Le vieillissement démographique au niveau mondial : scénarios et conséquences

Si les conséquences économiques et sociales du vieillissement démographique ont été amplement analysées au niveau des différents pays de l’OCDE, rares ont été jusqu’à présent les études replaçant ce phénomène dans un contexte globalisé. C’est ce que fait cette note du Centre for European Policy Studies (CEPS), fondée sur l’utilisation du modèle INGENUE, qui se penche notamment sur les réformes des systèmes de retraite opérées en Europe occidentale.

Demographic transition and the consequent population aging are putting the payas- you-go (PAYG) pension systems of OECD countries under stress and fostering various reforms. The latter will have economic consequences that are likely to be important and far-reaching, both in the domestic economies of the countries implementing them, and in the world economy, given the current and foreseeable degree of international economic and financial integration. Current population structures and demographic projections for the various regions of the world show that the aging process is not synchronous: over the next decades, while OECD countries – and most notably Europe and Japan – will experience large increases in their old-age dependency ratios, other regions of the world will be facing relatively low ratios and still rising working-age populations. This difference in time profiles of demographic changes suggests that inter-temporal trade, in the form of international capital flows, would be mutually advantageous compared to a situation of economic and financial autarky. 

While populations in OECD countries have been aging for a long time now, raising living standards in other parts of the world are also bringing longer life expectancy and falling fertility rates in developing countries: the so-called demographic transition pattern is progressively spreading over the entire world; thus, the world population is aging, but at a different pace and with different calendars in the various regions of the world. Whereas various economic and social consequences of aging have been investigated in OECD countries, very few analyses have explicitly taken the worldwide aspect of the problem into account. Indeed, this generalized but differentiated aging process is occurring in a world of increasing capital mobility and financial globalization, which suggests that it may give rise to new opportunities for profitable exchanges amongst regions, a situation of mutually beneficial gains from inter-temporal trade through international financial transactions. The purpose of this analysis is therefore to evaluate the potential magnitude of such capital flows: if they are found very large compared to what has been observed in the past (end of the XIXth century up to World-War-I) or in more recent years, such a prospect raises the issue of international financial instability and of the institutions and regulations that would have to be set up to make such large capital flows between developed and ageing countries on the one hand, and developing countries with younger populations in the other hand, sustainable. 

This CEPS paper presents, and makes use of, an applied, international, overlapping generations, general-equilibrium (OGGE) model of the world economy built upon the 2000 United Nations (UN) demographic projections to study the prospects of asset accumulation and investment in the various regions of the world and of 1 international capital flows over the next few decades. 

The research relies on the second version of the INGENUE model. The first version of the model has already been used to investigate the impact of differenciated ageing on worldwide capital flows. In this paper, the INGENUE team uses the second version of the model which brings a number of improvements. This new version allows to investigate migration scenarios which are another key issue when discussing the adjustment to differenciated ageing throughout the world. 

The first section of the paper presents the model, and discusses a number of aspects of the calibration process. The transition path of the baseline scenario is described and briefly commented in section 2. Section 3 explores the aggregate consequences, on the world economy and on regions, of two contrasted pension reform scenarios in Western Europe, and of a specific migratory scenario : a constant contribution rule; a postponement of retirement ; comparing the latter with a migratory scenario calibrated in order to limit the rise of the dependency ratio between 2000 and 2050 in Western Europe, as in the postponement of retirement age case. The comparison with pension reforms scenarios seems accurate as increasing labour mobility is a potentially important mechanism through which the global economy could respond to demographic change and is therefore an alternative to the flow of capital. This paper also investigates the intergenerational consequences of these reforms.

To read the paper in full, please visit the CEPS website.