Abstract WP15-03

Andrew Mason, Ronald Lee, Diana Stojanovic, and Michael Abrigo, 2015 The Fiscal Impact of Population Aging: Accounting for the Role of Demography, NTA Working Paper WP15-03.

Abstract

In the coming years many countries will reform public systems because of fiscal pressures and in response to the needs of rapidly growing elderly populations. Many countries, particularly in the developing world, will be developing new programs that again respond to the needs of growing elderly populations and, hopefully, do so in a way that recognizes demographic realities. The goal of this paper is to clearly identify the linkages between population aging, the public sector, and public policy. The analysis is carried out using the National Transfer Account (NTA) framework and data. We rely on a simulation model that allows us to consider the long-term implications of changes in population age structure for public spending, revenue, deficits, and debt. We consider a group of countries that vary widely in their public sectors, their levels of development, and their position in the demographic transition. A companion paper will extend the analysis to consider the implications for the private, as well as, the public sectors.