ...
For example, using 2007 age profiles for the United States and the population projection developed for this report, the support ratio in the United States for 2007 was 0.78. The peak value of average labor income was about $60,000 for people aged 51.
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From page 228... ...
One option was to use 2010 per capita GDP data for the entire projection period. The per capita GDP figures, measured in purchasing power parity-adjusted international dollars, came from the International Monetary Fund's (IMF's)
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From page 229... ...
, or the proportion of persons age x who are family heads at time t, the product is the average net worth of a person age x at time t.4 The data on headship come from the 2007 March Supplement of the CPS. The CPS data were accessed through the Integrated Public Use Microdata Series facility found at http://cps.ipums.org/cps/.5 Finally, multiplying the average net worth per person in 2007, NW(x,2007)
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From page 230... ...
Inputs to the model are mortality rates for 1950-2007 from the Human Mortality Database (University of California, Berkeley, and Max Planck Institute for Demographic Research, 2011) ; output consists of 1,000 stochastic sex-age-time trajectories Ms,x,ti from the online LCfit program (available at http://simsoc.demog.berkeley.edu/)
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From page 231... ...
. Migration Net migration flows into the population follow the assumptions used in the deterministic population projections by age and sex (see Table A-1)
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